Understanding Health Care Provisions

Poring over your health care plan may not sound like light reading; however, everyone should understand the provisions listed in his or her health care policy. This is especially important if you're coping with a chronic condition, such as a seizure disorder. When reviewing your health care plan, pay particular attention to information about co-payments, co-insurance, deductibles, pre-existing condition exclusion periods, lifetime maximums, and prescription drugs.

Co-payment

Many managed-care plans, such as HMOs, PPOs, and POSs, require you to pay a set dollar amount each time you go to the doctor or hospital. For an office visit, the co-payment often is around $20; a visit to the emergency room often has a co-payment of around $75; and a hospital stay may have a co-payment of around $250.

Co-insurance

Co-insurance is the portion of a health care cost you pay. For example, a health care plan may pay 80 percent of the approved cost of a treatment. You would have to pay the other 20 percent. That percent is your co-insurance amount. Plans vary as to the amount they expect you to pay.

Some plans have a "stop-loss," "breakpoint," or "out-of-pocket" limit. This amount is the most you will have to spend per person each year. For example, an insurance company may have a stop-loss of $5,000. After you have paid the $5,000 in covered deductibles and other covered costs, the insurance company will pay 100 percent of the covered expenses for the rest of the year.

Deductible

A deductible is the amount you must pay each year before the medical plan starts paying a portion of the bill. For example, if your health care plan has a $500 deductible, you must pay the first $500 of covered medical costs before the health care plan begins to kick in. Indemnity plans and some managed care plans charge a deductible.

Pre-existing Condition Exclusion Period

A pre-existing condition is a medical problem you had before you joined a health care plan. When you have a pre-existing condition, you are likely to have to wait a certain length of time before the new plan will help pay the cost of that medical problem. This length of time could be three months, six months, or one year. Employers cannot make you wait more than one year.

Read over your health care plan carefully to see if you will face a pre-existing condition exclusion period. Also, keep in mind that if you have met the following, a pre-existing condition exclusion period doesn't apply to you:

• You have had medical coverage for 18 months.
• You have already met a pre-existing condition exclusion period.
• You have not been without medical coverage for more than 62 days.

Lifetime Maximum

Health care plans usually set a limit on how much they will pay for an illness or injury. This limit is called a "lifetime maximum benefit." When the limit is reached, the health care plan no longer pays for medical care.

Each plan sets its own limit, and the dollar amount of the limit varies widely. Obviously, a health care plan with a high lifetime maximum benefit amount is particularly important for someone coping with a chronic disorder.

Prescription Drugs

Good medical plans pay the majority of the cost of approved medications. Still, you may have to pay part of the cost of medications. Your medication also must be approved under the plan. To find out what medications are covered under your health care plan, ask to see the plan's "formulary."