Monthly Archives: November 2011

The Do’s & Don’ts of Using A Medical Credit Card

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Medical credit cards or lines of credit have become tempting options for consumers who find themselves with big bills or no insurance at all.  In 2010, US consumers paid over $45 billion in medical expenses with credit cards and that number is only expected to grow. So a card just for your health care seems to make sense. However, it’s important to remember that these cards are often no different from an ordinary credit card—and are sometimes worse.

Some medical credit cards are designed to cover elective procedures—those that your health insurance won’t cover such as dental exams, chiropractic, Lasik treatments, or cosmetic surgery. Others can be used to pay your co-pays and deductibles.

But with any credit card, the same traps can exist: Low introductory rates to hook you in, hidden fees, or changing minimum payments are all common with medical credit cards. Some cards impose retroactive interest rate increases—if you are late on a payment, they can raise your rate on current balances retroactively. Increases of up to 30% are possible.

The instant transactions that credit cards allow also prevent you from having a chance to review bills before you pay them. Medical billing errors are common, and if you pay for a procedure on the spot, you are much less likely to catch them.

But most importantly, what you charge on medical credit cards can impact your credit report.

Putting your health care expenses on a credit card converts them from medical debt to revolving consumer debt. Medical debt does not affect your credit history unless it goes into collections, but consumer debt can if you have late or missed payments.

Before you get a card:

DO consider your alternatives. Health savings accounts (HSAs) or flexible spending accounts (FSAs) are accounts that allow you to save money tax-free to be used on medical expenditures.  If your employer offers one of these benefits, consider saving up for your medical expenses ahead of time. An increasing number of these accounts are now providing consumers with debit cards too.

DO check if your provider offers payment plan options. Almost all hospitals and many physician practices will do this at better rates than a card will offer.

DO beware of the card issuer. Some credit card companies market their cards to providers rather than directly to consumers.  These providers may get commissions for each patient they sign up. So while it may seem sound and reliable to get a card offered by your hospital or doctor, it may be no different from one you’d find on your own.

DON’T get a card unless you understand all the terms. Read the rules before signing up and make sure you have a plan for paying off debt if you know you’ll use the card. Remember, credit cards should make your finances easier, not worse, so use them as tools, not as solutions.

Not There When You Need it: Health Plans to Watch Out For

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What’s worse for your pocketbook and for your health than not having medical insurance? Perhaps having bad insurance. There are many products out there today that walk and talk like a health insurance policy, but won’t give you the financial protection that a health plan will. And you definitely don’t want to be paying for a plan only to discover you’re not covered when you need it. If you are shopping for a plan for yourself or your family, here are a few common traps to avoid.

Medical Discount Plans

These plans provide just what the name implies—discounts on medical care. They are sometimes marketed as insurance, but really only offer you a discount on services such as doctor’s visits or prescription drugs. The discounts can be limited to certain providers who have agreed to work with the plan and the benefits may be unclearly stated—for example “Up to 50% off” is no guarantee of the actual percentage you will save. But the bottom line is the same—medical discount plans might provide some savings on basics that you’d be getting anyway, but they won’t help you out on larger, more expensive procedures

Critical Illness or Dread Disease Policies

These plans can either cover treatment for certain major diseases or pay you a sum of cash if you are diagnosed with the illness. Common covered diseases include cancer, multiple sclerosis, heart attacks and strokes, HIV/AIDS, or organ transplants. If anything, critical illness insurance should be purchased as a supplement to regular health insurance, not as a substitute. However, with most comprehensive health plans offered today, most people do not need this extra coverage. Especially now with limits on annual and lifetime maximum benefits to be phased out (see our post The Affordable Care Act: What’s in the Patient’s Bill of Rights for me?), consumers have increased protections against their health benefits running out.

Short Term or Temporary Plans

These plans are meant to provide coverage for anywhere between one to twelve months to help bridge you from one insurance to another. However, they do not always cover pre-existing conditions or routine preventive care. Short term or temporary health insurance is good for emergency care, but may not be reliable for full, comprehensive coverage. These plans are not necessarily bad—buyers should just know how they’re limited and rely on them only as temporary coverage.

Special, Limited–time Health Reform plans

This idea is really just a scam: Some companies have taken advantage of the Affordable Care Act and attempted to sell plans that are “required by the new health reform bill” and only available for a limited time. In reality, the bill does not require anyone to purchase a specific insurance plan at any point in time. The plans being sold may be real health insurance; however, consumers should be cautious of any product that is being falsely marketed.

If you’re unsure about an insurance plan, check what your state’s Department of Insurance has to say about the company. Can’t find the company listed with them? Then odds are, it is not insurance.

The Coalition Against Insurance Fraud publishes a list of companies to watch out for: www.insurancefraud.org.

And as always, read into the details before signing on to any policy.

