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2.3. Forms of Insurance

Since 1992, there has been a strong move to contain the spiraling costs of health care. Today, health insurance is offered in three major formats:

  • Third Party Payors,
  • Health Maintenance Organization (HMO), and
  • Preferred Provider and Point of Service Organizations (PPO/POS)

There are three government-funded health insurance plans that it is important for the person with a SCI/D to know and understand:

  • Medicare
  • Medicaid
  • Social Security Disability Insurance (SSDI)

Major Health Insurance Formats

  • Third Party Payors - Insurance companies or organizations that sell commercial insurance to employers, process claims, and pay providers. There are two categories:

    1. "Fee for service" (traditional kind of health care policy) pays providers a fee for the services provided to the insured; offers consumers the most choices of doctors and hospitals. In most cases, the insurance covers 80% of the charge and the patient pays the remaining 20% coinsurance.

    2. Managed Care Organization (MCO) A payor organizes a group of providers, called a network, who have agreed to provide specified health services to persons who enroll in the MCO plan. The network providers are paid according to a predetermined, contracted rate. (Because of lower costs to employers, MCOs have almost entirely replaced the indemnity "fee for service" plans in the U.S.)

  • Health Maintenance Organization (HMO) These are prepaid health plans for which there are several existing models; the major differences in the models exist in the relationship between the HMO and the participating physicians. You or the insured, the HMO member, pay(s) a monthly premium.

    In exchange, the HMO provides comprehensive care for you and your family, including doctors' visits, hospital stays, emergency care, surgery, lab tests, x-rays, and therapy. The HMO arranges for this care; usually, your choices of doctors and hospitals are limited. However, exceptions are made in emergencies or when medically necessary.

  • Preferred Provider and Point of Service Organizations (PPO/POS) These are mixed model plans that blend a combination of MCO and HMO features. A PPO, similar to an HMO, has a limited number of doctors and hospitals from which to choose and requires that you choose a primary care doctor to monitor your health care.

    A POS offers a broader selection of providers; the insured selects the provider of choice when the medical services are needed. When you use PPO/POS providers (sometimes called "preferred" providers, other times called"network" providers), most of your medical bills are covered.

    Usually there is a small co-payment for each visit; for some services, you may have to pay a deductible and a co-payment. If you choose (a) provider(s) outside of the network, coverage payment may be less and you may pay a larger deductible or co-payment. Covered services most often included preventive care such as visits to the doctor, well-baby care, immunizations, and mammograms.

Government-Funded Health Insurance Plans

There are three government-funded health insurance plans that it is important for the person with a SCI/D to know and understand:

  • Medicare 1 a federal health insurance program for persons who are disabled and have received Social Security Disability Insurance (SSDI) for at least 24 months, and for persons 65 years of age or older. Medicare has two parts; these do not cover the same things:

    1. Part A covers inpatient hospitalization, skilled nursing facility care, and hospice care. It will pay for some home health care services, however, you must need skilled care and be homebound. Most people don't have to pay premiums for Part A coverage, but you will have deductibles to pay.

    2. Part B covers inpatient and outpatient physician services, as well as outpatient therapies, limited medical supplies and medical tests, and some durable medical equipment (DME). (DMEs require a Certificate of Medical Necessity (CMN) submitted by your physician) Part B is optional, requires a monthly premium, an annual deductible, a copayment for each visit or service.

  • Medicaid is a federal program that is administered by the states. It provides medical assistance for persons with low-income and limited assets. Medicaid covers inpatient and outpatient hospital care, physician services, home health care services, medications, and some supplies.

  • Social Security Disability Insurance (SSDI) [www.ssa.gov/applyforbenefits] is for one who is permanently disabled; eligibility is based on one's prior work history under Social Security and determined by the Social Security Administration.

    1. If you are permanently disabled and have been receiving SSDI benefits for 24 months, you will then be automatically enrolled in Medicare

    2. Please note: SSI is not an insurance program. SSI disability payments are made on the basis of financial need. SSI recipients are automatically enrolled in Medicaid, i.e. State Medical Assistance. There are several differences in the eligibility rules for SSI and SSDI.2

Inquire about your eligibility for Medicare/Medicaid as soon as possible following your injury. If you are still in acute rehabilitation, seek the assistance of your social worker or discharge planner. Begin the application process immediately. The approval process is lengthy; periodic inquiries to determine status of the application is appropriate and encouraged.

1 Understanding the Benefits, p. 24. Social Security Administration, Publication No. 05- 10024, January 2000
2 Disability Benefits, p. 1. Social Security Administration, Publication No. 05-10029, September 1999



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