Table of Contents. Other Sections Consumer Resources...16 Acronyms, Glossary and Definitions...18

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1 Table of Contents Private Health Insurance Toolkit - Overview... 2 Getting Started... 3 This section helps you identify what materials you will need to gather to fill out the Worksheet Personal Health Experience Status Sheet... 4 This section allows you to summarize your health care utilization in order to understand your needs in choosing a new health care plan Health Plan Cost Comparison Worksheet... 5 This section is a worksheet for you to record and compare health care plans costs and benefits Fact Sheets: Prior Authorizations A summary of the need to authorize certain procedures and medications Alpha-1 Coding... 8 Listing of medical coding used by providers and payors Medicare... 9 Information about Medicare related hospital insurance, outpatient and clinical services, supplemental private insurance and Prescription Drug Coverage Appeals & Grievances This section will help you understand the appeals process Other Sections Consumer Resources...16 Acronyms, Glossary and Definitions...18 The Affordable Care Act and the New Marketplace An Overview: The Health Insurance Marketplace/Exchange Making Benefits Easy to Understand Premium and Cost Sharing Subsidies...35 Requirements to buy coverage and standards for Health Insurance Plans...37 Where do I go for help with insurance questions and/or problems?... 39

2 Private Health Insurance Toolkit Overview Whether it is an individual or family policy offered through your employer (a group health plan) or one you acquired as an individual, there are many things to consider when reviewing your options. These considerations usually fall under one of two categories: cost or benefits. Our goal is to help you evaluate the benefits you receive for the cost of the plan you select. Questions you ask may be: 1. What is the monthly/annual premium for the plan? 2. What is the sum total of my out-of-pocket costs, including medical and prescription co-pays, deductibles and co-insurance? 3. Does it cover all the services I need? 4. Are my physicians covered or are they out-of-network? 5. Are there annual limits? If so, is it a maximum annual benefit limit based on dollars or on number of visits or both. If you have a Grandfathered plan, check with insurance company for limits. 6. Are out-of-network benefits available? What percentage of cost will be your responsibility if you receive out-of-network benefits? 7. Am I covered if I get sick while out of state? 8. Are physical therapy services covered? Home nursing? For those affected by Alpha-1, there are often additional, more specific, questions one must ask that relate to what benefits are covered and how, such as: 1. Is my preferred augmentation therapy covered? If so, is it a major medical or a pharmacy benefit? 2. Do I have a choice of more than one pharmacy provider? 3. Is augmentation therapy covered in the home setting? 4. Is durable medical equipment covered? Look at your specific needs. 5. Is pulmonary rehab and physical therapy covered? 6. Do I need a referral to see a specialist? 7. What services require prior authorization? Answers for many of the questions above, both relative to cost and benefits, can be found by reviewing your plan s Summary of Benefits and Coverage, drug formulary list and provider network directory. This is one of the most important steps you can take to ensure that a plan meets your needs. It is important to remember that once you choose a plan, you cannot change until the next enrollment period. The Health Plan Cost Comparison Worksheet is a tool designed to assist you in performing a side-by-side general comparison between health plans that are available to you. Included in this Toolkit is a brief overview of selected portions of the Affordable Care Act to help you understands certain facets of the new healthcare law that could assist you in choosing a healthcare plan. Special attention has been given to what kind of assistance is available in getting through the healthcare maze, where to go for help with questions and/ or issues and how to find out if you qualify for Premium and Cost Sharing Subsidies. 2

3 Getting Started Step 1 Step 2 Prepare the Personal Health Experience status sheet Collect the following documents from your Insurer for each plan you are considering. If you are evaluating employer-sponsored insurance, your Human Resource representative may be able to provide these documents. (Note: often you will be provided a link to this information on the insurer s website.) A. Summary of Benefits and Coverage (SBC) This document is a summary of information about health plan benefits and coverage containing key benefits and cost-sharing provided through the health plan. It will include information about the covered health benefits, out-of-pocket costs, and the network of providers and will have access to a Uniform Glossary that defines insurance and medical terms in standard, consumer-friendly terms. B. Drug Formulary - Health insurance companies maintain a formulary, which is a list of prescription drugs, both generic and brand name that are available through your health plan. A formulary classifies drugs into different cost tiers categories that define the plan member s co-payment or co-insurance levels. Prescription drug plans financially reward patients for using generic and lower-tier formulary drugs by requiring the patient to pay progressively higher co-payments or co-insurance for drugs on higher tiers. Does the plan use step therapy or prior authorizations? C. Provider Network Booklet - A provider network is a group of providers (such as physicians, pharmacies, hospitals and others) who are contracted to provide health care services to plan members. These providers have agreed to see members under certain rules, including billing at contracted rates. To get that price, a patient must be covered by a particular health plan that uses that network. A patient has less or no insurance coverage if they see a provider who is out of their network with some health plans. D. Health Savings Account or Flexible Spending Account - If your employer provides either of these programs have printed copies of the details available as well. A Health Savings Account is a medical savings account available to individuals enrolled in a high-deductible health plan that meets certain federal rules for out-of-pocket costs. The funds contributed to an account are not subject to federal income tax at the time of deposit. Health care Flexible Spending Accounts are employer established benefit plans that reimburse employees for specified medical expenses as they are incurred. The employee contributes funds to the account through a salary reduction agreement and is able to withdraw the funds set aside to pay for medical bills. Step 3 Begin using your Health Plan Cost Comparison Worksheet by using the information from your summary of benefits and drug formulary to fill in each section that applies to your insurance needs on the worksheet. You could use a pencil to make changes or make a photo copy of the worksheet. If the data you need is not available in the information provided to you, call your Human Resources, Benefits Administration or insurance representative. 3

4 Personal Health Experience Status Sheet Please see Consumer Resources in this guide for information on additional resources. Choosing a health care plan can be very confusing. There are many things to consider, however two of the most important are cost and benefit design. When trying to determine your potential out-of-pocket costs, it is important to determine which benefits you (and your family, if you are all on the same policy) typically use and how often you use them. This will help you project your out-of-pocket costs for the upcoming benefit year. The easiest way to do this is to ask yourself the following questions: In the past twelve months I have : Visited my primary care physician times. Spouse has visited his/her primary care physician times. Child(ren) have visited their primary care physician times. Been seen by a specialist times. Spouse times. Child(ren) times. Visited an ER or urgent care center times. Spouse times Child(ren) times Purchased number of prescriptions (including for my family) at my pharmacy. Purchased number of specialty medications (i.e. augmentation therapy) through a specialty pharmacy or medical benefit. Been admitted to a hospital for an overnight stay times. Spouse times Child(ren) times Needed home health services (such as nursing care) times. Required rehabilitation services (such as pulmonary rehab and/or physical therapy) times. Required oxygen therapy 4

5 Health Plan Cost Comparison Worksheet Information for the worksheet can be found on the health plan s Summary of Benefits and Coverage document generally available on the insurance company s website or call the insurer if you do not have internet access or cannot find the information you need. 5

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7 Prior Authorizations Prior Authorization is the process used by insurers to gain additional information, typically from your physician or healthcare provider, before providing coverage of some medications, medical equipment and supplies. Prior authorization differs from precertification, which is often required before inpatient admissions and select hospital procedures and services. In the case of both prior authorization and pre-certification, the insurer may deny coverage if approval is not secured prior to accessing the treatment or service. Please note that definitions of certain terms may vary across insurance companies. Insurers make individual decisions on when prior authorization and pre-certifications are necessary. It is important to check with your insurer to understand their requirements, including any restrictions on out-of-network providers. Unfortunately, there are situations in which a formal prior authorization procedure is not required, but a plan may still deny coverage of a medication or treatment. If prior authorization is needed, discuss this with your physician to ensure they are aware of the requirement. Follow up to ensure all of the necessary forms are completed and approved before accessing the service. Examples of documentation that are often required in order to access augmentation therapy include: 0 Diagnosis codes for alpha-1 antitrypsin deficiency and emphysema 0 AAT serum level including phenotype and, if available, genotype 0 Test results which document emphysema and airflow obstruction 0 Other pertinent information such as hospitalizations, use of antibiotics, activity level and exacerbations. Once prior authorization is granted, the process may need to be renewed after a defined period of time. This is called a reauthorization. A physician may be required to provide a progress report and updated tests to secure reauthorization. This will vary by plan and the benefit being approved. It is important to keep track of when the authorization expires to maintain continuous coverage. 7

