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Insuring Your Health... Page 2
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Indemnity Plans
Fee-for Service plans are still the most popular
choice for individual health care. With this type of arrangement, you pay a monthly fee to
your insurance company. You also pay a deductible before your insurance company pays for
their share of the bill. Deductibles typically range from $100 to $1000. The higher your
deductible, the lower your premium.
Many companies label their plans 80/20 or 90/10. The first number is the
percentage amount the insurance company is going to pay (80% in the first case). The
second number is what you'll pay above and over any deductible (20%). Your portion is
called a co-payment. In exchange for higher premiums, indemnity plans normally
offer a broader network of health care providers.
Government Health Plans
- Medicare. Government-run program that provides health care for people
age 65 and over and those who have permanent kidney failure or certain disabilities.
Medicare consists of Part A and Part B coverage. Part A covers hospital inpatient care,
home health services, skilled nursing, and hospice care. If you're eligible for social
security benefits, you automatically qualify for Part A coverage. Part B requires you pay
premiums for services such as diagnostic tests, ambulance transportation, outpatient care,
and emergency room visits. Part B pays 80% of covered services. You're responsible for
paying the remaining 20% plus a $100 deductible for each calendar year. The 1999 Part
B monthly premium is $45.50. This amount is automatically deducted from your social
security payment unless you decline Part B coverage.
Medigap. Medigap is private
insurance designed to help you pay for costs not covered by Medicare including coinsurance
and deductibles. There are 10 standard types of medigap policies. Each offers a different
combination of benefits.
Medicaid. Program run jointly by Federal and State governments.
Provides health coverage for certain low-income and needy families, the elderly, and other
disabled persons. Covers inpatient and outpatient hospital services, nursing services,
home health care, pre-natal care and delivery services for pregnant women. Operates on a
vendor program where direct payments are made to the health care provider.
Congressional Omnibus Budget Reconciliation Act (COBRA). COBRA is not
insurance. It's a law that allows you to maintain health care coverage should you lose or
leave your current job under special circumstances -- disability, spouse's death (and you
were covered under their group coverage), downsizing, or age. With COBRA, you keep interim
coverage until you've completed your transition. After that, you may be allowed to convert
your old plan to an individual policy with the same carrier. Your new coverage will
probably be more expensive and carry fewer benefits than your original plan.
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