Understanding insurance terminology and plan types

Often we receive requests for a health insurance quote with no age given. It is not possible to give a quote without knowing a person’s age. Why is age so important? Because your medical needs vary depending on your age. For example, women ages 22-40 will be charged a higher premium because these are childbearing years. Young men in their twenties will pay lower premiums because they tend to demand less medical care. Men over 55 will begin paying higher premiums than women of the same age because of men’s tendency toward high blood pressure, stroke, etc. Insurance companies have done very detailed studies over the years, and know which ages will demand more medical care. They adjust the premium charged to make sure they do not lose money on any age group.

Some insurance companies increase the rates they charge each year you advance in age. Others only increase rates every five years or ten years. For example, one company breaks down the various age levels as follows: 14 days-18 years, 19-29, 30-39, 40-44, 45-49, 50-54, 55-59, 60-64, 65-69, 70-74.

As long as you get your application in and ask for an effective date, even a day before your birthday, you will get the rate for your requested age. Thus if a person is turning 60 on January 1, and he get his application in and asks for a Dec. 31 effective date, he will get the rates for a 55-59 year old. According to one of my plans, that would save a person who is 59 years old approximately $1,200.

In an HMO (Health Management Organization) you must choose a PCP (Primary Care Physician). This physician will be your “Care Manager” in the health care system. Your PCP, if he finds it necessary, will generally refer you to a specialist working within the HMO. He directs all of your medical care, making sure you don’t receive unnecessary services. Sometimes the PCP is referred to as the “Gate Keeper” because he opens the gate and directs you to other providers within your HMO system.

A PPO (Preferred Provider Organization) is a network of medical and health care providers who agree to provide services for a specific amount and adhere to medical utilization guidelines. In a PPO you do not have a Primary Care Physician (although you may choose to have a physician function in that way). Instead you are given a list of physicians that work within a network. You can choose any physician you like and a different physician every time you have a medical need as long as you choose them from the list of doctors provided by the PPO, that is, as long as the physician is in the PPO network. Some PPOs have thousands of physicians in their network.

Some people feel HMOs are better than PPOs because they generally hold down the cost of premiums. They do this because the physician controls the extent of the care given. Others feel PPOs are better because the patient has more freedom and say in the choice of physicians and treatment.

Most of us, when we look at an insurance policy, ask, “What is covered?” That’s a good question. Another good question is, “What is excluded from coverage?” Sometimes by studying the “Exclusion” section you will quickly determine that the policy will not work for you.

I have listed a few of the 34 items on one company’s “Exclusion” list that say a lot about the policy: Pre-existing conditions; dental examinations; expenses of normal pregnancy; care of a new born child; treatment of acne; treatment for mental, nervous or emotional conditions or sickness; and treatment of Substance Abuse.

Often the “Exclusion” list is printed in such a way (small print, no paragraphs, etc.) that it is not easily read. Yet it is important that you check it out. Remember the old insurance adage: “The large print giveth and the small print taketh away.” The originator of the adage must have been thinking about the “Exclusion” list.

Co-pay? Deductible? Co-Insurance? I pay those three plus paying my monthly premium? That doesn?t sound fair!

A co-pay is the amount of money you pay when you are seen by a doctor. A doctor visit may cost $200 but if you have a $10 co-pay option, then all you pay is $10.

If you don’t have a co-pay option you will pay the full $200 and that amount will be applied to your deductible. In fact you will pay for all of your medical bills up to the amount of your deductible. If your deductible is $1,000 then, only after you have paid $1,000 for medical services will the insurance start covering costs for you.

Well, what happens after you reach the deductible? Then you split costs with your insurance company up to the co-insurance limit. Say you had a serious leg injury falling off your motor-bike. The total medical expenses came to $8,000. You do not have a co-pay but you do have a deductible of $1,000. This means you pay the first $1,000 of medical bills. The remainder now is $7,000. You have a 90/10 co-insurance benefit up to $5,000. This means that you will pay 10% of the next $5,000 in costs or $500. The insurance company will pay 90% of $5,000 which is $4,500. So now you have paid $1,5000 ($1,000 deductible + $500 co-insurance = $1,500). The total medical bill was $8,000 but $6,000 has not been covered. The good news is that the insurance company pays the remaining $2,000. And if the bill was $20,000 the insurance company would pay $14,000. The insured’s responsibility – Co-Pay, Deductible, and a Percentage of the co-insurance.