8 Alpha-1 Coding A standard medical coding system, used universally by billing departments, insurance companies and CMS (Centers for Medicare and Medicaid Services), is necessary to facilitate reimbursement for services rendered by healthcare providers. Typically you would see the coding below used on your EOBs (Explanation of Benefits), insurance claims and/or medical bills in regards to your augmentation therapy. 0 HCPCS: Healthcare Common Procedure Coding System is a cataloging of alphanumeric codes for identifying medical services, procedures, supplies and equipment used for pricing and billing of medical services. 0 J-code: This is a HCPCS code that is used to report injectable (infused) drugs that commonly are not self-administered. 0 CPT: Current Procedural Terminology is a list of terms and identifying codes that describes medical services and procedures for reporting purposes. 0 ICD-9: International Statistical Classification of Diseases - 9th Revision is coding used to describe diagnoses received from healthcare providers. Alpha-1 coding should include all of the pertinent IDC codes and J-codes for drug and administration. DRUG Alpha-1 Proteinase Inhibitor (Human) Alpha-1 Proteinase Inhibitor (Human liquid) J0256 (HCPCS Code) J0257 (HCPCS Code) SUPPLIES Home infusion therapy, alpha-1 proteinase inhibitor (augmentation therapy); administrative services, professional pharmacy services, care coordination, and all necessary supplies and equipment S9346 (HCPCS Code) Infusion supplies not used with external Infusion pump, per cassette or bag A4223 (HCPCS Code, Medicare code only) Supplies and materials (except spectacles), provided by the physician over and above those usually included with the office visit or other services rendered (CPT Code, Physician office only) NURSING Home infusion/specialty drug administration, per visit (up to 2 hours) Each additional hour (Use with 99601) Non-covered item or service (CPT Code) (CPT Code) A9270 (HCPCS Code, Medicare code only) 8

9 Medicare Medicare is health and hospitalization insurance for people older than 65 or for those who are disabled. Most portions of Medicare are not free and premiums are deducted from your Social Security benefit checks unless you make other payment arrangements. Medicare Part A - hospital insurance Part A Medicare is provided at no charge to anyone disabled or over the age of 65 who has paid Medicare taxes for at least 10 years. It covers the hospitalization costs, over and above your deductible, for the first 60 days of your hospital stay. Medicare Part B - doctor, outpatient and clinical services To obtain Medicare Part B coverage, you must pay a premium of $ (2014 rate) per month with exception of higher income beneficiaries. (If you have higher income, the law requires an adjustment to your monthly Medicare Part B and Medicare prescription drug coverage premiums. Higher-income beneficiaries pay higher premiums for Part B and prescription drug coverage. This affects less than 5 percent of people with Medicare, so most people do not pay a higher premium.) This coverage pays for 80% of approved doctor and outpatient services. You will be responsible for the remaining 20%. Be aware, however, that not all doctors accept Medicare. Medigap supplemental private insurance Medigap is supplemental private insurance that will pay for any costs not covered by Medicare Plan B. If you don t sign up for Medigap at age 65, you can enroll later, but you will be subject to underwriting, which may be a problem if you are in poor health or have chronic conditions. Signing up at age 65 is your best bet. That way, you are guaranteed to get the insurance at the lowest cost, and no one can take it away. If you re a person with Medicare under 65 and have a disability, you might not be able to buy the Medigap policy you want, or any Medigap policy, until you turn 65. Federal law doesn t require insurance companies to sell Medigap policies to people under 65. However, some states require Medigap insurance companies to sell you a Medigap policy, even if you are under 65. The following states do require Medigap insurance companies sell to people under 65: California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Kansas, Louisiana, Maine, Massachusetts, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont and Wisconsin. 9

10 Even if your state isn t on the list above, here are some things you need to know: Some insurance companies may voluntarily sell Medigap policies to some people under age 65. Some states require that people under age 65 who are buying a Medigap policy be given the best price available. Generally, Medigap policies sold to people under age 65 may cost more than policies sold to people over age 65. If you live in a state that has a Medigap open enrollment period for people under age 65, you will still get another Medigap open enrollment period when you reach age 65, and you will be able to buy any Medigap policy sold in your state. Medicare Part C Medicare Advantage Plan A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called Part C or MA Plans, are offered by private companies approved by Medicare. These plans are a part of a network and all providers are not available. If you join a Medicare Advantage Plan, the plan will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D), however, not all. Prior to enrollment, you can call the Medicare Advantage Plan you are considering to verify if they provide prescription drug coverage (Part D) in their plan. Medicare Part D Prescription Drug Coverage Medicare offers prescription drug coverage to everyone with Medicare. If you decide not to join a Medicare drug plan when you re first eligible, and you don t have other creditable prescription drug coverage, or you don t get Extra Help, you ll likely pay a late enrollment penalty. To get Medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. For more information on the levels of Medicare visit or call 1 (800) Those who are already receiving Social Security benefits will automatically be enrolled in Medicare Parts A and B. However, because there is a premium for Part B coverage, you have the option of turning it down. You will be contacted by mail a few months before you become eligible and given all the information you need. (Note: Residents of Puerto Rico or foreign countries will not receive Part B automatically. They must elect this benefit.) 10

11 Even if you keep working after you turn 65, you should sign up for Medicare Part A. If you have health coverage through your employer or union, Part A may still help pay some of the costs not covered by your group health plan. Call the Social Security Administration at to sign up. However, you may want to wait to sign up for Medicare Part B if you or your spouse are working and have group health coverage through you or your spouse s employer or union. You would have to pay the monthly Medicare Part B premium, and the Medicare Part B benefits may be of limited value to you as long as the group health plan is the primary payer of your medical bills. If you or your spouse (or family member if you re disabled) is still working and you have insurance through that employer (including the Federal Employee Health Benefits Program) or union, contact your employer or union benefits administrator to find out how your insurance works with Medicare. It may be to your advantage to delay Part B enrollment. You can sign up for Part B any time you have current employer insurance. (COBRA and retiree insurance don t count as current employer insurance.) Once your employment ends, three things happen: 1. You have 8 months to sign up for Part B without a penalty. This period will run whether or not you choose COBRA. If you choose COBRA, don t wait until your COBRA ends to enroll in Part B. If you don t enroll in Part B during the 8 months, you may have to pay a penalty; you won t be able to enroll until the next General Enrollment Period; and you ll have to wait before your coverage begins. 2. You may be able to get COBRA coverage, which continues your health insurance through the employer s plan (in most cases for only 18 months) and probably at a higher cost to you. 3. If you already have COBRA coverage when you enroll in Medicare, your COBRA will probably end. If you become eligible for COBRA coverage after you re already enrolled in Medicare, you must be allowed to take the COBRA coverage. It will always be secondary to Medicare (unless you have End Stage Renal Disease). TRICARE is insurance for active duty military or retirees and their families. When you have Medicare Part A, you must have Medicare Part B to keep your TRICARE coverage. In certain cases, you can delay your Medicare Part B enrollment without having to pay higher premiums. If you didn t take Medicare Part B when you were first eligible because you or your spouse were working and had group health plan coverage through your or your spouse s employer or union, you can sign up for Medicare Part B during a Special Enrollment Period (SEP). You can sign up: Anytime you are still covered by the employer or union group health plan through your spouse s current or active employment, or During the 8 months following the month the employer or union group health plan overage ends or when the employment ends (whichever is first). 11

