Let's Talk Insurance

So, I want to piggyback on Colin's last post and dive into insurance lingo and how it all works.  Some of this will be pretty basic for all of you that are masters of the insurance world, but it's important to revisit and let's face it a refresher never hurt anyone. This the first step in that explainer to understanding how treatments get paid. In Step 2 we will put it all together.

Step 1 - Insurance Lingo[1] 

Benefit: This is the term for what your insurance plan pays for - medical care, etc.

Deductible: The amount you pay before the insurance pays anything. When someone discusses high deductible health plans, sometimes called HDHPs, this amount will often be close to the out of pocket maximum for the insurance.

Exclusions: These are the things your insurance will not pay. Often this is stuff like cosmetic procedures or those outside the given number that your insurance allows every year. For example, if your insurance will pay for six chiropractor sessions, any number of sessions above that number will be excluded.

Co-Insurance: This is a cost-sharing mechanism. You pay some given portion of a type of care until you reach your out of pocket maximum. These co-insurance costs are often around 20% of the cost of that category of care.

Copay: This is a set amount that you pay for a defined service. The most straightforward example is the $20 you pay at your primary care doctor every time you go in for an appointment.

Out of Pocket Maximum: Often shortened to OOP max (at least in my lexicon), this is the maximum you will have to pay before your insurer covers all costs. This charge includes copay and co-insurance amounts. There is a statutory limit on OOP max set by the Affordable Care Act.

Major Medical Insurance: This is the part of your insurance that covers inpatient and outpatient costs other than most drugs. This is important because it includes certain injectable drugs and devices, but the things covered by major medical insurance depend on the benefits outlined in your plan documents.

Prescription Insurance: Your prescription insurance covers the drugs you receive. Again, depending on your plan, this may include your immunoglobulin treatments, but those can also be paid under major medical. I hope to explain that in further detail going forward. It is not uncommon to have a separate copay, coinsurance and OOP max for this as well.

Network: Your insurer has special contracts in place with specific providers and negotiates rates with them. They want to pay less for your care, so they incentivize keeping your care inside their given network by giving you better coverage within their network of providers and pharmacies. These are sometimes called preferred providers. [2]

Step 2: Now let's put this all together.

I will explain some other terms moving forward, but again it is essential to understand the basics of the second part of this post.

I want to start by talking through the process of going to your doctor's office to have a checkup. That checkup is covered under your major medical coverage. During that visit, your doctor may recommend a certain course of treatment that requires prescription medication. Your prescription coverage covers those medications. Depending on your plan and physician, you pay a copay amount as you leave the appointment. Some insurance plans require you to pay the full in-network cost of your doctor's appointment - that's because you need to meet your deductible before they share the cost of your care.

Deductibles don't always include physician office visits, but that just muddies the waters, so I'm going to try and stick to the simplest iteration of each scenario to get the basics down. We will talk in another post about some of the more complex issues.

You have your prescription in hand and go to your favorite neighborhood pharmacy. They fill your prescription. Depending on your prescription insurance, you will pay either a copay or coinsurance. Most prescription insurance is based on tiers - generic medications are cheaper to the insurance company, so the company passes along some of those savings to you in the form of a lower copay. Easy peasy.

Because of the special nature of immunoglobulin therapy, the coverage is treated a little differently. The first few parts - the doctor's visit and such - are the same, but the way these medications are covered is a bit different, in part because they are so expensive. This also means they are not stocked at your favorite local pharmacy. You must source them from a specialty pharmacy. We've talked a lot about those, but this isn't about the quality of the system, but more trying to give you an idea of how it all comes together. 

Those specialty pharmacy drugs - in this case, your immunoglobulin - are covered in a couple of ways. Some insurance plans cover these special drugs under your major medical plan. That means your pharmacy charges your regular major medical insurance for the drugs and related services, like your pump or nurse or time in an infusion suite. Some insurance plans cover these drugs through your pharmacy plan. This matters more on the back end, with billing, but it is important because it could affect the drugs that appear to be covered by your plan and your cost sharing. It is often helpful to have your insurance run a test claim in both scenarios to see which makes the most sense regarding your flexibility and financial burden.

It's vitally important also to make sure you're using an in-network or preferred pharmacy for your treatments because that substantially reduces the amount of out of pocket costs you will owe. If you're talking to your insurance, ask them which pharmacies are in the network, then have those pharmacies run a test claim. Sometimes, because of the rare and expensive nature of the drug, it can be difficult to determine the best way to get your medication covered.

This is intended to be the first in a series of conversations about insurance, how it works, and how to better understand your plan because it's so very important for all of us. If you have particular questions about your insurance plan or how to navigate it, please email me at lisa@immunecompetence.org. I will do my best to answer your question or point you to the right sources to find an answer. We'll talk more soon about referrals, restrictions, and all of the other things that make insurance more complex.  

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[1] Common Health Insurance Terms and Definitions. Accessed at: https://www.wpsic.com/members/smart-consumer/healthinsuranceterminology.shtml

[2] Healthcare.gov Glossary. Accessed at: https://www.healthcare.gov/glossary/