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December 2004
Greetings!
I hope all of you are staying warm, dry and healthy. I envisioned writing sooner, but I was waiting for confirmation about rate increases and benefit modifications. Just after Thanksgiving, I learned that Blue Shield will be increasing rates effective 2/1/05 and will modify some benefits. Regardless of your carrier, please read this memo and feel free to contact me if you have any questions or concerns.
During the last year, I have had the pleasure of being in direct contact with some of you. I love hearing from you and being kept in the loop about all the changes going on in your lives. Please continue to call or send email as the year progresses.
At times, I have helped you sort out insurance claims. My goal in this arena is to begin the process by pointing out the problem to the carrier. I then pass things back to you for follow up. If time permits, or if you feel the carrier has incorrectly decided your claim, I will often re-involve myself.
It has become clear to me that there is general confusion about how deductibles, negotiated rates, copayment/coinsurance and yearly maximum copayment/coinsurance limits work together. The following glossary will help you better understand these terms. I am always happy to review a carrier's Explanation of Benefits.
Annual Deductible:
The amount you have to pay first, before your health plan starts to pay. Many PPO plans will waive the deductible for certain things. (eg:. Blue Cross PPO Share plans waive the deductible for office visits and the Blue Shield Spectrum Savings Plan waives the deductible for annual physicals when you see a Blue Shield provider.)
Negotiated Rates:
These are rates that medical providers have agreed to receive as total payment for a given procedure or type of visit. If a provider is contracted with your carrier, that provider must accept the negotiated rate and cannot bill you for the difference between the negotiated rate and the rate they might charge another client. Always refer to your Explanation of Benefits for clarification about your financial responsibility.
Copayment or Coinsurance:
The amount of money you pay when you receive a covered service. Copayments are fixed dollar amounts and coinsurance is a percentage. Many plans have both components.
Annual Out of Pocket Maximums:
The most money you pay in any one calendar year for qualified, covered services. Once you have paid this amount, your plan will pay 100% of the rest of eligible costs for the remainder of the year as long amount, your plan will pay 100% of the rest of eligible costs for the remainder of the year as long as you remain in-network. If you use out-of-network providers, you will pay more.
Explanation of Benefits:
This is the statement the insurance company sends you regarding your medical visits. The Explanation of Benefits will clearly outline your information, the provider you saw, the date of your visit, the procedure code, the amount the provider charged, the amount you owe (if any) and any amount the provider received from your insurance carrier. In network providers cannot charge you more than the amount that is indicated on the Explanation of Benefits. If you are seeing an in-network provider, they must offer to file the claim with the insurance company. If the medical provider insists you pay the full amount for your visit at the time of your appointment and you do not have a flat dollar amount co-pay, you should insist that the provider confirm the amount you owe by contacting your carrier.
Additional Benefits that come with your plan:
The carriers tend to have a variety of additional benefits. Depending on the carrier, you may be able to get a discount on a vision exam. Your carrier might offer discounts on modalities like massage, yoga or acupressure through certain providers. I encourage you to check your carrier's web site for further information.
https://www.bluecrossca.com
https://www.mylifepath.com (for Blue Shield)
https://www.healthnet.com
https://www.pacificare.com
A Special Message about Prescriptions:
You've likely been hearing a lot about presciption medication costs. For those of you who do not have outpatient prescription coverage or have only generic coverage, I
encourage you to compare prices online. There are many sites, but I have found the prices at Costco to be very competitive. You do not need to be a Costco member to purchase medication. Visit their site at https://www.costco.com
A Word About Health Savings Accounts (HSAs):
Most of you know that I am a big proponent of high deductible plans that keep premiums low. I particularly like the Blue Shield Spectrum Savings Plan. Though other carriers offer HSA eligible plans, I feel Blue Shield has the best plan. If you are considering an HSA, I suggest you discuss this with your tax advisor first. There was a good article on this subject in the 11/28/04 edition of the San Francisco Chronicle entitled "State rules complicate health savings accounts." The gist of the article is that California has not conformed to the federal tax law that created these accounts. This means that these accounts will provide fewer tax benefits and will require more record keeping for those who elect them. The link for this article is http://www.sfgate.com/cgibin/article.cgi?file=/chronicle/archive/2004/11/28/BUGHRA014T1.DTL I can also mail you this article if you prefer.
Please do not disregard HSAs and HSA eligible plans altogether. I have always advised clients to consult with their tax advisors before electing this type of plan. Above all, as a client of mine (who happens to be a CPA) reflected, the insurance portion needs to make sense on its own, regardless of any tax benefits that might be derived.
I wish all of you good health and much happiness for 2005!
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