12 Please be aware that if you decide to pick up Part B coverage at a later date, the cost of Part B may go up 10% for each 12-month period that you could have had Part B but did not sign up for it. Also, if you decline or cancel your Part B coverage, you will not be eligible to receive Medicare covered preventive services. For each 12-month period you delay enrollment in Medicare Part B, you will have to pay a 10 percent Part B premium penalty, unless you have insurance from your or your spouse s current job. In most cases you will have to pay that penalty every month for as long as you have Medicare. If you are enrolled in Medicare because of a disability and pay premium penalties, once you turn 65, you no longer have to pay the premium penalty. How do you calculate your premium penalty? Let s say you turned 65 in 2006, and you delayed signing up for Part B until 2012 (and you did not have employer insurance that allows you to delay enrollment). Your monthly premium would be 60 percent higher for as long as you have Medicare (6 years x 10 percent). Since the Medicare Part B premium in 2012 for most people is $99.90, your monthly premium with the penalty would be $ ($99.90 x $99.90). When you are covered by more than one insurance and any of the following situations apply to you, your other insurance may be primary to Medicare, meaning the other insurance pays first: You have Medicare; are still working; and are covered by your employer s health insurance plan; you have Medicare, are retired or disabled, but your spouse is working and has a health plan that also covers you; or you are injured on the job, in an automobile accident, or slip and fall at a shopping center (worker s compensation, auto insurance or liability insurance may cover the cost of medical care related to the accident). You can contact the Coordination of Benefits Contractor at for questions about, or to report changes in, your primary insurance. Medicare has a dedicated Coordination of Benefits Contractor that keeps track of when Medicare is primary or when another insurer is primary. If you have other insurance and it pays after Medicare, it is called your supplemental insurance. The Medicare publication, Medicare and Other Health Benefits: Your Guide to Who Pays First contains additional information on this topic that you may find useful. 12

13 What if I am Denied Coverage? Appeals and Grievances Dealing with insurance companies can be a complicated and frustrating endeavor and even more so when dealing with a chronic illness, such as Alpha-1. Medications needed to manage your health can be overly burdensome, but manageable. However, should your insurance plan deny coverage of a medically necessary prescription drug, you could be left in an anxious situation not knowing how you will get your next dosage. Fortunately, there are options available to you that will allow you to appeal your insurance company s decision. Your rights when you are denied coverage: The Affordable Care Act includes new rules that spell out how your plan must handle your appeal (usually called an internal appeal ). If your plan still denies payment after considering your appeal, the ACA permits you to have an independent review organization decide whether to uphold or overturn the plan s decision. This final check is often referred to as an external appeal. Under the new rules: When your plan denies a claim, it is required to notify you of the reason the claim was denied, your right to file an internal appeal, your right to request an external review if your internal appeal was unsuccessful, and the availability of a Consumer Assistance Program (CAP) that can help you file an appeal or request a review (if your state has such a program). If you don t speak English, you may be entitled to receive appeals information in your native language upon request. When you request an internal appeal, your plan must give you its decision within:»» 72 hours after receiving your request when you re appealing the denial of a claim for urgent care. (If your appeals concerns urgent care, you may be able to have the internal appeal and external review take place at the same time).»» 30 days for denials of non-urgent care you have not yet received.»» 60 days for denials of services you have already received. If after internal appeal the plan still denies your request for payment or services, you can ask for an independent external review. Your plan must include information on your denial notice about how to request this review. A CAP program can help with this request. If the external reviewer overturns your insurer s denial, your insurer must give you the payments or services requested in your claim. 13

14 These new rules apply only to new plans (purchased or created after 3/23/2010). Grandfathered plans do not have to comply with the new rules, but over time, all plans will lose that status and have to comply. How much these new rules will change your current appeal rights depends on the state you live in and the type of plan you have. Some group plans may require more than one level of internal appeal before you re allowed to submit a request for an external review. However, all levels of the internal appeals process must be completed within the timeframes above. How to file an internal appeal: When you request an internal appeal, your insurance company may ask your provider for more information in order to make a decision about the claim. They should inform you of the deadline to send additional information and if a deadline is not given, call your insurer at the number on the back of your ID card. Remember, you should receive the denial in writing. Be proactive and call your insurance company if you have not. Steps in the Appeal Process Step 1 Step 2 Contact your prescribing physician and ask them to contact your insurer s medical management area or its Medical Director directly in order to request a peer-to-peer review to discuss the specific reason why this type of medication is needed for you. If your physician has already had the peer-to-peer review with the medical management area, and the request for medication continues to be denied, you have the right to appeal this decision in writing to the appropriate department. You can find the address to submit appeals in the denial letter, your coverage documents or by contacting your insurer using the member services telephone number on your ID card. Write a clear and simple letter providing: a) Pertinent clinical information regarding your health history and medication history; i) Your medical records documenting past drug trials and health history. Your prescribing physician should have these. b) History of any adverse reactions or side effects you have had to similar medications (over-thecounter or prescribed), or generic equivalents that were not effective; c) If your insurer requires the prescribing physician to complete a drug authorization form, you should make sure this has been done; and 14

15 d) If you received a letter of denial for the medication, ensure that the information provided directly addresses the reasons for the denial. e) If the dispute is over the necessity, your physician s support in the form of a letter including studies supporting the benefit of the treatment in question could be invaluable. Request that your physician write a letter of medical necessity. A service is medically necessary if meets any one of the three standards below: i) The service or benefit will, or is reasonably expected to, prevent the onset of an illness, condition, or disability. ii) The service or benefit will, or is reasonably expected to, reduce or ameliorate the physical, mental, or developmental effects of an illness, condition or disability. iii) The service or benefit will assist the individual to achieve or maintain maximum functional capacity in performing daily activities taking into account both the functional capacity of the individual and those functional capacities that are appropriate for individuals of the same age. f) The letter should assert that the prescribed drug is medically necessary and: i) Any drug on the formulary would not be as effective and/or would be harmful to you. ii) All other drug or dosage alternatives on the plan s formulary have been ineffective of caused harm, or based on sound clinical evidence and knowledge of the patient, are likely to be ineffective or cause harm. g) Contact your insurer after submitting your request to make sure they have received it. Step 3 Follow up. If your appeal is denied, go to the next level of appeal. Do not assume this happens automatically make sure you communicate your desire for a second-level, or Independent External Review. This will be a reconsideration of your original claim by professionals with no connection to your insurance plan. If the independent reviewers think your plan should cover your claim, your health plan must cover it. 15

16 Consumer Resources Caring Voice Coalition empowers patients who live with a life threatening chronic disease through comprehensive outreach programs and services aimed at financial, emotional and educational support. With a steadfast dedication to the organization s set of core values, their knowledgeable, caring staff maintains a solid reputation as a dependable, responsive organization with a unique approach to improving the lives of our patients. 1 (888) or Center for Consumer Information and Insurance Oversight (CCIIO): Located within the Centers for Medicare & Medicaid Services (part of the Department of Health & Human Services), the Center is the federal agency tasked with implementing many provisions of the Affordable Care Act related to private health insurance. Department of Health and Human Services (HHS): The federal agency charged with protecting the health of all Americans. Its agencies include the Centers for Medicare and Medicaid Services (CMS), Centers for Disease Control and Prevention (CDC) and the Health Resources and Services Administration (HRSA). Families USA; The Voice for Healthcare Consumers is a nonprofit, non-partisan organization dedicated to the achievement of high-quality, affordable health and long-term care for all Americans since Families USA has worked to promote high-quality, affordable health care for all Americans. Their program locator can assist in locating other types of consumer assistance. Website only: Healthcare.gov is a federal government website managed by the U.S. Department of Health & Human Services with the initiative to educate Americans about the Affordable Care Act that was signed into law two years ago on March 23, The website has a tool to find individual state s Consumer Assistance Programs, where they have been established and other help sources with health insurance problems. Website only: The Kaiser Family Foundation is a non-profit, private operating foundation focusing on the major health care issues facing the United States. Kaiser serves as a non-partisan source of facts, information, analysis and journalism for policymakers, the media, the health care community, and the public. Their product is information, always provided free of charge. The National Health Council (NHC) is the only organization of its kind that brings together all segments of the health community to provide a united voice for the more than 133 million people with chronic diseases and disabilities and their family caregivers. Their mission is to provide a united voice for people with chronic diseases and disabilities. 1 (202) or 16

