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Understanding Health Insurance Options: A Guide for People Living with Duchenne Muscular Dystrophy and their Caregivers

Health insurance is a contract between you and an insurance company. Health insurance helps pay your medical bills when you need care.

There are two major types of health insurance:

  • Private Health Insurance: Families and individuals obtain insurance privately, through an employer or group sponsor, or privately by buying direct from an insurance company or from a state’s insurance exchange.

  • Public Health Insurance: Families and individuals may qualify for state insurance benefits based on income, employment status and/or being disabled. Medicaid is the most common state health insurance benefit for people under age 65.

Knowing what options are available can help save you time, money and frustration.

Private Health Insurance


Insurance companies pay all or a portion of a person’s medical costs as determined within the plan’s statement of benefits. Some insurance companies have arrangements with specific health care providers, clinics and hospitals, which are part of the plan's network. These arrangements, called managed care, provide care at lower costs.

Buying insurance, whether from an employer’s list of available plans or other private coverage option may be confusing due to types of plans offered and the various expenses. Families and individuals need to determine their expected needs and budget before choosing a plan. A good place to start is understanding the available types of plans. 

There are three main types of managed care programs:

  1. Health maintenance organizations (HMOs) are plans which usually pay only for medical care within their network of health care providers. Costs are typically less than with plans that offer a greater choice of providers.  An HMO will have a strict list of doctors, hospitals and clinics in which members obtain healthcare services.

  2. Preferred provider organizations (PPOs) are plans which cover more of your medical costs if you get care within the network of care providers. PPOs negotiate rates with providers, hospitals and clinics. PPOs still pay some costs for care outside of the network, yet a greater portion of the cost is passed along to the family or individual policy holder.  

  3. Point of service (POS) offer more flexibility in choosing doctors and hospitals. Policy holders can choose between an HMO or a PPO each time you get medical care.


The least restrictive health insurance plans are Fee for Service or Indemnity Plans. These plans allow policy holders to decide the provider or facility for healthcare, yet plan holder costs are typically higher than with managed care plans.

Out of Pocket Costs


Many private plans provide estimates of annual out of pocket plans to help buyers when choosing a plan. Comparing several factors is needed to determine which type if plan is best for you and/or your family’s specific circumstances.  Out of pocket expenses include plan premiums, deductibles, co-pays and co-insurance costs.

Types of out of Pocket expenses:

  • Premium: This is the cost of a health insurance plan paid by the insured. Premiums are based on whether a plan covers an individual, couple or family. Payments may be weekly, monthly, quarterly or annual to ensure coverage is available.

  • Coinsurance: The amount you have to pay for a medical expense after you meet your deductible. For managed care plans, coinsurance may be higher for services obtained outside of the network or from a preferred provider.

  • Co-pay: A set fee you pay each time you receive certain types of medical care. For managed care plans, co-pays may be higher for services obtained outside of the network or from a preferred provider.

  • Deductible: A set amount that you will pay for your health care each year before your insurer helps you pay the costs. Some insurers, though, may help you pay for certain services-such as a wellness checkup-whether you've reached your deductible or not.

Out of Pocket Maximums


Based on annual premiums, coinsurance, co-pays and deductible, insurance plans have an annual out of pocket maximum for individuals and families. Once an annual dollar total of premium, co-pays deductible and any coinsurance is reached, this becomes the most you will pay for healthcare each year (for covered services) and all further medical care is covered 100% by the insurance company.

Out-of-pocket maximums are typically between $1,000 for an individual and up to $11,000 for a family. Once you reach the out-of-pocket maximum, insurance pays for 100 percent of your medical care (for covered services).

How you reach that out-of-pocket maximum is based on how much you pay for your medical care up front. This depends on your deductible and coinsurance percentage.The higher your deductible, the lower your monthly premiums will be, because you are willing to pay for some of your care up front.

Other Considerations


Other insurance considerations include prescription drug coverage and Health Savings Accounts (HSA).

