Health Insurance Basics

We are an Independent Health Insurance Agency!

Health insurance is available to consumers in a variety of plans and coverage's. Listed here are some of the most common insurance carriers.

Blue Blue Shield of Michigan

Health Alliance Plan (HAP)

Priority Health

United Health

Liberty Union

Delta Dental 

Eyemed

etc

• Major Medical
  Pays the cost of hospital bills and medical bills. You pay any appropriate co-payments and deductibles. The policy covers only the eligible expenses listed.

• Managed Care
  Provides preventive care and services basic to good health. Out-of-Pocket costs are generally less than traditional health insurance. Care is given by the plans network of doctors and hospitals. The managed care plan could be through a traditional health insurance company or a health carrier that provides managed care plans only. Managed care always has a provider network with specific rules to follow if you need care. These plans cover basic care, which is often not included in major medical coverage.

• Hospital-Surgical
  Pays only expenses directly related to hospitalization, which usually includes room and board plus doctors' charges.

• Short-Term
  This coverage lasts for only a specified length of time, but for no longer than 180 days in any case. For example, you might buy a six-month policy with major medical coverage for the months that you are between jobs and between group coverage. These policies do not cover pre-existing conditions.

• High Deductible Plans
  These plans are Major Medical coverage, but are sold in conjunction with Health Savings Accounts. They pay the cost of hospital and medical bills, but have very high deductibles that you pay from your federally tax exempt health savings account.

• Accident Only
  Pays only when you are treated for accidental injury or if an accident causes death.

• Disability Income
  Pays a fixed amount for a specified period of time when you are unable to work because of an accident or illness.
  

• Hospital Indemnity
  Pays a flat amount (such as $100 per day) when you are hospitalize.
  
• Long-Term Care
  Pays to take care of you for an extended time in a nursing home or your own home. See the Shopper’s Guide to Long Term Care Insurance at: www.michigan.gov/documents/cis_ofis_ltcshop_23739_7.pdf
  
• Medicare Supplement
  Pays some medical expenses not paid by Medicare. (See the Choosing a Medigap Policy at www.medicare.gov/publications/pubs/pdf/02110.pdf
  

Traditional health insurance or coverage through a commercial insurer are often called "fee-for-service" because the insurer pays the bills after you receive the service.

• You can use any doctor or hospital.
  
• The medical bills must be sent to the insurance company.
  
• You will likely have to pay a deductible before the policy begins to pay and co-payments each time you have a claim.
  
• If the policy pays less than the full bill, you may be responsible for paying the rest.

HMOs provide preventive care and other services that are basic to good health. Your out-of-pocket costs are generally less than traditional health insurance. Care is likely given by a network of doctors and hospitals under contract with the plan.

Your managed care plan could be through a commercial health insurance company, or you might be covered by a carrier that provides managed care plans only (an HMO).

Regardless, if you have a managed care plan, there is a provider network. Be sure to follow your plan's network rules when you need care.  More detailed information about HMOs is available at http://www.michigan.gov/cis/0,1607,7-154-10555_12902_35510_36780---,00.html

Throughout these web pages, it will be helpful to know if you qualify as a HIPAA eligible individual. You are a HIPAA eligible individual only if you

• Have 18 months of creditable coverage (see below),
  
• Were most recently covered by an employer group,
  
• Were not terminated from your group plan due to nonpayment of premium or fraud,
  
• Obtained new coverage by midnight of the 63rd day of your last coverage,
  
• Are not eligible for Medicare, Medicaid, or any other group coverage,
  
• Have exhausted all continuation of benefit options such as COBRA, and
  
• Do not have any other health insurance.

• A group insurance policy may cover two to thousands of people, but it is still only one policy.
  
• Your employer or trade association is the master policyholder; you and your fellow employees are certificate holders.
  
• Each family member covered under your certificate is an insured.
  
• The master policyholder negotiates the terms of a group policy with the insurance company.
  

The master policyholder can:

• Reduce or change the benefits and coverage,
• Increase your share of the premium,
• Switch to another insurance company, or
• Stop providing any coverage!

In a group contract:

• Rates for employer groups are negotiable and are not regulated by the Office of Financial and Insurance Services, except in the instance of Blue Cross Blue Shield of Michigan.
  
• The contract must include specific minimum benefits required by state law —other benefits are negotiated by the master policyholder.
  
• The master policyholder does not need consent of certificate holders to change companies or policies, cancel the policy or agree to new premiums or benefits.

Large and small employer group contracts:

• May cover more conditions than individual contracts.
  
• May have more generous benefits.
  
• Cannot reject an application because of poor health as long as the application is made during the eligibility period.
  
  Large employer groups are defined as having more than 50 employees.
  
  Small employer groups are defined as having 2 to 50 employees.