What are my health insurance options?
What is traditional health insurance or commercial insurance?
What is a health maintenance organization? (HMOs)?
What does HIPAA eligible mean and how does it apply?
What is creditable coverage?
How do I purchase health coverage?

What are my health insurance options?
Health insurance is available to consumers in a variety of plans and coverages. Listed here are some of the most common.

1. Medical and Hospital Coverage

• Major Medical
  Pays the cost of hospital bills and medical bills. You pay any appropriate co-payments and deductibles. The policy covers only the eligible expenses listed.
• Managed Care
  Provides preventive care and services basic to good health. Out-of-Pocket costs are generally less than traditional health insurance. Care is given by the plans network of doctors and hospitals. The managed care plan could be through a traditional health insurance company or a health carrier that provides managed care plans only. Managed care always has a provider network with specific rules to follow if you need care. These plans cover basic care, which is often not included in major medical coverage.
• Alternative Finance and Delivery System (AFDS)
  Provides limited health services, such as dental, optical or podiatric care. AFDS are responsible for the access, availability and quality of health services provided. AFDS have a contracted network of providers.  Most coverage through an AFDS is available to groups.
• Hospital-Surgical
  Pays only expenses directly related to hospitalization, which usually includes room and board plus doctors' charges.
• Short-Term
  This coverage lasts for only a specified length of time, but for no longer than 180 days in any case. For example, you might buy a six-month policy with major medical coverage for the months that you are between jobs and between group coverage. These policies do not cover pre-existing conditions.
• Catastrophic
  Has high limits but pays only after you have paid a high deductible, sometimes $2,500 or more.
• High Deductible Plans
  These plans are Major Medical coverage, but are sold in conjunction with Health Savings Accounts. They pay the cost of hospital and medical bills, but have very high deductibles that you pay from your federally tax exempt health savings account.

2. Limited Purpose Coverage

• Accident Only
  Pays only when you are treated for accidental injury or if an accident causes death.
• Disability Income
  Pays a fixed amount for a specified period of time when you are unable to work because of an accident or illness.
• Hospital Indemnity
  Pays a flat amount (such as $100 per day) when you are hospitalized.
  
Long-Term Care
Pays to take care of you for an extended time in a nursing home or your own home. See the Shopper’s Guide to Long Term Care Insurance at: www.michigan.gov/documents/cis_ofis_ltcshop_23739_7.pdf
• Medicare Supplement
  Pays some medical expenses not paid by Medicare. (See the Choosing a Medigap Policy at www.medicare.gov/publications/pubs/pdf/02110.pdf
• Special Need
  Pays for health care not covered by typical major medical policies (for example, dental or vision care).
• Specific Disease
  Pays only for treatment for a disease or condition specifically named in the policy such as cancer.
• Home Health Care
  Pays for health care delivered to you in your home.

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

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

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

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

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

What does HIPAA eligible mean and how does it apply?
Throughout these web pages, it will be helpful to know if you qualify as a HIPAA eligible individual. You are a HIPAA eligible individual only if you

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

You are not HIPAA eligible unless you meet ALL of these conditions.

What is creditable coverage?
The concept of creditable coverage is that individuals should be given credit for previous health coverage when moving from one employer group health plan to another, from an employer group health plan to an individual policy, or from certain kinds of individual coverage to an employer group health plan.

Most health coverage is creditable coverage, including prior coverage under a group health plan (including a governmental or church plan), health coverage (either group or individual), Medicare, Medicaid, a military-sponsored health care program such as TRI-CARE, a program of the Indian Health Service, a State high risk pool, the Federal Employees Health Benefit Program, a public health plan, and a health benefit plan provided for Peace Corps members, a stand alone prescription drug plan, or a foreign country’s government health plan.

How do I purchase health coverage?
Individual vs. Group Coverage
There are two basic ways to buy health coverage: as an individual or through a group.
How you buy health coverage affects your rights and responsibilities.

Individual Coverage

• You contract directly with a health carrier just like insuring your home or car.
• You are the policyholder.
  HMOs call the contract-holder (the person in whose name the contract is written) a subscriber, member or enrollee
• Your individual policy can cover your entire family and each family member would be an insured.
• The health carrier needs approval from the Office of Financial and Insurance Services to increase rates.
• Any premium increase affects everyone who has the same kind of policy.
• Unless you have made false statements on your application, filed fraudulent claims or failed to pay your premiums on time, the company cannot cancel your policy because of your health or claims.
• Coverage must include specific minimum benefits.

Group Coverage

• A group insurance policy may cover two to thousands of people, but it is still only one policy.
• Your employer or trade association is the master policyholder; you and your fellow employees are certificate holders.
• Each family member covered under your certificate is an insured.
• The master policyholder negotiates the terms of a group policy with the insurance company.
  The master policyholder can
  • Reduce or change the benefits and coverage,
  • Increase your share of the premium,
  • Switch to another insurance company, or
  • Stop providing any coverage!
  In a group contract
  • Rates for employer groups are negotiable and are not regulated by the Office of Financial and Insurance Services, except in the instance of Blue Cross Blue Shield of Michigan.
  • The contract must include specific minimum benefits required by state law —other benefits are negotiated by the master policyholder.
  • The master policyholder does not need consent of certificate holders to change companies or policies, cancel the policy or agree to new premiums or benefits.
  Large and small employer group contracts
  • May cover more conditions than individual contracts.
  • May have more generous benefits.
  • Cannot reject an application because of poor health as long as the application is made during the eligibility period.
    Large employer groups are defined as having more than 50 employees.
    Small employer groups are defined as having 2 to 50 employees.

Sole Proprietor Coverage

• Must be self-employed
• Cannot insure employees under this policy
• May have many of the same benefits as a small group policy