17 The National Organization for Rare Disorders (NORD), is dedicated to helping people with rare orphan diseases and assisting the organizations that serve them. Visit the NORD s Patient Assistance Programs tab located at Navigators: Whether your state has a State-based Marketplace, State Partnership Marketplace or a Federally-facilitated Marketplace you can find local assistance with preparing electronic and paper applications and to see if you qualify for an insurance affordability program. The Federallyfacilitated Marketplace will designate organizations to certify application counselors who perform many of the same functions as Navigators and non-navigator assistance personnel including educating consumers and helping them complete an application for coverage. To find local help visit: The Patient Advocate Foundation provides effective mediation and arbitration services to patients to remove obstacles to healthcare including medical debt crisis, insurance access issues and employment issues for patients with chronic, debilitating and life-threatening illnesses. This service pairs the patient with a case manager who will assist the patient with their needs. 1 (800) or Patient Services Incorporated evaluates an individual s financial, medical, and insurance situation to determine who is eligible for premium or co-payment assistance including COBRA. They provide help for Alpha-1 patients as well as many other illnesses and offer many types of financial assistance. 1 (800) or The State Health Insurance Assistance Program (SHIP) is a national program that offers one-onone counseling and assistance to people with Medicare and their families. Through federal grants directed to states, SHIPs provide free counseling and assistance via telephone and face-to-face interactive sessions. For more information about the SHIP program in your state or to find contact information for a SHIP counselor in your area go to: Your therapy provider or the manufacturer most likely has a division or third party group that is designed to assist you with insurance issues and appeals. Each state has a bureau that could be contacted for assistance. They would have names such as: Insurance Commission office; Department of Insurance; Health Insurance Division Consumer Service; Department of Insurance Consumer Services; Office of Insurance Regulation, etc. 17

18 Glossary of Healthcare Terms Healthcare and Insurance Related Acronyms ACA: Affordable Care Act ACO: Accountable Care Organization AV: Actuarial Value CAC: Certified Application Counselor CCIIO: Center for Consumer Information and Insurance Oversight CHIP: Children s Health Insurance Program CMS: Centers for Medicare & Medicaid Services COB: Coordination of Benefits COBRA: Consolidated Omnibus Budget Reconciliation Act DME: Durable Medical Equipment EHB: Essential Health Benefits EOB: Explanation of Benefits EPO: Exclusive Provider Organization FMLA: Family Medical Leave Act FPL: Federal Poverty Level FSA: Flexible Spending Account HHS: U.S. Department of Health and Human Services HIPAA: Health Insurance Portability and Accountability Act HMO: Health Maintenance Organization HSA: Health Savings Account LTC: Long Term Care MA: Medicare Advantage MLR: Medical Loss Ratio OEP: Open Enrollment Period OON: Out of Network OOP: Out of Pocket PCP: Primary Care Provider PDP: Prescription Drug Plan under Medicare Part D POS: Point-of-Service Plan PPO: Preferred Provider Organization QHP: Qualified Health Plan SBC: Summary of Benefits and Coverage SEP: Special Enrollment Period SNF: Skilled Nursing Facility SSDI: Social Security Disability Income SSI: Supplemental Security Income TPA: Third Party Administrator UCR: Usual, Customary and Reasonable Charges 18

19 Healthcare Plans and Systems Catastrophic Plan: A healthcare plan that only covers certain types of expensive care, like hospitalizations. It may also include plans that have a high deductible, so that your plan begins to pay only after you ve first paid up to a certain amount for covered services. Children s Health Insurance Program (CHIP): Insurance program jointly funded by state and federal government that provides health insurance to low-income children and, in some states, pregnant women in families who earn too much income to qualify for Medicaid but cannot afford to purchase private health insurance coverage. EPO (Exclusive Provider Organization) Plan: A managed care plan in which services are covered only if you go to doctors, specialists, or hospitals in the plan s network (except in an emergency). Flexible Spending Account (FSA): Accounts offered and administered by employers that allow employees to set aside, out of their paycheck, pretax dollars to pay for the employee s share of insurance premiums or medical expenses not covered by the employer s health plan. The employer may also make contributions to a FSA. Typically, benefits or cash must be used within the given benefit year or the employee loses the money. Flexible spending accounts can also be provided to cover childcare expenses, but those accounts must be established separately from medical FSAs. HMO (Health Maintenance Organization): An insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. Generally won t cover out-of-network care except in an emergency, and may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness. Health Reimbursement Arrangement (HRA): A medical savings account to which employers contribute funds that can cover an employee s costs not covered by the plan. The employer can choose whether or not to allow unused funds to rollover to the following year. Health Savings Account (HSA): A medical savings account available to taxpayers who are enrolled in a High Deductible Health Plan that meets federal rules. In 2012, to qualify for use with an HSA, an HDHP plan must have a minimum deductible of $1,200 for an individual plan and $2,400 for a family plan, and an out-of-pocket maximum of $6,050 for an individual plan and $12,000 for a family plan (these numbers are adjusted annually). The funds contributed to the account aren t subject to federal income tax at the time of deposit. Funds must be used to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), funds roll over year to year if you don t spend them. High Deductible Health Plan (HDHP): A plan that features higher deductibles than traditional insurance plans. HDHPs can be combined with a health savings account (under certain circumstances) or a health reimbursement arrangement to allow you to pay for qualified out-ofpocket medical expenses on a pre-tax basis. See above. 19

20 Managed care plan: A plan that generally provides comprehensive health services to its members, and offers financial incentives for patients to use the providers who belong to the plan. Examples include: health maintenance organizations (HMOs), preferred provider organizations (PPOs), exclusive provider organizations (EPOs), and point of service plans (POSs). Medicaid: A state-administered health insurance program for low-income families and children, pregnant women, the elderly, people with disabilities, and in some states, other adults. The federal government provides a portion of the funding and sets guidelines. States also have choices in how they design their program, so Medicaid programs and eligibility vary state by state and may have a different name in your state. Medicare: A federal health insurance program for people who are age 65 or older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease. Medicare Part A: Hospital insurance that helps cover inpatient care in hospitals, skilled nursing facility, hospice, and home care. Medicare Part B: Medical coverage that helps to cover medically-necessary services like doctors services, outpatient care, home health services, other medical services and preventive services. Medicare Advantage (Medicare Part C): A type of Medicare health plan offered by a private company that contract with Medicare to provide Medicare Part A and Part B benefits. Medicare Part D: A program that helps pay for prescription drugs for people with Medicare who join a plan that includes Medicare prescription drug coverage. POS (Point-of-Service Plan) Plan: A type of plan in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan s network. POS plans may also require you to get a referral from your primary care doctor in order to see a specialist. PPO (Preferred Provider Organization): A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan s network. You can use doctors, hospitals, and providers outside of the network for an additional cost. PCP (Primary Care Physician): A physician who usually is the first health professional to examine a patient and who recommends secondary care physicians, medical or surgical specialists with expertise in the patient s specific health problem, if further treatment is needed. Formerly known as the family doctor. 20

21 Health Insurance and Reform Accountable Care Organization (ACO): A group of health care providers who give coordinated care, chronic disease management, and thereby improve the quality of patient care. The organization s payment is tied to achieving health care quality goals and outcomes that result in cost savings. ACOs can include various types of doctors primary care, specialists, etc. as well as other medical providers (nurses, physician s assistants, etc.) and institutions (hospitals, multi-physician practices). Affordable Care Act (ACA): The comprehensive health care reform law enacted in March The law was enacted in two parts: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010 and was amended by the Health Care and Education Reconciliation Act on March 30, Affordable Care Act refers to the final, amended version of the law. Allowed Charge: Discounted fees that insurers will recognize and pay for covered services. Insurers negotiate these discounts with providers in their health plan network, and network providers agree to accept the allowed charge as payment in full. Each insurer has its own schedule of allowed charges. Annual Limit: A cap on the benefits your insurance company will pay in a year while you re enrolled in a health insurance plan. Annual caps are sometimes placed on particular services such as prescriptions or hospitalizations. Annual limits may be placed on the dollar amount of covered services or on the number of visits for a particular service. After the annual limit is reached, you must pay all associated health care costs for the rest of the year. No annual dollar limits are allowed on essential services in If you have a grandfathered individual health insurance policy, your health plan is not required to follow the new rules on annual limits. Balance Billing: The practice of billing a patient for charges not paid by his/her insurance plan because the charges are in excess of covered amounts. Balance billing amounts will often be charges that are above the usual and customary rates. Benefits: The health care items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan s coverage documents. In Medicaid or CHIP, covered benefits and excluded services are defined in state program rules. Biosimilars also known as follow-on biologics are biologic medical products whose active drug substance is made by a living organism or derived from a living organism by means of recombinant DNA or controlled gene expression methods. Care Coordination: The process of organizing your treatment across several health care providers. Medical homes and accountable care organizations (see definition) are two common ways to coordinate care. 21