Several years ago the Federal Government in the USA passed the Kennedy/Kassenbaum Law. This law required insurance companies to offer health insurance coverage to US Citizens that met several conditions. If the individual had been on group health insurance for 18 months, did not have a gap of more than 63 days in coverage between the end of his group coverage and his application for HIPPA coverage, insurance companies were required to offer him coverage.

This is a wonderful benefit for a person who has major health problems and would not otherwise be insurable. Without this option many Americans would not be able to get insurance at all.

But there are a few caveats. The companies that offered HIPAA (Health Insurance Portability and Accountability Act) were allowed to rate up the HIPAA plans by 400 percent compared to their regular plans. Also, if the person had not been on group insurance, they did not have to offer coverage.

We have found that sometimes insurance companies will offer the HIPAA coverage even if the person has not been on group coverage. We have also found that international health insurance companies will provide COIs (Certificates of Insurance) explaining the dates a person started and discontinued group or individual insurance. We have found that individuals seeking to go on HIPAA coverage have had little difficulty apart from the rates.

I should also mention that companies seldom rate up their plans by 400 percent. Usually the increase is about 200 percent over standard plans.

Always get a “Certificate of Insurance” when you discontinue a job or lose your insurance. And make sure you apply for further coverage right away. If you exceed the 63-day window, they can refuse you coverage.

When an insurance company refuses to cover a medical expense and labels the medical problem as a preexisting condition, we often get upset and feel that the insurance company is not dealing fairly with us.

Know how the insurance company comes up with the preexisting designation on medical conditions.

First of all, they look closely at your application.

If you have written anything indicating a preexisting condition, that will be their first reason to label a condition “pre-existing.”

What’s a “pre-exisiting condition”? Check out https://www.gninsurance.com/resources/ask-Jeff/understanding-insurance/pre-existing-conditions/

Your doctor’s records are also important.

Often we forget what we told a doctor during past office visits. And we don’t know everything the doctor writes down on his records.
If an insurance company is seriously investigating coverage for a preexisting condition, they will ask for your doctor’s records. They may
also contact the doctor personally, especially in big(ger) cases.

If you have stated something on your application that indicates a possible pre-existing condition

Even if the doctor’s records do not mention that medical condition, if you have stated a condition that may be serious, the insurance companies may exclude coverage based on what you wrote on your application.

If you are concerned that preexisting conditions are covered

If you are concerned that all of your preexisting conditions be covered, make sure that you get an insurance plan that covers them. There are plans that provide limited and also total coverage for preexisting conditions for travel up to one year, as well as for those moving overseas. Always feel free to call us at 480-813-9100 in the USA or Skype “Good Neighbor Insurance” from anywhere in the world. You can also ask about plans that meet your specific needs at [email protected]. Please let us know your name, age, your destination and whether other will be traveling with you as well as the length of your trip and any specific questions or concerns that you have. This will help us give you the best recommendations and save you time.

The goal of medical evacuation services is to save a patient’s life and/or limit the extent of an injury. If the patient’s condition is stable and not at risk from flying, insurance companies will fly him to the nearest adequate medical facility. For example, if he is in Cambodia they would fly him to Bangkok, if in West Africa, to France. Once stabilized, if needed, they will fly him to his home country.

International health insurance companies provide insurance coverage for people all over the world. No insurance company is large enough to have their own fleet of planes available in every country. Instead, they have contact with medical evacuation services and planes worldwide and can quickly sub-contract a plane for a medical evacuation.

Many international insurance companies have divisions within their company that handle medical evacuation 24/7 for clients. One company GNI works with has 10 nurses and 1 Medical Officer (doctor) in their medical evacuation division.

