UNDERSTANDING
HEALTH INSURANCE

Medical includes expenses for physician and hospital services and covers things like doctor visits, drugs given in your doctor’s office or other healthcare facility (drugs that must be given by a medical professional), hospital services and supplies, and some home-health services.

Pharmacy includes prescription drugs that you take by mouth and those you inject at home, like insulin.

Health insurance providers charge you a fee, called a premium, in return for paying a portion of these expenses.

Private health insurance, also called “commercial” health insurance, includes any plan you don’t get from the government. It’s usually available through your job and is the most common type of health insurance.

• If you aren’t covered through work or by public health insurance, the Patient Protection and Affordable Care Act (ACA) lets you buy health insurance from commercial companies online through a health insurance exchange. Learn more at Healthcare.gov

Public health insurance is run by the government. Medicare, Medicaid, Veterans Health Administration, and TRICARE are the largest government health insurance programs.

Medicare
Medicare mainly provides coverage for people who are over the age of 65, blind, or are disabled. About 14% of American citizens are on Medicare.* If you are 65 years or older, you are automatically eligible for Medicare. People at any age with certain disabilities or who have end-stage kidney disease or amyotrophic lateral sclerosis (ALS) are also eligible for Medicare.

It’s important to understand that Medicare has four different parts: A, B, C, and D. Your benefits will vary based on which of these you select.

PART A: This is your hospital insurance plan. It covers hospital stays, services while you are in the hospital (for example, tests to diagnose your illness), and some follow-up care after you leave.

PART B: This is your doctor and outpatient insurance plan. It covers doctor visits, outpatient care, durable medical equipment (DME), home healthcare, preventive services, and any service deemed medically necessary.

Together, Parts A and B are called “Original Medicare” to distinguish them from the newer Part C coverage discussed below.

PART C: Called Medicare Advantage (MA), Part C combines Parts A, B, and D (see below), often with additional benefits such as vision and dental care. It works a lot like commercial health insurance, and in fact MA plans are offered and run by commercial insurance companies selected by Medicare.

PART D: This is a stand-alone prescription drug plan that can supplement Original Medicare. It’s offered by private insurance companies to everyone enrolled in Part A or Part B.

Medicaid

Medicaid provides health coverage to millions of Americans (about 20% of all citizens*), including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. Medicaid is administered by your state, according to federal requirements. The program is funded jointly by states and the federal government.

Veterans Health Administration/TRICARE Department of Defense (DoD)

The Veterans Administration and DoD offer health insurance for people who are or have been in the military, including veterans, active-duty service members, National Guard and Reserve members, retirees and their families. Military insurance covers the healthcare needs of about 1% of the population.*

*Source: KFF.org. Accessed December 15, 2021 at www.kff.org/statedata.

Deductible
A set amount you pay for healthcare services each year before the health plan starts to pay its share.

Copayments (copay)
A set amount (for example, $20) you pay for a covered healthcare service or drug. Copays can vary for different services within the same plan, like drugs, lab tests, and visits to specialists. Some plans require you to pay the deductible before the copay starts.

Coinsurance
The percentage some plans require you to pay for services once you reach your deductible. For example, for a visit to your doctor, a plan might pay 80% and you pay the remaining 20%.

These expenses are also called out-of-pocket (OOP) costs, and what you pay depends on your plan. Commercial plans limit the amount you have to pay OOP each year. This is called your OOP maximum.

Healthcare plans usually have a network of doctors, hospitals, labs, and other facilities that they prefer you go to. These are called network providers, and you may have lower out-of-pocket costs if you stay in this network. If you go out of network, your out-of-pocket costs can be significantly higher.

You may see the terms PPO and HMO when you look at specific healthcare plans:

PPO stands for Preferred Provider Organization. This is a type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You can go to any doctor or healthcare facility you want, but you will pay less if you go to the ones that are in the plan's network.

HMO stands for Health Maintenance Organization. HMOs restrict patients to the providers in their network. They will not pay any of the costs if you go out of their network.

Your Summary of Benefits and Coverage (or Plan Document) will tell you exactly what you need to pay: your premium, what your annual deductible is, copays, and your annual out-of-pocket maximum, if there is one.

BY MOUTH (ORALLY)

• Pills and liquid medicines are usually taken at home
• Usually covered by your prescription drug benefits

BY INTRAVENOUS (IV) INFUSION

• Drugs that are infused into your veins are usually given at a hospital, clinic, or doctor’s office
• Usually covered by your medical benefits

BY SUBCUTANEOUS INJECTION

• Injections given under the skin can be injected at home, in a doctor’s office, or in another healthcare facility
• If given at home, they are generally covered by prescription drug benefits; an injection given by a healthcare professional will be covered as a medical benefit

You can pick up your medications at retail pharmacies like CVS or Walgreens that fill 30-day supplies of drugs you take at home.

Your healthcare plan may have a mail-order pharmacy where you can get 90-day supplies of drugs you take at home, often for less than what you would pay at the retail pharmacy.

Specialty pharmacies handle specialty drugs. Usually specialty drugs are expensive drugs you take at home that treat rare and complex conditions, such as HIV, cancer, autoimmune diseases, and organ transplants. They often require special handling, such as refrigeration. Specialty pharmacies also offer additional support that’s often needed with special medications, like financial assistance and education.

Medications given at your doctor's office or other healthcare facility are usually provided and billed by the facility.