22 CCIIO: Center for Consumer Information and Insurance Oversight is charged with helping implement many reforms of the Affordable Care Act, the historic health reform bill that was signed into law March 23, CCIIO oversees the implementation of the provisions related to private health insurance. In particular, CCIIO is working with states to establish new Health Insurance Marketplaces. Chronic Disease Management: An integrated care approach to managing illness typically using multiple health care providers including various physicians, nurses, and others which includes screenings, check-ups, monitoring and coordinating treatment, and patient education. It can improve quality of life while reducing health care costs if you have a chronic disease, by preventing or minimizing the effects of a disease. Claim: A request for payment that you or your health care provider submits to your health insurer when you get items or services you think are covered. COBRA: (Consolidated Omnibus Budget Reconciliation Act) A federal law that may allow you to temporarily keep health coverage if your employment ends, you lose coverage as a dependent of the covered employee, or if there is another qualifying event. COBRA requires you pay 100% of the premiums, including the share the employer used to pay, plus a small administrative fee. Co-insurance: A form of medical cost sharing in a health insurance plan that requires an insured person to pay a stated percentage of medical expenses after the deductible amount, if any, was paid. Once any deductible amount and coinsurance are paid, the insurer is responsible for the rest of the reimbursement for covered benefits up to allowed charges: the individual could also be responsible for any charges in excess of what the insurer determines to be usual, customary and reasonable. Co-payment: A flat dollar amount you must pay for a covered program. Example: you may have to pay a $15 co-payment for each covered visit to a primary care doctor. Cost Sharing: The share of costs covered by your insurance that you pay out-of-pocket. Generally includes deductibles, coinsurance and co-payments, or similar charges, but it doesn t include premiums, balance billing amounts for non-network providers, or the cost of noncovered services. Cost sharing in Medicaid and CHIP also includes premiums. Deductible: The amount you must pay for covered care before your health insurance begins to pay. Insurers apply and structure deductibles differently. Example: under one plan, a comprehensive deductible might apply to all services while another plan might have separate deductibles for benefits such as prescription drug coverage. Some plans may also cover some services before the deductible is met, such as annual exams. Dependent Coverage: Insurance coverage for family members of the policyholder, such as spouses, children, or partners. Under the Affordable Care Act, plans must cover children up to age 26 on their parent s policy. 22

23 Disability: A limit in a range of major life activities. This includes activities like seeing, hearing, walking and tasks like thinking and working. Different state, federal or private programs may have different disability standards. A legal definition of disability can be found at: pubs/ada.htm. Donut Hole, Medicare Prescription Drug: Most plans with Medicare prescription drug coverage (Part D) have a coverage gap, called a donut hole. This means that after you and your drug plan have spent a certain amount of money for covered drugs; you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again. Under the Affordable Care Act, the donut hole will close in Emergency Room Services: Evaluation and treatment of an illness, injury, or condition that needs immediate medical attention in an emergency room. Essential Health Benefits: A set of health care service categories that must be covered by certain plans, starting in The Affordable Care Act defines essential health benefits to include at least the following general categories and the items and services covered within the categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. All new plans sold to individuals and small businesses, including those offered in Exchanges, and all Medicaid state plans must cover these services by Starting with plan years or policy years that began on or after September 23, 2010, health plans can no longer impose a lifetime dollar limit on spending for these services. Exchange: New state-based organizations known as Health Insurance Marketplace has been set up to create a more organized and competitive market place for individuals and small businesses to buy health insurance. Exchanges offer a choice of different health plans, which meet certain benefits and cost standards and provide information to help consumers better understand their options. Financial assistance is available for Marketplace plans for those who qualify based on income. Exclusions: Items or services that aren t covered under a contract for insurance and which an insurance company won t pay. Example: your policy may not cover pregnancy care or any services related to a pre-existing condition. Explanation of Benefits (EOB): A form or document sent by the insurance company to both enrollees and providers. The document provides necessary information about claim payments and patient responsibility amounts of healthcare services however it is not a bill. It should include data on what was paid or is in process of being reviewed for payment by the insurance company. Your EOBs may help you track your healthcare expenditures and serve as a reminder of the medical services you received during the past several years. 23

24 Family and Medical Leave Act (FMLA): A federal law that guarantees up to 12 weeks of job protected leave for certain employees when they need to take time off due to serious illness or disability, to have or adopt a child, or to care for another family member. When on leave under FMLA, you can continue coverage under your job-based plan. Learn more about FMLA at Federal Poverty Level (FPL): A measure of income level issued annually by the Department of Health and Human Services. FPL is used to determine eligibility for certain programs and benefits. For more information on FPL please visit Fee for Service: A reimbursement plan in which doctors and other health care providers are paid for each service performed, such as for tests and office visits. Flexible Benefits Plan: Offers employees a choice between various benefits including cash, life insurance, health insurance, vacations, retirement plans, and child care. Although a common core of benefits may be required, you can choose how your remaining benefit dollars are to be allocated for each type of benefit from the total amount promised by the employer. Sometimes you can contribute more for additional coverage. Also known as a Cafeteria plan or IRS 125 Plan. Formulary: A list of drugs your insurance plan covers. May include how much you pay for each drug. If the plan categorizes drugs into different groups requiring different co-pays also known as tiers then the formulary may list drugs by these tiers. Formularies may include both generic drugs and brand-name drugs. Fully Insured Job-based Plan: A plan in which the employer contracts with an insurer to assume financial responsibility for the enrollees medical claims and for all incurred administrative costs. Grandfathered Health Plan: As defined in the Affordable Care Act, a group health plan that was created or an individual health insurance policy that was purchased on or before March 23, Grandfathered plans are exempt from many changes required under the Affordable Care Act. A grandfathered individual health insurance policy is a plan that you bought for yourself or your family; that you did not receive through your employer; and that was issued on or before March 23, If you re not sure whether your plan is grandfathered, ask your insurance company. Plans or policies may lose their grandfathered status if they make certain significant changes that reduce benefits or increase costs to consumers. A health plan must disclose in its plan materials whether it considers itself to be a grandfathered plan and must also advise consumers how to contact the U.S. Department of Labor or the U.S. Department of Health and Human Services with questions. Also see New Plan below. Guaranteed Issue: A requirement that health plans must permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services. Except in some states, guaranteed issue doesn t limit how much you can be charged if you enroll. Guaranteed Renewal: A requirement that your health insurance issuer must offer to renew your policy as long as you continue to pay premiums. Except in some states, guaranteed renewal doesn t limit how much you can be charged if you renew your coverage. 24

25 Healthcare Workforce Development: The use of incentives and recruiting to encourage people to enter into health care professions such as primary care and to encourage providers to practice in underserved areas. Health Insurance Portability and Accountability Act (HIPAA): A 1996 federal act that eliminated discrimination by health insurers for those with preexisting medical conditions. Example: when leaving a group policy, patients cannot be denied coverage in other group policies based on a preexisting medical condition. In order to qualify for HIPPA, you must meet the following two conditions: (1) you have had 18 months of consecutive, continuous prior health coverage, and (2) you must get new coverage with another group medical plan within 63 days. Many insurance plans offer open-enrollment periods when anyone can join, regardless of preexisting conditions. Health Status: Refers to your medical conditions (both physical and mental health), claims experience, receipt of health care, medical history, genetic information, evidence of insurability, and disability. Home Health Care: Health care services and supplies in your home that a doctor approves under a plan of care established by your doctor. Individual Health Insurance Policy: Policies for people who aren t connected to job-based coverage. Individual health insurance policies are regulated under state law. Note that the phrase individual policies when used in this way policies that are unconnected to employment can be used for policies that cover a single person or multiple people (families, mother and dependent child, husband and wife, etc.). Individual Responsibility: As of January 2014, under the Affordable Care Act, you must be enrolled in a health insurance plan that meets basic minimum standards. If you aren t, you may be required to pay a penalty. Exempt from this are people with very low income for whom coverage is unaffordable based in their household income, or for other reasons, including religious beliefs. In Network Provider: A physician, certified nurse midwife, hospital, skilled nursing facility, home health care agency, or any other duly licensed or certified institution or health professional under contract with your insurance provider. Insurance Co-Op: A non-profit entity in which the same people who own the company are insured by the company. Cooperatives can be formed at a national, state or local level, and can include doctors, hospitals and businesses as member-owners. Job-based Health Plan: Coverage that is offered to an employee (and often his or her family) by an employer. 25