Who’s Increasing Health Insurance Premiums? This New Web Tool Tells You.

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If you’re curious about which insurance companies are raising their rates these days, there is a new website for you.

On Thursday, October 13th, the Federal Government launched a new website that allows consumers to search for insurance plans that have raised their premiums more than 10% and their reason for doing so. All health insurance companies are now required to report these increases for individual and small group plans (large employer group plans are excluded). In addition, the 10% is an average of all their plans, so some individuals may have higher increases.

http://companyprofiles.healthcare.gov/

Each state has slightly different laws on premium hike rate reviews. Some states can directly prohibit an increase if experts find the increase unreasonable, others can only provide an opinion.

The website will also report on whether insurance companies are complying with new laws about Medical Loss Ratios (MLRs). MLRs are guidelines for how much an insurer must spend on direct medical care, versus overhead or administration. The MLR required by the health reform bill, the Affordable Care Act, is 80-85%, meaning that your insurance company must spend at least 80% of its premium dollars on health care.

Beginning in 2012, if your health plan fails to meet its MLR, it must pay rebates to its policy holders or lower premiums. The process for how these rebates will be distributed has yet to be determined.

How to Switch Insurance Plans Smoothly

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This post originally appeared on Mint.com.

Have you recently lost your job? Are you thinking of quitting to start your own thing? If that’s you, worries about health coverage may be the last thing on your mind. However, if you’ve been getting coverage from your employer, you’ll need to figure out how to make a smooth transition to a new plan. Unless you are going between plans offered by your employer, it takes some coordination to make sure your health care will be uninterrupted and you won’t end up with a gap in coverage—or worse, losing coverage entirely.

First, the top three things to keep in mind (no matter what type of plan you’re changing to):

  • Be aware of dates.  Many transitions have limited enrollment windows or periods that coverage is available. Missing a date could mean losing coverage. Check with your company’s HR department, or speak directly with your insurance provider to confirm the applicable dates.
  • Get your Certificate of Creditable Coverage. This document can be your ticket to getting coverage right away for pre-existing conditions; without it, new insurers may balk at covering pre-existing conditions. It should be sent to you when you stop an insurance plan. Keep it safe.
  • Know your options. COBRA, employer plans, individual plans, and short term, temporary plans can all have very different rules. Don’t just assume that insurance is insurance.

If you are switching from an employer plan to COBRA:

This can be the smoothest of transitions because you are essentially keeping the same plan you’ve always had—but now, you are paying the full cost (both your share and your former employer’s). You have 63 days to complete the paperwork to enroll in COBRA from the time you are first notified that you are eligible. Once you have enrolled, you have 45 days to pay the premium (directly to your former employer–not the health plan). You will probably receive new insurance cards, but your coverage should be the same. Pre-existing conditions will still be covered. You can usually keep your COBRA coverage for 18 months (sometimes 36 depending on how you qualified for COBRA in the first place). After that, it’s time to start shopping for something new.

If you are switching from an employer plan to a temporary or short-term plan:

Temporary plans are often marketed as more affordable alternatives to COBRA. Before you choose a temporary plan, be sure you understand the benefits and limitations. Temporary or short-term plans offer coverage for anywhere from 30 days to 1 year. After this length of time, there is no guarantee the plan will extend your coverage—these plans are not required to renew coverage the way that full medical insurance must. They are also not required to cover pre-existing conditions and often don’t cover routine, preventive care–only emergencies and catastrophic care. The plus side? Temporary health plans can usually start immediately (as soon as you pay) and the application is shorter and simpler, so the switch can be easier to coordinate.

If you are switching from COBRA to a private individual plan:

If your COBRA benefits run out, you have a special right to buy an individual health plan without detailing your pre-existing conditions. However, you do not have this right if you voluntarily decide to leave COBRA or just stop paying your premiums. Translation: there’s no guarantee the new plan you want will take you, so make sure you are covered before cancelling your COBRA.

When your COBRA plan ends, you should receive a “Certificate of Creditable Coverage” from them. Keep this paper as proof you had prior health insurance coverage, which you may need to show your new plan for any pre-existing conditions to be covered (see more below).

If you are switching from one private plan to another.

Do your research and make sure the new plan will work for you. Apply for the new plan and make sure you have been approved before you do anything with your current plan. Your new health plan may require a “Certificate of Creditable Coverage” which is a document that shows how long you have had continuous health insurance coverage. If you have had a “significant break in coverage” before applying (generally 60 days or more), the insurance company has the right to deny coverage of any pre-existing conditions for a waiting period (usually six to twelve months). If you know you will be canceling your plan, you can request the Certificate of Creditable Coverage ahead of time. Then, you’ll need to line up the dates that one plan ends and the other begins (such as the first of the month). As soon as you receive your new insurance cards and have confirmed the dates, you can cancel your current plan.