Prescription Drug Coverage

Health insurance obtained from a state’s Health Insurance Marketplace and small employer plans are required to provide prescription drug coverage. Large employers are not required to provide this coverage, yet most do. Prior to purchasing an insurance plan, review the Summary of Benefits to determine whether prescription drugs are covered.  

An insured individual or family will either pay a co-pay or coinsurance for prescriptions. Coinsurance is a set percentage of the drug's cost, such as 20 or 30%. With other health plans, you pay a prescription copay, which means you pay a fixed amount for each medicine you buy, such as $5 or $10. Drugs are listed in a plan’s “formulary” and not all prescription drugs are covered by a plan. Furthermore, each plan divides drugs into two or more “tiers”. Co-pays and coinsurance rates are different based on the drugs in each Tier. Generic drugs are least expensive and specialty drugs will cost the most. 

Health Savings Account

A health savings account (HAS) is a tax-exempt account a person or employer sets up to save money for health care costs.These plans allow an individual or family to set aside up to a specific pre-tax dollar amount annually, sometimes an employer may contribute to this fund, that is used to cover medical expenses. An HSA is only allowed with a Qualified High-Deductible Plan. The Internal Revenue Service (IRS) determines the requirements for a Qualified High-Deductible Plan.

To learn more about the differences in available private health insurance plans, speak with your employer’s benefits administrator or human resources specialist, financial advisor or insurance agent.  

Public Health Insurance


Medicaid
is a state-run, government insurance program that helps some people with lower incomes, disabilities and other specific circumstances pay for medical care. Medicaid pays your health care provider. Some programs require a co-pay for certain medical care and not all plans cover every procedure or treatment.

Medicaid Availability


Medicaid is available to certain low-income individuals and families who meet eligibility requirements. Rules about who is eligible and what services are covered vary from state to state. States determine financial eligibility based on household income and assets. Income is compared to Federal Poverty Levels and families and individuals whose income is below the state’s standard may be eligible for Medicaid. Financial assets are also used to determine eligibility which includes savings and other factors, yet may exclude a family’s home, personal vehicle and other resources. 

Having a medical condition in which an individual is considered disabled under the Social Security Administration’s (SSA) definition for disability is another way in which people may qualify for Medicaid. Even when an individual is not considered eligible for Social Security Disability benefits, they may be eligible for Medicaid. Because states use the SSA definition, applying for SSA disability benefits is part of the process when applying for Medicaid.

  • Children’s Health Insurance Programs (CHIP): CHIP covers uninsured children and teens up to age 19 in families with incomes too high to qualify for Medicaid.

  • Pregnant women: Pregnant women may be covered based on financial eligibility and states have the option to cover under CHIP.

  • Adults: Medicaid may cover eligible adults with disabilities, adults with income that is below an income standard expressed as a percentage of the Federal Poverty Level and parents/caregivers of disabled children.  

 

Medicaid Waivers


Under current federal law, states may expand coverage to certain groups of people based on certain criteria it deems appropriate. In some states this expanded coverage is provided to families of children with exceptional health care needs who would not otherwise meet eligibility exceeding income and asset requirements. The concept of providing Medicaid as a secondary or primary insurance option to assist families is an effort to help children remain in the community and from being placed in a nursing care facility provided the cost of coverage does not exceed the cost of placement. Often referred to as a “Katie Beckett” or home and community based waivers, these programs provide full or additional coverage for many. These waivers vary considerably by state, including the number of people covered, services provided and whether there is a waiting period for application and coverage.

Other waivers programs are provided to people with specific conditions, such as Autism or developmental disabilities, pay for services allowing a disabled person to remain at home rather than in a nursing care facility (when financially appropriate), allow a covered individual to direct payments for services and supports including who they choose as a caregiver and provide respite for caregivers.

To learn about Medicaid programs including your state’s Children’s Health Insurance Programs and Medicaid Waivers, visit Benefits.gov.

 

Thank you to Brian Denger for developing this resource for the PPMD community.

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Comment by Jason Darienzo on March 29, 2017 at 4:11pm

Disabled children of Medicare recipients are eligible for Medicare aswell as Medicaid

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