26 Lifetime Limit: A lifetime cap can only apply to non-essential services for the total lifetime benefits you may get from your insurance policy. An insurance company may impose a total lifetime dollar limit on benefits (like $1 million) or limit specific benefits (like a $200,000 lifetime cap on organ transplants or one gastric bypass per lifetime) or a combination of the two. After a lifetime limit is reached, the insurance plan will no longer pay for covered services. Be aware that plans can put an annual dollar limit and a lifetime dollar limit on spending for health care services that are not considered essential. Long-Term Care: Medical and non-medical services provided to people who are unable to perform basic activities of daily living such as dressing or bathing. Long-term supports and services can be provided at home, in the community, in assisted living or in nursing homes. Individuals may need long-term supports and services at any age. Medicare and most health insurance plans don t pay for long-term care. Managed care provisions: Features within health plans that provide insurers with a way to manage the cost, use and quality of health care services received by group members. Examples of managed care provisions include: Preadmission certification - Authorization for hospital admission given by a health care provider to a group member prior to hospitalization. Failure to obtain a preadmision certification in non-emergency situations reduces or eliminates the health care provider s obligation to pay for services rendered. Utilization review - The process of reviewing the appropriateness and quality of care provided to patients. Utilization review may take place before, during, or after the services are rendered. Preadmission testing - Requirement designed to encourage patients to obtain necessary diagnostic services on an outpatient basis prior to non-emergency hospital admission. The testing is designed to reduce the length of a hospital stay. Non-emergency weekend admission restriction - A requirement that imposes limits on reimbursement to patients for non-emergency weekend hospital admissions. Second surgical opinion - A cost-management strategy that encourages or requires patients to obtain the opinion of another doctor after a physician has recommended that a nonemergency or elective surgery be performed. Programs may be voluntary or mandatory in that reimbursement is reduced or denied if the participant does not obtain the second opinion. Plans usually require that such opinions be obtained from board-certified specialists with no personal or financial interest in the outcome. Medical Loss Ratio (MLR): A financial measurement used in the Affordable Care Act to encourage health plans to provide value to enrollees. Example: If an insurer uses 80 cents of every premium dollar to pay its customers medical claims and activities that improve the quality of care, the company has a medical loss ratio of 80%. This indicates that the insurer is using the remaining 20 cents of each premium dollar to pay overhead expenses, including salaries, administrative costs, and agent commissions. The Affordable Care Act sets minimum medical loss ratios for different markets, as do some state laws. Insurers that don t meet the minimum MLR must issue rebates to policy holders beginning in

27 Medically Necessary: Services or supplies that are needed for the diagnosis or treatment of your health condition and meet accepted standards of medical practice. Definitions of medical necessity vary by plan. Medical Underwriting: A process used by insurance companies that uses your health status when you re applying for health insurance coverage to determine whether to offer you coverage, at what price, and with what exclusions or limits. Minimum Essential Coverage: The t ype of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage. New Plan: As referenced in the Affordable Care Act, a health plan that is not grandfathered and therefore subject to all of the reforms in the Affordable Care Act. In the individual health insurance market, a plan that your family is purchasing for the first time. In the group health insurance market, a plan that your employer is offering for the first time. New employees and new family members may be added to existing grandfathered group plans so a plan that is new to you and your family may still be a grandfathered plan. In both the individual and group markets, a plan that loses its grandfathered status will be considered a new plan. This happens when it makes significant changes to the plan, such as reducing benefits or increasing costsharing for enrollees. Also see Grandfathered Plan above. Nondiscrimination: A requirement that job-based insurance not discriminate based on health status by denying or restricting health coverage, or charging more. Job-based plans can restrict coverage based on other factors such as part-time employment that aren t related to health status. Open Enrollment Period (OEP): The period of time set up to allow you to choose from available plans, usually once a year. Out-of-Network (OON) Providers: A duly licensed or certified institution or health professional not under contract with your insurance provider. Out-of-Pocket Costs: Your expenses for medical care that aren t reimbursed by insurance. Outof-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren t covered. 27

28 Out-of-Pocket Limit (OOP): The most you pay during a policy period (usually one year) before your health insurance or plan starts to pay 100% for covered essential health benefits. This limit must include deductibles, coinsurance, copayments, or similar charges and any other expenditure required of an individual which is a qualified medical expense for the essential health benefits. This limit does not have to count premiums, balance billing amounts for nonnetwork providers and other out-of-network cost-sharing, or spending for non-essential health benefits. The maximum out-of-pocket cost limit for any individual Marketplace plan for 2014 can be no more than $6,350 for an individual plan and $12,700 for a family plan. Plan Year: A 12-month period of benefits coverage under a group health plan. This 12-month period might be different than the calendar year. Policy Year: A 12-month period of benefits coverage under an individual health insurance plan. This 12-month period might be different than the calendar year. Pre-Authorization: A pre-authorization requirement means that the insurance company will not pay for a service unless the provider gets permission to provide the service. This permission is to ensure that a patient has benefit dollars remaining and that a particular kind of service is eligible for payment under the patient s contract. Authorization could be granted retroactively after receiving emergency care; generally a patient or hospital may have a 24-hour window to notify a payer. Pre-Certification: A pre-certification requirement means that a payer must review the medical necessity of a proposed service and provide a certification number before a claim will be paid. This is often true with augmentation therapy as well as other elective procedures. A physician or nurse with the payer must review a physician s order and the medical record to agree that a proposed procedure is medically appropriate. (Many insurers have adopted strict guidelines in regards to coverage for augmentation therapy) Pre-Existing Condition*: Any condition (either physical or mental) including a disability for which medical advice, diagnosis, care, or treatment was recommended or received prior to obtaining a health insurance plan. *Section 1201 of the Affordable Care Act provides that a group health plan and a health insurance issuer offering group or individual health insurance may not impose any pre-existing exclusion. This prohibition generally is effective with respect to plan years beginning on or after January 1, 2014; a grandfathered health plan that is individual health insurance coverage is not required to comply. Pre-Existing Condition Exclusion is a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment of insurance coverage such as a Grandfathered Plan. Grandfathered individual health insurance plans are the kind you buy yourself, not through an employer. They do not have to cover pre-existing conditions. If you have one of these plans you can switch to a Marketplace plan during open enrollment and immediately get coverage for your pre-existing conditions. 28

29 Premium: A monthly payment you make to your insurer to get and keep insurance coverage. Premiums can be paid by employers, unions, employees or individuals or shared among different payers. Preventive Services: Routine health care that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. Primary Care: Health services that cover a range of prevention, wellness, and treatment for common illnesses. Primary care providers include doctors, nurses, nurse practitioners, and physician assistants. They often maintain long-term relationships with you and advise and treat you on a range of health-related issues. They may also coordinate your care with specialists. The Qualified Health Plan (QHP) Issuer Certification Checklist: A document developed by Georgetown University s Health Policy Institute that insurance regulators (and/or Exchanges) can use or modify for use in reviewing applications filed by issuers for approval as QHP issuers. Some QHP issuer certification elements in the checklist require a decision by the state to accept confirmation by a carrier or to verify compliance directly through evidence that the requirements have been met. Qualifying Event: Any event or occurrence such as death, termination of employment, divorce, or a terminal illness that changes an employee s eligibility status and permits an acceleration or continuation of benefits or coverage under a group health plan. The term is most frequently used in reference to COBRA eligibility Rate Review: A process that allows state insurance departments to review rate increases before insurance companies can apply them to you. Under the Affordable Care Act, insurers that submit rate increases of 10% or more are considered unreasonable and are subject to additional review. Reinsurance: A reimbursement system that protects insurers from very high claims. It usually involves a third party paying part of an insurance company s claims once they pass a certain amount. Reinsurance is a way to stabilize an insurance market and make coverage more available and affordable. Rescission: The retroactive cancellation of a health insurance policy. Insurance companies will sometimes retroactively cancel your entire policy if you made a mistake on your initial application when you buy an individual market insurance policy. Under the Affordable Care Act, rescission is illegal except in cases of fraud or intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. 29

