Insurance issues

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Insurance issues
Kate Schafer, LICSW, National Childhood Cancer Foundation
Cure Search

Having a child diagnosed with a serious health condition means that parents must learn to navigate through the often-confusing world of health insurance. It is important for families to understand their current health insurance coverage, or their other options if they lack health insurance. First steps would include making contact with the social worker and the financial or billing office at the child’s treatment center to try to understand and minimize problems.
Commercial health insurance

Most families have health insurance provided through an employer. Human Resources personnel at work can help explain the benefits included in an employee’s current coverage. In addition, every employee should receive a Plan Book upon enrolling in a health insurance plan. This book describes in general terms the benefits covered, and any specific exclusions. There are several different models of commercial insurance coverage that define where an individual can receive health care, how that health care will be paid for, and how much a family will have to pay.

Most employer-provided health insurance falls into some category of Managed Care. In general, Managed Care models try to provide a range of health care services in the most cost-effective manner. Some common Managed Care Models include:

* Preferred Provider Organization (PPO) - In this model, a health plan has a contract with a group of physicians, hospitals, laboratories and other health care providers. It is most cost-effective for a patient or family to select care providers within this "network." There is no restriction on getting care outside of the "network," but there may be more out-of-pocket costs.
* Point-of-Service Plan (POS) - In this model the health plan encourages but does not require a patient or family to select a Primary Care Physician (PCP). A PCP makes referrals for care within the network. Patients and families can choose to go to an out-of-network provider but this may mean higher deductibles and higher out-of-pocket costs.
* Health Maintenance Organization (HMO) - In this model the HMO has a contract with specific health care providers (physicians, hospitals and laboratories and other providers) and provides prepaid, comprehensive services to its members. Members often pay a co-payment or set fee for office visits and other services. Members must have a PCP within the HMO and must be referred for specialty care within the HMO network. In rare circumstances if there is no specialist within the HMO, a referral for an out-of-network provider can be sought from the medical director of the HMO.

Other health care coverage

Medicaid - Medicaid was created in 1965 as part of the Social Security Act. A federal program administered by each state, Medicaid provides medical assistance to low-income individuals and families. Each state sets its own eligibility criteria. There are some services that must be covered under Medicaid and others that are optional. Each state decides who is eligible and what will be covered. Many Medicaid programs require patients and families to participate in a "Managed Care" model of service.

Children with cancer living in low-income families are usually eligible for Medicaid either through their community Medicaid program or through Supplemental Security Income (SSI). SSI is a federal program administered by the Social Security Administration. Eligibility is based on family income and disability. Children with cancer most often qualify as disabled for this program but must also meet eligibility criteria based on family income and assets. The program can provide monthly financial aid to children who meet the qualifications. Children who meet the qualifications for SSI are eligible for Medicaid, but must still apply for it. Call the nearest field office to inquire about the application process.

S-CHIP - State Children’s Health Insurance Programs (S-CHIP) was established in 1997 as part of the Balanced Budget Act. This program allows states to offer health insurance plans for children up to age 19 who are not otherwise insured. S-CHIP programs allow a higher income level than Medicaid, and is intended for working families whose employers do not offer health insurance, or situations in which that insurance would be too costly. Some S-CHIP programs have extended benefits to the parents of eligible children.

COBRA - The Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefits provision passed in 1986 allows individuals to continue their employer provided health insurance plan at the group rate when they are no longer employed.

* The law applies to employers with 20 or more employees during the previous calendar year.
* Qualified beneficiaries are required to pay the full cost of the premium (both the employer and employee amounts). Coverage can be terminated due to failure to pay the premium. If the premium amount is too costly, it may be possible to seek assistance from Medicaid or from the treating hospital.
* A qualified beneficiary is an individual covered by a group (employer-provided) health plan on the day before a qualifying event. This can be the employee, the employee’s spouse, or the employee’s children including those born or adopted during the period of COBRA coverage. Length of continuation of coverage is either 18 or 36 months.

Qualifying events for COBRA Benefits

For employees

* Termination of employment either voluntary or involuntary except for "gross misconduct" (18 months)
* Reduction in hours (18 months)

For spouses of employees

* Termination of employment of covered employee’s employment (18 months)
* Reduction in hours worked by covered employee (18 months)
* Covered employee becoming entitled to Medicare (36 months)
* Divorce or legal separation from covered employee (36 months)
* Death of covered employee (36 months)

For dependent children of employee

* Same as those for spouse and loss of dependant status under the plan rules (36 months)

Employers are required to notify employees of their eligibility for COBRA continuation of coverage. Employees have 60 days to decide to elect this coverage.
HIPAA

The Health Insurance Portability and Accountability Act, a law passed in 1996 provides protection of health coverage for individuals who have a preexisting health condition. Before this law was passed, individuals with a health condition could be excluded from getting health insurance with a new employer. Families of children with cancer found themselves "stuck" in jobs due to a fear that their child would be excluded from a new insurance plan and would be unable to continue treatment. The law applies to employer-provided group health plans.

* Limits exclusions for preexisting health conditions - A preexisting condition is one in which medical advice, diagnosis or treatment was received or recommended in the six months prior to enrollment in a new health plan. (Enrollment is the first day of coverage on a new plan or the first day of the waiting period for eligibility for coverage.)
* Pregnancy or the health conditions of a newborn or adopted child are exempt from preexisting condition exclusions. Genetic information, in the absence of a diagnosis, is not treated as a preexisting condition.
* The maximum amount of time that a preexisting condition exclusion can apply is 12 months after the enrollment date on a new plan.
* A plan must reduce the preexisting exclusion period by the number of days that an individual was covered by a previous health plan. The previous health plan must issue a letter or certificate of creditable coverage reflecting the prior coverage. The preexisting condition exclusion does not apply if an individual has been covered continuously on a health plan, including COBRA continuation of coverage, Medicaid, S-CHIP, or Medicare for twelve months prior to enrolling in a new health plan, and there has not been a break in coverage of 63 days or more.

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