Depending on the physical location of the patient medical evacuation can happen quickly, often within 2 to 3 hours. Here is the general procedure:

1. The insurance company is contacted concerning a needed medical evacuation.
2. The Medical Evacuation Division in the company makes a quick and complete evaluation of the illness or injury. This is generally done in consultation with a physician that works with the insurance company and medical personnel that are on the ground stabilizing the patient.
3. Evaluation of the physical / geographic location of the patient, e.g. nearest airport and nearest adequate medical facilities are considered.
4. The patient is evacuated to the nearest adequate medical facility and once stabilized if medically necessary, evacuated back to their home country.
5. If the medical condition is not overly serious they will use a common carrier for the evacuation often sending along medical personnel to assist the patient in flight. If very serious they will charter a plane from a medical evacuation company in the region.

Not one of us likes a “waiver” or “rider” on our health insurance coverage. A waiver/rider is an insurance company’s method of excluding certain pre-existing conditions from coverage. For example, you have had surgery on a knee due to a soccer injury. The company places a rider on the knee, which means a recurring problem to that knee will not be covered.

What about a “rate-up”? Some companies will “rate-up” the amount of premium charged for the policy instead of using a rider, but this is not a general practice with international insurance companies.

The other method of covering pre-existing conditions is “capped coverage.” In this situation the company does not cover the pre-existing condition for the first 24 months, and then limits coverage for the condition to $5,000 a year for the next ten years. This is better than no coverage on a pre-existing condition.

The best option is to accept a “temporary” rider. Often a company will remove a rider after 24 months if you have had no recurring problems with the pre-existing condition. Overall, a rider is preferable to capped coverage if there is a possibility the rider can be lifted at a later date.

Credit cards do offer travel assistance. You might ask, “Then why do I need to buy travel insurance?” The differences are significant. Here are eight questions to ask about your credit card travel assistance:

1. What are the details? Always read the fine print. Remember: The big print giveth and the small print taketh away!
2. Who do I contact if I get sick or injured and need coverage? The last thing you want when you are in need of medical care and/or evacuation is a voice message.
3. Do I know how much coverage I will need? This is vital since credit card companies are not in the international health insurance business.
4. Will I get reimbursed if I have to pay up-front for my medical care? Remember, the overseas medical staff is not going to wait until your credit card company pays.
5. Will my credit card company provide me with the best hospitals and doctors for my medical needs, or will I go to the “general” population hospitals that may not be “A” rated?
6. Will I pay a deductible on my credit card benefits? We have plans that have no deductibles and some with deductibles. Our evacuation plans have no deductible or co-pays.
7. Will my pre-existing medical conditions be covered? Our Excursion and Trip Protector plans cover pre-existing conditions. You can see these plans at www.overseashealthinsurance.com
8. Will my credit card coverage bring my mortal remains back to the USA and pay for the red tape and government paperwork? Our international health plans do this without a penny out of your loved-one’s pocket.

The first precaution when purchasing insurance and thinking about your pre-existing conditions is to read the ?small print? in the exclusion section of the policy brochure. If your pre-existing condition is ?totally? eliminated from any coverage, it will be listed there.

It is important to remember that there are almost no short-term plans that will provide coverage for pre-existing conditions. Because of this the rates on these short-term plans are generally very cost-effective.

If you plan to purchase a long-term policy study their pre-existing condition definition. Here is one we have taken from a company brochure.

A pre-existing condition is defined as an injury or illness which was contracted or which first manifested itself; or for which manifestations of symptoms would have caused a prudent person to seek medical advice or treatment; or for which a licensed physician was consulted; or for which treatment or medication was prescribed within the five years prior to the effective date of the insured person’s coverage.

Some definitions will limit their look back to various time periods, from 6 months to 60 months.

Some long term plans put riders on pre-existing conditions while other will rate up the monthly premium and still provide coverage. Of course some companies will put permanent riders on specific pre-existing conditions that exclude the pre-existing condition from coverage as long as you are on the policy.