30 Rider (exclusionary rider): An amendment to an insurance policy. Some riders add coverage while other riders exclude coverage (known as exclusionary rider). An exclusionary rider is an amendment permitted in individual policies that permanently excludes coverage for a health condition, body part, or body system (such as a certain disease state or disability). Beginning in September 2010, exclusionary riders cannot be applied to coverage for children. As of 2014, no exclusionary riders will be permitted in any health insurance. Risk Adjustment: A statistical process that takes into account the underlying health status and health spending of the enrollees in an insurance plan when looking at their health care outcomes or health care costs. Self-Insured Plan: Type of plan usually present in larger companies where the employer itself collects premiums from enrollees and takes on the responsibility of paying employees and dependents medical claims. These employers can contract for insurance services such as enrollment, claims processing, and provider networks with a third party administrator, or they can be self-administered. Skilled Nursing Facility (SNF) Care: Skilled nursing care and rehabilitation services provided on a continuous, daily basis, in a skilled nursing facility. Example: Physical therapy or intravenous injections that can only be given by a registered nurse or doctor. Special Enrollment Period: A time outside of the open enrollment period during which you and your family have a right to sign up for job-based health coverage. Job-based plans must provide a special enrollment period of 30 days following certain life events that involve a change in family status (such as marriage or birth of a child) or loss of other job-based health coverage. Special Health Care Need: The health care and related needs of children who have chronic physical, developmental, behavioral or emotional conditions. Such needs are of a type or amount beyond that required by children generally. State Continuation Coverage ( Mini-COBRA ): A state-based requirement similar to COBRA that applies to group health insurance policies of employers with fewer than 20 employees. In some states, state continuation coverage rules also apply to larger group insurance policies and add to COBRA protections. Example: in some states, older workers (generally 55 or older) leaving a job-based plan, may be allowed to continue COBRA coverage until they reach the age of Medicare eligibility. Third party administrator (TPA): An individual or firm hired by an employer to handle claims processing, pay providers, and manage other functions related to the operation of health insurance. The TPA is not the policyholder or the insurer. The TPA may often be a company you associate with health insurance, such as Aetna or Blue Cross, but in this role they are not the actual insurer but are simply managing the plan on behalf of the employer. Uncompensated Care: Health care or services provided by hospitals or health care providers that don t get reimbursed. Often uncompensated care arises when people don t have insurance and cannot afford to pay the cost of care. 30

31 Usual, customary, and reasonable (UCR) charges: A healthcare provider s usual fee for a service that does not exceed the customary fee in that geographic area, and is reasonable based on the circumstances. Instead of UCR charges, PPO plans often operate based on a negotiated (fixed) schedule of fees that recognize charges for covered services up to a negotiated fixed dollar amount. Conventional indemnity plans typically operate based on UCR charges. Waiting Period (Job-based coverage): The time that must pass before coverage can become effective for an employee or dependent, who is otherwise eligible for coverage under a job-based health plan. Applies to all new employees, and is not based on health status. This is different than a pre-existing condition exclusion period, which is applied to individual employees and is based on health status. Under the Affordable Care Act the waiting period can be no greater than 90 days. Well-baby/Well-child Visits: Routine doctor visits for comprehensive preventive health services that occur when a baby is young and annual visits until a child reaches age 21. Services include physical exam and measurements, vision and hearing screening, and oral health risk aessments. Wellness Programs: A program intended to improve and promote health and fitness that s usually offered through the work place, although insurance plans can offer them directly to their enrollees. The program allows your employer or plan to offer you premium discounts, cash rewards, gym memberships, and other incentives to participate. Programs that tie financial incentives to achieving certain outcomes (ie, set goals such as BMI, glucose levels or blood pressure) must meet certain federal rules. Examples of some wellness programs: programs to help you stop smoking, diabetes management programs, weight loss programs, and preventative health screenings. Source: The BLS National Compensation Survey 31

32 An Overview: The Health Insurance Marketplace/Exchange In 2014, consumers and small businesses will have access to new health insurance marketplaces (or Exchanges). Consumers in every state (including the District of Columbia) will be able to buy insurance from qualified health plans available through a marketplace and about 18 million Americans may be eligible for tax credits to help pay for their health insurance. States across the country have received grants to establish a new marketplace. States can create and operate their own marketplace (State-based Exchange) or a hybrid called a State Partnership Exchange in which the state runs certain functions. A Partnership Exchange allows states to make key decisions and tailor the marketplace to local needs and market conditions. The Federal government will establish and operate a marketplace in those states that do not establish their own. All marketplaces launched open enrollment in October Under the Affordable Care Act (ACA) health plans will be required to provide four levels of coverage, sometimes referred to as metal tiers: bronze, silver, gold and platinum. Plans are not required to provide all four levels. to view the levels of coverage, view: american-health-benefit-exchanges.aspx. The ACA generally requires QHPs to provide coverage at one of the following levels: bronze, silver, gold, or platinum. Actuarial value (AV) is a measure of the percentage of expected health care costs a health plan will cover. Plans inside and outside the exchange in the individual and small group markets who offer non-grandfathered health plans must offer plans that meet distinct levels of coverage specified in the ACA matching up to one of these metal tiers (and premiums must be the same for QHPs inside and outside of the Marketplace). Excluding dental-only plans, health insurance issuers must offer a silver plan and a gold plan in the Marketplace. Each coverage level will be based on a specified share of the full actuarial value of the essential health benefits. A health insurance issuer that offers coverage in any of these four levels will be required to offer the same level of coverage in a plan specifically designed for individuals under age 21. All plans offered within the individual and small group markets, both inside and outside of the the Health Insurance Marketplace must offer the same comprehensive package of items and services, known as essential health benefits (See Glossary: Essential Health Benefits). While the scope of benefits will be the same among the plans, the share of the costs the plan will pay for those benefits will vary across the four levels of coverage. Bronze plans will be the least generous, with higher out-of-pocket costs for covered benefits, and platinum plans will be the most generous, with less cost-sharing. However, no plan will be allowed to impose total out-of-pocket costs deductibles, copayments or other forms of cost sharing greater than those imposed by high deductible plans (for 2014, the limit will be $6,350 for an individual and $12,700 for a family). However, it is important to note that the out-of-pocket limit applies to care obtained in-network for essential health benefits. Spending for out-of-network care and services that are outside the essential health benefits will not count toward the out-of-pocket limit. It is important to review the SBC to determine if there are also plan specific exclusions to the out-of-pocket limit, such as balance-billing. 32

33 How will the levels of coverage differ? The four levels of coverage are based on actuarial value. Actuarial value is a measure of the level of financial protection a health insurance policy offers and indicates the percentage of health costs that, for an average population, would be covered by the health plan. Under the Affordable Care Act (ACA), the actuarial values for each level are: Bronze Bronze plans have an actuarial value of 60%, which means that at an overall plan level, the member (you) will pay for 40% of medical costs through a combination of deductibles, co-pays and coinsurance. Silver A silver plan has an actuarial value of 70%, so members will be responsible at an overall plan level for 30% of medical costs through a combination of deductibles, co-pays and coinsurance. Gold A gold plan has an actuarial value of 80%; therefore, under this plan, people will be responsible for 20% of medical costs through a combination of deductibles, co-pays and coinsurance. Platinum Under a platinum plan with an actuarial value of 90%, people will be responsible for only 10% of medical costs through a combination of deductibles, co-pays and coinsurance. In other words, for a bronze plan, the health plan would cover 60% of all health care costs for an average population, and enrollees, on average, would be responsible for paying 40%. For a platinum plan, an average individual would pay 10% out of pocket for their covered benefits and the plan would pay 90%. However, individuals with high-cost health conditions could end up paying significantly more than the average. Actuarial value is different from the premium for the plan. Premiums for plans that have the same actuarial value will almost always vary from one plan to another, based on the health status of enrollees, the prices of health care services negotiated by the plan, and how many restrictions the plan has on accessing care. For example, plans may have a limited list of participating providers or visit limits, or require patients to try less costly prescriptions first (known as step therapy) in order to lower premiums. In addition to these four levels of coverage, young adults under the age of 30 and individuals exempted from the individual mandate because there is no available affordable coverage will be able to purchase catastrophic plans that cover essential benefits but have high deductibles. 33

