Understanding Health Insurance and Health Care Costs. Theresa Milazzo Emory HR

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1 Understanding Health Insurance and Health Care Costs Theresa Milazzo Emory HR

2 Agenda What is health insurance? Important concepts How do I choose a health insurance plan? What can I do to lower my costs? Important Tips!

3 What is Health Insurance? A way to pool costs and risk among a large group to make the cost of health care affordable Four major parties of interest in employer-provided health insurance: Employer Emory Covered person or member employee and family Insurance company or vendor Aetna and Medco Provider doctors, hospitals, pharmacies, durable medical equipment providers, home health agencies, dentists, etc.

4 Important Health Insurance Concepts Summary Plan Description SPD On the benefits web site What is covered and any limits or rules Plan exclusions Appeals process Eligibility definitions Other great resources on benefits web site: POS Plus Plan in Detail POS Value Plan in Detail HDHP in Detail

5 Important Concepts Plan Design Employee contribution: amount you pay monthly or biweekly to be covered by insurance Co-pay: fixed amount you pay for a doctor s visit or prescription Deductible: amount you pay out of pocket for care not covered by co-pays, before the insurance plan picks up any cost Coinsurance: amount you pay once the deductible is met, as a percentage of the cost of care (insurance picks up the rest) Out of pocket maximum: the maximum amount the insured person has to pay for care EXCLUDING co-pays

6 Example of How Deductible and Coinsurance Work You have charges of $7,800 for an inpatient stay Your deductible is $800, your coinsurance is 30%, your out of pocket maximum is $3,000 (POS Value) You pay: Deductible $800 Coinsurance 30% x $7,000 = $2,100 Total $2,900 Then you have charges of $1,000 for a procedure You pay: Coinsurance 30% x $1,000 = $300 BUT this is reduced to $100, because you have now met the out of pocket limit of $3,000 All future care this year is now covered at 100% (except copays)

7 Thought Question Why do we have copays, deductibles and coinsurance? Why not have just a premium, and the care you get is free?

8 Important Concepts Pretax Accounts Flexible Spending Account: pretax account that can be used to pay for deductibles, coinsurance, and other health care costs use it or lose it Health Savings Account: pretax account that can be used to pay for deductibles, coinsurance and other health care costs must be in conjunction with a high deductible health plan portable and doesn t expire

9 Important Concepts Types of Plans PPO POS HMO High Deductible Plan

10 Important Concepts Charges Provider network group of providers that have agreed to accept the insurance company s negotiated rates Provider charges standard charge for each element of health care as determined by the medical coding Discounted charges Aetna s negotiated rates for each element of health care Explanation of Benefits (EOB) summary statement provided by Aetna that shows the provider charges, negotiated/allowed charges, plan payments, and the amount the patient must pay

11 Important Concepts -- Emory Provider Network The Emory Clinic Wesley Woods and Midtown affiliated physicians (but not their partners practicing at other locations) Emory Specialty Associates Emory Clark Holder Clinic Emory University Hospital Emory University Hospital Midtown Emory Johns Creek Wesley Woods Hospital Emory Orthopaedic and Spine Hospital Children s Healthcare of Atlanta (Egleston and Scottish Rite) Grady Medical Center Hughes Spalding Emory Adventist

12 Example Statement Emory Healthcare

13 Example of EOB from Aetna

14 Example of EOB from Aetna Date and Type of Service Emory Univ. Hospital 9/12/2010 Submitted Charges Negotiated Your Deductible Amount Remaining Paid at Plan Pays Patient Resp. Incidentals % Incidentals % 25 3 Imaging 5, % ,639 1, ,

15 Important Concepts Pharmacy Benefits Retail vs. mail order Use mail order for long term maintenance drugs lower cost Generic vs. brand Generic drugs are bioequivalent to the underlying brand Generally 10% to 40% of the cost of brand drugs Preferred vs. non-preferred brand Tier Tier 0: generic drugs for certain chronic conditions Tier 1: most other generics - $12 Tier 2: most preferred brands - $25 Tier 3: most non-preferred brands - $50 Tier 4: personal choice - $70 The Pharmacy at Emory

16 Important Concepts Medical/Dental DMO Dental Maintenance Organization Like an HMO has NO out of network benefits Plan limits Currently have limits on dental ($1500), speech/physical/occupational therapy (90 visits), chiropractic (20 visits) and several others Prior authorization/precertification Required for certain procedures and inpatient hospitalizations Allowed Amount/Usual and Prevailing Cost/Reasonable and Customary May reduce the basis for reimbursement for out of network claims You may be balance billed

17 How do I choose a plan? All Emory plans have the same networks, covered expenses, health management tools and programs. The differences are: Monthly/biweekly contributions Deductibles, coinsurance, copays Out of pocket maximums Availability of Health Savings Account with High Deductible plan Use the Health Plan Calculator (Aetna Plan Selection and Cost Estimator) to compare costs based on your estimated usage Also consider: How comfortable am I with ups and downs in what I pay for health care? Can I afford the out of pocket maximum if the worst happened?

18 Plan Selection and Cost Estimator POS Plus HDHP w/hsa POS Value Expected Cost of Health Services Annual Paycheck Premium Amount Employee Pays Deductible Copays/Coinsurance Total Employee Cost Health Plan Pays Preventive Care Other Benefits Total Health Plan Costs Health Fund Beginning Balance Health Fund Pays Ending Balance

19 What can I do to lower my costs? Choose and use your plan wisely Use Emory Provider Network when available If not, Aetna National Network providers Doctor s office over urgent care Urgent care over ER Primary care over specialist (unless you re referred for a serious problem or have an existing relationship) Generic over brand drugs Preferred brand over non preferred brand drugs Mail order over retail Ask questions often, there are treatment options

20 What can I do to lower my costs? Take care of your health Lowers costs today and in the future Pay attention Errors in charges Duplication of services Don t overinsure More than 70% of employees are enrolled in the most expensive plan Not everyone needs that level of insurance Take advantage of tax free savings Health Savings Account and Flexible Spending Account

21 Important Tips! If you have a baby Congratulations! Please add the baby to your health insurance immediately! Always call Aetna or Medco first with an insurance issue. Not the provider Not the benefits department If you get a call from Aetna or Medco please call them back!

22 Aetna Emory s Partner Aetna Navigator web site Aetna health management programs Health Insurance for Dummies Planforyourhealth.com

23 Other Health Care Resources Faculty Staff Assistance Program Behavioral Health Wellness AFLAC Supplemental Insurance