The good news is that some short-term plans provide limited coverage for ?unexpected recurrences of a pre-existing condition.? This means that if you broke your leg three years ago and everything has been fine and all of a sudden you start having problems with your leg, their would be limited insurance coverage for that pre-existing condition.

When purchasing insurance read the fine print relating to “Pre-Existing Conditions.” This may determine whether or not the insurance will meet your needs. (We have plans that also include pre-exisiting conditions if that choice fits you better. For short-term travel. For living overseas more than one year.)

Each company has their own definition of a pre-existing condition.

Here is the definition of “Pre-Existing Conditions” taken from a policy that gives medical coverage for foreign nationals visiting the USA:

A pre-existing condition is defined as an injury or illness which was contracted or which first manifested itself; or for which manifestations of symptoms would have caused a prudent person to seek medical advice or treatment; or for which a licensed physician was consulted; or for which treatment or medication was prescribed within the five years prior to the effective date of the insured person’s coverage.

The following is a “Pre-Existing Conditions” definition for a domestic policy offered in the USA:

Any injury or sickness, or any complications there from which is present or manifest itself, or for which medical care, treatment, advice or consultation was rendered to a Covered Person with the 12 months period prior to the Effective Date of Coverage. Any injury or sickness shall be considered to be present or manifest if the condition or symptoms exist prior to the Effective Date of coverage, even though no diagnosis, care or treatment were sought or received.

A general rule about pre-exisiting conditions:

A pre-exisiting condition is something you have been seen by a doctor for already, anything you may be taking medication for, any change of medications in the last 6 months, even a condition you may currently have – but may not be aware of (such as kidney stones which develop over time).

Different companies put a time limit on what is considered a pre-existing condition.
The first company above gives a five-year look-back as the time span for determining a pre-existing condition. Among the various policies we handle the following time limits are given: 6 months, 12 months, 24 months, 5 years, 24 months, 60 months, etc.

Having pre-existing conditions does not mean that your insurance rates will be higher.
But, if your pre-existing conditions fits into a company’s definition for such, it may mean that those specific conditions will not be covered by your insurance (excluded). Or may be subject to a time limit without a re-accurence before being covered.

How does an insurance company determine a preexisting condition?
Go to https://www.gninsurance.com/resources/ask-Jeff/understanding-insurance/determining-pre-existing-conditions/

Before you buy insurance, get information on any “Pre-Existing Condition clause(s).

Otherwise, you may think some medical problem will be taken care of even though it is clearly excluded from coverage because it is a pre-existing condition.

As always, we are happy to help. If you have a question regarding coverage or options, write us at [email protected] and if we don’t know the answer, we’ll ask the carrier(s) and get you an answer. If in doubt, buy a plan with better coverage and better networks/provisions. In most instances the additional amount is minimal and the additional protection is well worth it.

Here are the plans that include pre-exisiting conditions if that fits you better. For short-term travel. For living overseas more than one year.

However, these plans presume that you are a U.S. resident in the U.S. at the start of your trip, and have ACA-health coverage now.

1. If you are non-U.S. or not in the USA right now,
   • Consider this ATLAS plan that includes some pre-X.
   • Consider BUPA if non-U.S. and non-Canadian resident.

Many people are perplexed because health insurance companies won?t cover pre-existing conditions. This is an area where all insurance companies are very careful. This is one of the main reasons for medical underwriting. Insurance companies know that if they cover all pre-existing conditions they won?t be in business long. For example, if an applicant has a back problem and is taking medication that costs $100 monthly, an insurance company will lose money immediately if the monthly premium is $90. And then, even if the applicant is not taking medication but has had major back problems, the risk factor of a recurring problem is very great. Insurance sales people often ask the question, ?Would you insure a burning building?? Of course no one wants to be compared to a ?burning building,? but we get the picture. You insure a burning building, you are losing money; you insure a person with serious pre-existing conditions, you are losing money. In Arizona a couple of years ago two bona-fide companies were not careful in their underwriting, and had to leave the insurance business because of steep losses.

