Now that open enrollment under the Affordable Care Act is over for this year, healthcare consumers can begin to put their insurance policies to work. For many, it may be a challenge.
A year ago, Norm Wilkinson, 61, retired after 35 years as a Teamster and signed on to a retiree health plan. He figured he'd enjoy the same comprehensive coverage he'd had for years, but soon learned that prescription drugs weren't covered.
"I did not get a prescription drug plan with it, and that was the big killer," said Wilkinson, a resident of Whittier.
His wife takes a blood pressure medication that ended up costing the couple $300 a month. "We were used to paying $20 and getting a three-month supply," he says.
Now he's on a Covered California policy, and he says he's carefully checking every detail.
Elizabeth Sammon has been uninsured for years. The 54-year-old mother from Placentia just got health insurance for the first time since 2007 and found the process of selecting a plan and learning how to use her coverage was overwhelming.
"It was very confusing," she says. "They use a lot of insurance jargon the average person can't figure out."
Searching for health insurance is one of the more dreaded shopping tasks for consumers, says Betsy Imholz, special projects director with Consumers Union, the parent organization of Consumer Reports.
But using health insurance once it's in place isn't much easier.
A study published last year in the Journal of Health Economics asked people with private health insurance to define four basic concepts: deductible, co-pay, co-insurance and out-of-pocket maximums. It found that just 14% were able to accurately explain all four terms.
With more people gaining access to coverage because of the Affordable Care Act, experts fear a lack of understanding about health insurance signals growing problems ahead.
"There will be a lot more disputes because there are a lot more customers and expectations are high," says Claremont attorney William Shernoff.
Outlined here are some pitfalls to watch for as you review your insurance.
Know your plan's name. Imholz of Consumers Union says one major source of confusion you may face this year can be the name of your policy.
For example, if you purchased a Platinum-level health plan from Anthem Blue Cross, it's called Platinum 90 PPO on Covered California, whereas it will be referred to as Anthem Platinum Direct Access on your ID card and listed as Pathway X-(PPO) Individual via Exchange/Platinum DirectAccess on the Anthem website.
Imholz says this problem will be fixed in time for next year's open enrollment, but in the meantime, it could leave consumers struggling to figure out which doctors participate in their plan or what services are covered.
Know what your policy covers and what it doesn't. Many people mistakenly believe that having insurance means they'll automatically get help paying for any medical service they receive, Shernoff says.
"Covered California doesn't mean everything is covered," he says.
Shernoff says it's crucial for people to look at their health plan's exclusions section. "There will be a whole list of things not covered, and that's important to start with," he says.
Also pay particular attention to the list of drugs your plan does and does not cover, whether the doctors and hospitals you wish to use participate in your health plan, and any rules you must follow to get full reimbursement for the care you receive.
You can get help by viewing a chart showing health plans and their various names on the Covered California website (coveredca.com).
Understand your costs. People buy health insurance to keep their medical costs down. Even so, insurance typically pays only part of the cost and consumers are left to pay the rest — up to an annual limit. It's all part of the cost-sharing agreement between you and your insurer.
Figuring out just what you'll spend on your next doctor visit or medical procedure, however, is no simple task. The problem starts with all those complicated terms used to describe the various forms of out-of-pocket costs.
For example, co-pays are fixed fees paid upfront for a medical visit or prescription drugs, such as $20 each time you see your doctor.
A deductible is the amount you'll have to pay for services your health plan covers before you get any help covering your bills. Although deductibles don't always apply to all services, if your deductible is $1,000, your plan won't pay anything until you've met your $1,000 deductible.
Co-insurance is the percentage of the cost of your care that you're responsible for paying, generally after you've met your plan's deductible. It applies to some types of medical services and prescription drugs.
Typically, the maximum amount an insurer will pay is some percentage of what's considered "usual, customary and reasonable."
That means if your health plan says the most an office visit in your area should cost is $100 and your co-insurance is 20%, you would be responsible for $20. You insurer pays the rest of the allowed amount.
Imholz says co-insurance is the concept people find most perplexing. "People can easily misunderstand when you see a $30 co-pay and 20% co-insurance. Which is going to be more expensive? Who knows!" she says.
Know when to pay. After a doctor's visit, you'll receive what's called an explanation of benefits. It shows the service you got, how much your doctor charged and what portion of that charge your insurer paid.
The documents generally state at the top that they aren't bills, but many patients don't realize that and pay-up too soon.
Before sending any money to your doctor, check the paperwork to make sure your insurer paid its portion, says Cheryl Parcham, program director for Families USA, a Washington advocacy organization.
"If it hasn't been paid for, talk to your provider and make sure they've talked to the insurance company before you even think about paying anything," she says.
Sammon is glad to finally have health insurance but says the details of the policies are too difficult for most people to grasp. Insurers, she says, should do a better job of making it less confusing. "I shouldn't have to constantly pick someone's brain apart to get answers."
Resources and links:
Zamosky is the author of a new book, "Healthcare, Insurance, and You: The Savvy Consumer's Guide."