34 Making Benefits Easier to Understand: Under the Affordable Care Act (ACA), all health insurance companies and employers offering coverage will have to use the same standard form to summarize the benefits and coverage offered under the plan. With standardized forms, consumers will be able to compare plans and choose one, and better understand the benefits and costs they have under the plan in which they are enrolled. The new, standard plan forms include information on important elements of the coverage, such as the deductible, co-pays, services not covered, and whether enrollees need a referral to see a specialist. These are presented in a way that makes it easier for consumers to make comparisons of their coverage options. The Summary of Benefits and Coverage (SBC) must also include coverage examples of two common medical conditions (managing diabetes and having a baby), offered in a format modeled after the nutrition facts label consumers use now to make informed decisions about food choices. All health insurance companies and employer plans must also provide consumers with a uniform glossary of terms commonly used in health insurance coverage, such as deductible, nonpreferred provider and coinsurance. Some additional points to keep in mind: For a sample of the new summary of coverage, go to: Reports-and-Other-Resources/Downloads/sbc-template-accessible.pdf. To see the uniform glossary of terms, go to: If an employer offers some benefits under a separate policy, such as prescription drug coverage or mental health services, they must provide all the information on one form for the insured. The Summary of Benefits requirement applies to all plans, whether you buy yours on your own or get it from an employer. Health plans must automatically provide the standard summary to a person who completes an application for coverage or to any person who requests a summary within 7 days. Employers must provide the summary when coverage renews (30 days prior to renewal) and upon request within 7 business days. Employers must also provide an updated summary if there is substantial change in coverage during the plan year. 34

35 Premium and Cost Sharing Subsidies Beginning in 2014, individuals who purchase health insurance coverage through one of the new health insurance exchanges will be eligible for financial assistance if their income is no more than 400% of the federal poverty line.these amounts are updated for inflation annually and vary by family size. In 2010, this amount is $43,320 for individuals and $88,200 for a family of four. (Higher amounts apply in Alaska and Hawaii.) Two forms of financial assistance will be provided. A premium assistance tax credit will be provided monthly to lower the amount of premium the individual or the family must pay for their coverage. Cost sharing assistance will limit the plan s maximum out-of-pocket costs, and for some people will also reduce other cost sharing amounts (i.e., deductibles, coinsurance or copayments) that would otherwise be charged to them by their insurance plan. Both types of assistance will be tied in some way to the value of the coverage available in the exchanges. Four levels of plans will be offered by insurers in the exchanges. All the plans must offer a set of essential health benefits that will be specified in future federal regulations and must cover certain categories of benefits. The four plan levels vary in the total value of coverage they must provide. This amount is sometimes called actuarial value and represents the proportion of health insurance expenditures for covered benefits that, for an average population, would be paid by the plan. The health reform law requires that the actuarial value be 60% for bronze plans, 70% for silver plans, 80% for gold plans and 90% for platinum plans. In addition, the out-of-pocket maximum for any of these plans may not exceed a limit that is determined annually. For 2010, the limit is $5,950 for individual coverage and $11,900 for family coverage. Within the restrictions of the essential health benefit definition, the actuarial value rules, and the out-of-pocket maximums, insurers can design plans that vary in cost sharing amounts and benefits offered. 35

36 Premium Assistance The premium assistance tax credit is calculated to limit the amount that an individual or family must pay for health insurance coverage in the exchange as a percentage of income. A sliding scale is used to determine the amount of the tax credit. For those at the lowest incomes (less than 133% of the poverty level) the tax credit amount is based on limiting the individual s premium contribution to no more than 2% of income. For those between 300% and 400% of the poverty line, the tax credit amount is based on limiting the contribution amount to 9.5% of income. The calculation is based on the premium for the second lowest cost silver plan available to them in the exchange, but individuals do not have to enroll in this plan for their coverage. A person who chooses to enroll in a less expensive plan (e.g., the lowest cost silver plan or a bronze plan) will receive the same tax credit amount and they will pay a lower premium. A person who chooses a more expensive plan (e.g., a higher cost silver plan or a gold plan) will receive the same tax credit amount, but will pay a higher premium. Cost Sharing People who qualify for the premium assistance tax credit will also be eligible for cost sharing assistance if they enroll in a silver plan. This assistance will further reduce the limit on the out of pocket maximum that can apply to their coverage, with the amount of the reduction depending on income. For those with incomes between 100% and 200% of poverty, a 2/3 reduction applies. (For 2010, this would make the out of pocket maximum $3,967 for individual coverage and $7,934 for a family.) For others, the reduction in the limit is either ½ or 1/3, depending on income. The precise amount by which an individual s out of pocket maximum is reduced by this assistance depends on what the maximum is for the plan in which they are enrolled. In addition, federal payments will be made to health insurers to increase the actuarial value of the plan for people with incomes under 250% of poverty. For example, for people with incomes between 100% and 150% of poverty, the actuarial value of the plan will be increased to 94%. That means that in addition to keeping within the lower out of pocket maximums established above, insurers must make other changes to increase the actuarial value of the coverage. Most likely this will mean reducing plan deductibles, coinsurance or copayments in order to meet the higher actuarial value requirements. For people with incomes over 250% of poverty, the actuarial value of their plan may not exceed 70%, 36

37 Requirements to buy Coverage in

38 Standards for Health Insurance Plans 38

39 Where do I go for help with insurance questions and/or problems? Many states offer direct help with problems or questions about health insurance, either through Consumer Assistance Programs, the Department of Insurance or the Department of Labor (if you are in a self-insured plan). To find out if your state has a Consumer Assistance Program, you can visit In addition, the Marketplace will offer several kinds of assistance to help you apply for coverage and choose a plan that meets your needs, visit to find online questions and answers, online chat, and a Toll- Free call center at , TTY Local help will also be available through insurance agents and brokers as well as government agencies such as State Medicaid and Children s Health Insurance Program (CHIP) offices. All states will have additional organizations/people trained and certified to help you understand your health coverage options and to help you enroll in a plan. To find help in your area, visit or view the Consumer Resources section of this toolkit. What are the different consumer assistance roles? Navigators: Navigators will have a vital role in helping consumers prepare electronic and paper applications to establish eligibility and enroll in coverage through the Marketplace. This includes steps to help consumers find out if they qualify for insurance affordability programs (including a premium tax credit, cost sharing reductions, Medicaid and the Children s Health Insurance Program), and if they re eligible, to get enrolled. Navigators will also provide outreach and education to consumers to raise awareness about the Marketplace, and will refer consumers to ombudsmen and other consumer assistance programs when necessary. Navigators can play a role in all types of marketplaces. They ll be funded through state and federal grant programs, and must complete comprehensive training. Non-Navigator assistance personnel: Non-Navigator assistance personnel (also known as in-person assistance personnel) will perform generally the same functions as Navigators but will exist in either a State-based Marketplace or a State Partnership Marketplace. Non-Navigator assistance personnel will serve as a part of an optional program that the state can set up before its Marketplace is economically self-sustaining, and before its Navigator program is fully functional. Though they perform the same functions as Navigators, non-navigator assistance personnel will be funded through separate grants or contracts administered by a state. They must also complete comprehensive training. Certified application counselors: The Federally-facilitated Marketplace will designate organizations to certify application counselors who perform many of the same functions as Navigators and non-navigator assistance personnel including educating consumers and helping them complete an application for coverage. These groups might include community health centers or other health care providers, hospitals, or social service agencies. A State-based Marketplace may choose to certify application counselors directly rather than designate organizations to do so. Examples of possible certified application counselors include staff at community health centers, hospitals, other health care providers, or social service agencies. In states that already have their own certification programs, staff at consumer non-profit organizations may also be certified as application counselors by Marketplace-designated organizations. All certified application counselors are required to complete comprehensive training. Agents and Brokers: To the extent permitted by a state and if all Marketplace requirements are met, licensed health insurance agents and brokers may enroll individuals, small employers, and employees in coverage through the Marketplace. Agents and brokers will be compensated by the issuer or by the consumer to the extent permitted under state law. Federal and state training and certification requirements will apply to agents and brokers who enroll or assist consumers in the Marketplace. 39

40 Marketplace Assistance How are these roles funded? 40

41 Training and Certification The changes in healthcare as a result of the Affordable Care Act are being implemented over time. As specific provisions of the law have presented challenges for system change the Administration has been flexible. Therefore we caution that while the provisions of the law will not change some of the implementation dates may. 41