Always read carefully the pre-existing clause/exclusion in your insurance brochure. If a company says that they will cover all of your pre-existing conditions, beware of that company–they won?t be around long. An insurance company cannot cover all pre-existing conditions and continue to compete with the premiums of other companies.

So always make sure how a company is going to handle pre-existing conditions. A pre-existing condition can go back to your childhood. Be aware of that. If something happened to you 20 years ago, and it hasn?t bothered you since, it can still be classified as a pre-existing condition. Always make sure you know how a policy defines and covers pre-existing conditions.

Underwriting is no more than a process to determine if you are an insurable risk. The people who do the research and make the decisions about your insurability are called underwriters. In a sense all of us do underwriting every day, for it is no more than an evaluation of risk. Every time you cross a street, you underwrite the situation first by determining if you can get across without being struck by a car. In other words, you determine if there is any risk involved.

Insurance is a business with a bottom line. When a person applies for insurance, and has a medical condition, i.e., bone cancer in his left foot that the medical profession has been treating for ten years at a cost of $3,000 a month, will an insurance company insure him with a premium of $100? The underwriter will look at the records, and if good reason indicates that medical treatment will continue at $3,000 a month, the insurance company would be foolish to insure the individual. By so doing they would lose at least $35,000 a year. If they insured many cases like that, they would go bankrupt or have sky-high premiums.

As a rule the companies with the tightest underwriting guidelines have the best rates and are the best companies to insure you. Because they are careful who they insure, they will remain stable and be able to keep their rates lower than average.

The underwriter has one task–to determine risk, to determine what possible financial outlay may be necessary to care for a person’s medical condition. If they calculate the possible outlay as excessive, the applicant is declined medical coverage. You wouldn’t insure a burning building; likewise, underwriters make sure that their companies do not insure us if it is certain that we have a medical condition that might cause the company to lose money.

When they do insure us, and we then develop medical problems, they are required by law to cover our expenses. But the underwriters made a decision before the medical condition arose (or with the knowledge of a present medical condition), that we were an insurable risk.

All short-term insurance plans underwrite their clients after there is a medical problem. This means that they find out if the medical problem relates to a pre-existing condition, and thus exclude it from coverage. For most long-term plans underwriting is done at the point of application. One international carrier explains it like this:

“Underwriting at the Point of Application: Some of our competitors do not underwrite the business until a claim is filed. We underwrite at the point of application. Meaning if it goes through underwriting, and there are no Riders attached, the client knows that the condition will be covered. If Riders are issued, the client knows exactly what conditions will be considered pre-existing and for how long those specific conditions will not be covered.”

If you buy a “guarantee issue” plan (which means underwriting is done after you receive the medical care), you can expect a fairly long wait before claims are paid. The reason is that the insurance company will do extensive research to make sure that the medical care was not provided due to a pre-existing condition.

Remember as your portion of the co-insurance increases, your monthly premium will drop. Thus a 50/50 plan will be less expensive than an 80/20 plan.

As insurance brokers, the first thing we do after asking a person for their age, is to ask for their weight. Most of us don’t enjoy divulging that information, but in order to suggest an insurance plan for you, it is absolutely necessary.

Insurance companies know that a person’s weight has a great bearing on their overall health. Therefore, they have all generated “Weight Charts.” The charts are similar but not identical. According to the chart of one company you might be considered uninsurable, whereas another company would consider your weight within their guidelines. So don’t be discouraged if one company declines you for coverage due to weight–just contact another company.

Sometimes companies will not give weight charts to brokers, therefore, in some cases we can only guess if the company will consider you overweight. And by the way, they also have minimal weight guidelines. You can actually be declined if you are underweight.

A few companies will accept you for coverage if you are overweight, but they will rate up your premium by 15 or 20 percent. That is certainly better than being declined coverage. What happens if you lose weight? If you have a doctor’s report that you have lost weight, you may be able to get the company to discontinue the rate up on your premium after you have been on the plan for a year.

Sometimes if your weight is still acceptable, but you have high blood pressure and cholesterol problems, you will still be declined. The correlation between weight and certain diseases may make an insurance company cautious about offering coverage.