Simplee Helps Craig L. Save Almost $1,000

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I wish I had some video of the silly dancing and cheering we were doing around the office when we read this great letter from user Craig L. about how Simplee saved him almost a thousand smackeroos!

Hi there.  I quickly wanted to share my Simplee success story.

We have a son with a disability and he receives many different therapies.  I get statements from our insurance provider, but cannot often make heads or tails of what is being reimbursed, at what rate, and why.  With the help of Simplee, I was able to catch a $968 error.

It turns out that for a particular therapy, we were being reimbursed at the in-network 90% rate up through the end of last year.  At the start of this year, for some reason, for this same therapy, we were being reimbursed at the out-of-network rate of 70%.  Given the complexity of statements, I didn’t catch this on my own.  Armed with the simplicity of Simplee, I was easily able to see the discrepancy.

I called the insurance provider and pointed out the error.  They acknowledged the issue and sent us a check for $968.

Without Simplee, I would not have caught this on my own.

So, thank you very much for saving me a ton of money!!

Thanks, Craig!  We are so thrilled we could help you and your family.  Hearing stories like this makes all the hard work completely worth it.

If you’re not using Simplee yet, why the heck not?  Sign up and see what you can save.

Health Reform: What’s in the Patient’s Bill of Rights for me?

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Do you know about the Patient’s Bill of Rights?  It’s part of the Affordable Care Act, aka Obamacare, that many people might not know about.  It’s basically a handful of new benefits and rights that should make finding affordable insurance and keeping your costs down much easier.  And we love that at Simplee!

So what are these rights?  Here are the top 5 when it comes to buying insurance and handling big bills.  

 1.     Pre-existing condition? Not an issue.

Every state now has a Pre-existing Condition Insurance Plan—insurance in which you are guaranteed to be accepted, even after other companies have denied you. The premiums are determined by your age and where you live (not by your medical condition). And by 2014, anyone, regardless of their health history, will be able to purchase insurance from their state’s Health Benefits Exchange, a marketplace of private health plans with affordable rates.

 2.     No more lifetime limits on coverage.

Plans can no longer set dollar limits on how much of your care they’ll pay for.  Anyone with a chronic condition or who had sudden serious medical issues knows that bills can add up quickly, so this protection could literally be a lifesaver. Keep in mind, it only applies to “essential health benefits,” such as doctors visits, drugs, or hospital stays.

 3.     No more annual limits on coverage.*

Starting in Jan 2014, health plans will no longer be able to set dollar limits on how much of your care they will cover in a year. For plan years starting after September of 2011, the annual limit is $1.25 million. By September 2012, it becomes $2 million. And then by 2014, the limit will be gone. Like the lifetime limit, it applies only to essential health benefits.

 4.     Insurers can’t cancel your coverage for things left off your application.

You know those horror stories about an insurance company cancelling someone’s coverage because they forgot to mention some heartburn or acne they had years ago? Insurers are no longer allowed to do this. It doesn’t mean you can now lie on your application and expect to be covered, but that you are protected around small issues that don’t have a major bearing on your health.

5.     Emergency care is always covered, even if it’s out of network.*

That’s right, you don’t have to worry about your insurance paying differently if something happens when you’re away from home (or even just away from a network hospital). Your plan cannot charge you more for out-of-network emergency services than you would pay in-network, or require you to get prior-authorization before going to the hospital (Really? Calling to get permission while riding in the ambulance? Not anymore).

This is just the beginning. You have a lot of other rights not mentioned here, including greater oversight over premium increases, limits to how much health plans can use your premium dollars for overhead and administrative costs, protections for children, and more.

For more on the Bill of Rights, see http://www.healthcare.gov/law/features/rights/bill-of-rights/index.html.

* This protection is not required for some individual (non-employer group based) grandfathered health plans. 

 

Unnecessary Care Costs Americans $6.8 Billion a Year

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With healthcare costs continuing to rise and consumers bearing the burden with higher out-of-pockt costs, the average patient is becoming increasingly active in their health decisions. According to a new study, patients have another burden to bear: tracking down and preventing unnecessary care and treatement.

Kaiser Health News writes:

The newest study, using data from federal medical surveys, estimated that 12 of these unnecessary treatments and screenings accounted for $6.8 billion in medical costs in 2009. The activity most frequently performed without need was a complete blood cell count at a routine physical exam. In 56 percent of routine physicals, doctors inappropriately ordered such tests, accounting for $32.7 million in unnecessary costs. In terms of dollars, the biggest-ticket item by far was physicians ordering brand-name statins before trying patients on a generic drug first: That accounted for a whopping $5.8 billion of the $6.8 billion total.

Archives of Internal Medicine

It is high time we make healthcare easier and simpler.

Sign up for Simplee to finally understand your health bills to track down these unnecessary procedures.