October Is Open Enrollment Season for Your Health Insurance

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Each year in October, employers provide open enrollment for the health insurance plans they provide.  It is important to review the offerings, find out the changes and what it will cost you in the long run.  Failure to do this will place you on the company default health insurance plan which may or may not be what you want.

Some helpful information:

• Co-pay is a fixed amount that you pay when you receive health care services.  You are expected to pay this with each visit.
• Co-insurance is percentage difference between what the health insurance plan pays and the health care provider charges.  For example, Medicare pays 80 percent of the negotiated health care charge and you are responsible for the remaining 20 per cent.
• The new health care law now extends health insurance coverage of dependent children to age 26.  It now includes insurance coverage for annual physical examinations and some preventive services.  It also lifts lifetime coverage caps.
• Check out any changes in premium structure for family plans.  Instead of a single premium for a family plan, some health insurance plans may charge individual premiums for the employee, the spouse and dependent children.  
• Review your health service utilization in the last year to see how much to add to your flexible spending account (tax free savings plan for eligible health care expenses such as co-pays, deductibles and other health services not covered by your health insurance plan.)
• Weigh your health services utilization against the value of signing up for a higher deductible and putting away the money saved.  For instance, healthy young persons may opt for a higher deductible premium, saving the difference and using their flexible spending account for deductibles.
• Maintain a healthy lifestyle.  Most health  insurance companies offer incentives for weight reduction, smoke cessation and other preventive practices.

Prescription Health Insurance: Five Ways to Save on Prescription Medications

In a climate of decreasing income and high health insurance premiums buying prescription medications can eat up a good chunk of your income, even if you are lucky enough to have prescription insurance. Here are some ways to help obtain necessary medications for less.·         

•  Generic medications: 

Insurance plans usually charge lower co-pay for generic medications. Generic medications are lower cost preparations of brand name drugs whose patents have run out.  Always ask you health care practitioner if a generic equivalent of your medicine would be just as effective.  Your doctor can advise you if a generic equivalent is not advisable (such as medications in which it is important to have a consistent steady state blood level of the drug) or even available.

A drug equivalent is not the same as a generic drug. They usually belong to the same class, may cost less but can just be as effective.  Ask your health care provider about this as well.

Pharmacy chains such as Wal-Mart and Sam’s Club have a list of over 100 generic medications for which they charge $4.00 for a month’s supply.  Many local pharmacies also have price matched this Wal-Mart offering so ask you pharmacist if they will match the $4.00 price.Check out Wal-Mart's $4.00 formulary here. Costco Pharmacy is another resource for less expensive generic medications. Anyone can avail of this pricing structure. If your health insurance co-pay is higher than $4.00, just buy the medicine outright.

• Understanding the tier structure of your prescription health insurance plan:

Note that your prescription health insurance may have different co-pay structures for different medications.  This is because there is a list of medications called a formulary.  The insurance health and pharmacy panel reviews the literature for the evidence base of the effectiveness of medicines for different conditions and they then assign these drugs to different tiers, usually first, second and third tier.

 Tier one include generic drugs which the FDA has determined to have the same bio-assayed ingredients and are as effective as the brand named drug. They have the lowest co-pay.

Tier two include brand named medications which are found to be effective for the conditions they are indicated and have middle range co-pay. Sometimes, the insurance company requires that a trial of a tier one medicine be tried before using the higher tier drugs.

Third and sometime fourth tier drugs are usually newer drugs for which effectiveness is still being evaluated. They have the highest co-pay which can reach over $100.00. Tier two to four drugs usually require a prior authorization from the insurance health plan.

• ·         Pharmaceutical company assistance:

Drug companies have indigent care subsidies for persons falling below a certain income level.  You will have to complete a form which details your income or lack thereof.  Your physician completes his part of the form and provides a prescription for a 3-4 month supply.  The medicine is either mailed to you or to the physician’s office.  You can avail of this service indefinitely as long as you fall within the guidelines.  Different companies have different requirements. Find a list of patient assistance programs here.

• ·         Prescription discount coupons:

Check with your pharmacy for discount coupons such as trial of new medication.  Your pharmacist can also find you the best deals on discount coupons for which you may qualify.

• ·         Take care of your health:

Living a health conscious lifestyle is the best way to save on health care cost.  Smoke cessation, mindful nutrition, exercise and learning stress management techniques can go a long way towards improving health.

Basics About Medicare, the Nation’s Largest Health Insurance Plan

Medicare, the nation’s largest affordable health insurance plan, is a government health plan that insures citizens age 65 and over, qualifying disabled persons and persons with end stage kidney disease.

Centers for Medicare and Medicaid Services

Medicare pays 80 per cent of the allowable health care charge.  Medicare has agreement with participating providers for a lower allowable charge for each medically necessary medical procedure reducing the charges for Medicare allowed reimbursement.  You are responsible for the remaining 20 per cent.  For this reason, many purchase another health insurance plan known as the tie-in plan to pay for the 20 per cent remaining bill. Important note:  If your provider is not a participating Medicare provider, he is not obligated to accept reduced Medicare fees and you can be liable for a higher amount.

Types of Medicare coverage:

·         Part A-The part of the insurance health plan that pays for hospital charges.  All Medicare eligible persons are automatically enrolled in this.

·         Part B- The part of the insurance health plan that pays physicians and other outpatient providers including medically necessary ancillary procedures such as physical therapy, home health care and some preventive services.  You pay a monthly premium for this service which is a set amount each year plus additional amount depending upon your last two year income tax return.  Those whose income fall below a certain amount are eligible for government subsidy of all or part of their Part B premium.

·         Part C- Also called Medicare Advantage,  are private health insurance plans which provide Medicare mandated services and usually other services such as preventive and health education programs.  They are required by law to provide at least all services provided by the Original Medicare plan.  Some also offer dental, vision and prescription insurance. You may choose to participate in either the Original Medicare or in a Medicare Advantage plan.

·         Part D- The part of Medicare which pays for prescription drugs.  You may participate in this through 1. Medicare Prescription Drug Plans (PDP)  or 2. Medicare advantage mentioned above.  Again, you pay a monthly premium for this and the government subsidizes the premium for those who fall below a certain income bracket. 

Beware of the Donut Hole

Beware of the Donut Hole: Medicare prescription drug plans pay for prescriptions up to $2830 in 2010 and $2840 in 2011.  Once you hit this spending mark, you are in the coverage gap or “donut hole.”  You become liable for your medicine purchase until you have spent $ 4,550 for the year at which point catastrophic coverage kicks in and the health insurance picks it up again.

Medicare remains the largest affordable personal health insurance plan.  For more detailed information request the free Medicare and You 2010 handbook through www.medicare.gov or call the 24 hour interactive phone line at 1-800 Medicare (1-800-633-4227) and TDD users at 1-877-486-2048. Download the pdf version at http://www.medicare.gov/publications/pubs/pdf/10050.pdf