The good news is that we have some three-year plans that are “guarantee issue” plans and never ask concerning your weight. If you feel you may be overweight for health insurance coverage, contact us, and we will help you sort through the weight charts and options for health insurance coverage.

Several years ago the U.S. government passed the Health Insurance Portability and Accountability Act (HIPAA). This bill made it possible, among other things, for people coming off of group insurance to be able to get individual health insurance.

Previously, if a diabetic lost his/her job and then tried to get individual health insurance, they would have been declined. Now, if they have proof of having been insured on a group policy, they cannot be denied coverage on an individual plan.

The “proof” they need to provide is called a “Certificate of Insurance?” or a “Certificate of Creditable Coverage.” The company that had previously provided them with group insurance will provide them with a certificate stating how long they have been on group insurance. If there is not a gap of more than 63 days between the date they dropped the group insurance and take out the new insurance, they will automatically be accepted for coverage on the HIPAA plan offered by the insurance company.

Providing a “Certificate of Insurance” also enables an enrollee in a group plan to avoid a 12-month waiting period before pre-existing conditions are covered.

First of all co-insurance is not “co-pay.” Co-pay is the money you pay to the doctor in the USA for an office visit. Co-insurance is not “deductible.” The deductible is the amount of money you are required to pay for medical expenses before the insurance kicks in and starts providing reimbursement for medical costs.

“Co-insurance” is called “Co” because it includes a sharing of medical costs between the client and the insurance company. Co-insurance amounts are stated as percentages; for example, 90/10, 80/20, 70/30, 60/40, 50/50. The most common co-insurance percentage is 80/20. What this means is that the company will cover 80 percent of the medical expenses after the deductible, and the client will cover 20 percent of the medical expenses after the deductible. Almost always a cap is put on the amount that is to be covered by the co-insurance, usually $5,000 but sometimes $10,000.

So if you have an insurance plan with a $1,000 deductible and co-insurance at 80/20 with a cap at $5,000 in a worse case scenario you would need to pay out $2,000. Here is how it would work: You would obviously pay your $1,000 deductible. Then you would also pay 20 percent of the next $5,000, which would be $1,000. The insurance company would pay the other $4,000 and all expenses beyond $5,000.

Remember as your portion of the co-insurance increases, your monthly premium will drop. Thus a 50/50 plan will be less expensive than an 80/20 plan.

Technically, any medical condition that you have had prior to your application for health insurance with a given company can be considered a pre-existing condition. If you have been to a doctor about a sore elbow, even though it was four years ago and even though you received no treatment whatsoever, an insurance company could consider that a pre-existing condition.

Maybe you never went to a doctor, but had been aware for some time of a pain in your elbow. It didn’t bother you continually, but every once in a while you took an aspirin to alleviate the pain. The pain in the elbow could also be considered a pre-existing condition.

Insurance companies vary on coverage for pre-existing conditions. Some will cover pre-existing conditions that were treated three years ago, others four years ago, still some even five years ago. You can generally find a statement about how an insurance company will handle a pre-existing condition by going to the “Exclusion” page in the insurance brochure.

These are terms insurance companies use to explain special exceptions to coverage in their insurance plans. For example, you may have injured your knee playing tennis and needed some minor surgery. Six months later you applied for insurance. On the application you mentioned your knee surgery. The underwriters at the insurance company decided that since the surgery was recent there was a notable risk of recurrence. Otherwise you were healthy, and they wanted to offer insurance, but they felt they could possibly lose money due to your knee problem. What do they do? They put a “rider” (“waiver”) on the knee, which simply means they will insure you but waive covering anything that happens to the knee. In other words they will insure your whole body except your knee. They will exclude covering anything that happens to the knee.

Sometimes these “riders/waivers” are permanent. Other times the company will issue a two-year, three-year or five-year rider. If the condition does not deteriorate or recur over a period of time, often they will “lift” the rider and give you full coverage. The option of using “riders” is good for the insurance companies and for the general public because it enables the companies to insure people whom they would otherwise decline to cover.