Health insurance helps protect people from being responsible for the entire cost of their medical care. Many people in the United States get a health insurance policy through their employers who in most cases, help pay for that insurance. Employers often hire a managed care plan to provide the insurance they are paying for. People who meet certain requirements, based on age or income level or both, can qualify for government health insurance such as Medicare (including Medicare Advantage ,also known as Medicare Part C, as well as Medicare Part D) or Medicaid. Health insurance may be purchased by individuals from a private provider but it may cost more than employer-based insurance. If a person does not have health insurance, also known as being uninsured, they must pay their own medical bills directly or rely on health care providers or organizations that donate care.
Health Insurance May Cover These Types of Services
A typical private insurance plan, such as one offered by an employer, covers a variety of medical services including doctor visits (including wellness or preventive care such as vaccines), emergency room admissions, lab tests, surgeries and hospital stays. Some plans also offer prescription drug insurance which helps pay for many prescription drugs, including some types of migraine medications. Prescription drug insurance plans may also help pay for medications that have been approved by the FDA for over the counter (OTC) use. This is done to encourage members of the health plan to use a lower cost form of a drug. Dental and/or optical coverage is sometimes offered as part of more comprehensive private plans as well as some Medicare Advantage plans but are not covered by government options like Medicare or Medicaid. Rarely, some alternative or complementary migraine therapies such as biofeedback, acupuncture or herbal medicine might be covered by private plans but not by government options such as Medicare or Medicaid.
Providers of Health Insurance
Private (Non-Government) Providers
Managed Care Plans (Commercial Coverage)
Managed care is a system that controls delivery of health related services to members that are enrolled in order to deliver high quality care in a way that manages or controls cost. There are several types of managed care plans that offer medical coverage including Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO) and Point-of-Service (POS) plans. Many managed care plans offer a pharmacy benefit as well that partially covers medications based on a medication formulary. Plans use a Pharmacy and Therapeutics Committee (P&T) made up of physicians and pharmacists to help determine which drugs will be offered at lower versus higher out-of-pocket costs to the member, including drugs used to treat migraine.
Medicare is federally funded health insurance program that insures all Americans over the age of 65 as well as people with certain other unique medical needs. Medicare has four distinct programs which cover various types of medical and pharmaceutical care including:
- Medicare Part A — covers inpatient hospital and limited nursing home stays.
- Medicare Part B – covers certain outpatient physician and nursing services as well as certain vaccines, laboratory and diagnostic tests and various other medical treatments. Medications are covered under Part B only if they administered by the physician during an office visit.
- Medicare Part C — also known as Medicare Advantage, was recently created during the Balanced Budget Act of 1997. Through Medicare Advantage, Medicare enrollees have the option of getting their Medicare coverage via a private insurance plan. Medicare Advantage Plans include Part A and Part B coverage. Medicare Advantage members also receive additional medical benefits not enjoyed by traditional Medicare members.
- Medicare Part D — Anyone eligible for Medicare Part A or B is also eligible for Medicare Part D, prescription drug insurance. Like Medicare Part C, Medicare Part D is provided by private insurance plans. Enrollees, unless also Medicaid eligible, pay for a certain amount of their annual drug costs, the government (via the insurance plan) covers some additional costs to a certain amount where the member again becomes responsible. Once a member reaches a certain out of pocket cost, the government steps in and covers the high cost. This is called the catastrophic phase of coverage.
Medigap, supplemental insurance which is provided by private insurance plans, is also available at an additional cost for individuals who are eligible for Medicare. This insurance helps pay for medical costs that Medicare may not cover, such as medical co-payments. Supplemental insurance will no longer cover these costs for people who purchase a Medicare Advantage plan because generally there are extra benefits and lower copayments than those offered in original Medicare.
Both the federal and state governments join together to pay for Medicaid health benefits, but people apply and receive their Medicaid benefits from the state in which they live. Medicaid is provided as a health safety net for adults and children with low incomes and certain conditions such as HIV, pregnancy and/or certain disabilities. Medicaid covers low income individuals who might require extended nursing home care. People might receive these benefits directly from the state agency or the state might delegate the administration of their Medicaid services to a managed care health plan (Medicaid managed care). Medicaid expansion is anticipated to be one of the main ways to increase access to health care under the Patient Protection and Affordable Care Act (PPACA) also known as health care reform.
CHIP (Childrens Health Insurance Program)
CHIP is paid for by both the state and federal governments. The original goal of CHIP was to provide additional support to cover children whose families did not qualify for Medicaid but who needed extra help to pay for their children’s health care costs. States vary widely on how they deliver these services. Some states include this program as part of their traditional Medicaid structure, while others deliver CHIP as a completely separate and distinct program.
Veterans Administration (VA)/ Department of Defense (DoD)/TRICARE
The major military health care programs are operated through the Department of Defense (DoD) and the Department of Veterans Affairs. The Department of Defense covers active duty service members and retirees from all branches of the military and their families while the Department of Veterans Affairs covers veterans and their eligible family members. Each program has different rules for becoming eligible as well as different benefits and payment terms. TRICARE is the Department of Defense’s managed care program for active duty military, active duty service families, retirees and their families, and other beneficiaries from any of the military branches well as select National Reserve and Guard members.
Helpful Terms for You to Know
Even after an individual has paid their annual deductible, they may still be required to pay for a portion of their health care services. Often coinsurance is a percentage of a service, such as 20% paid by the insured person and 80% covered by the insurance company.
Copayments are set fees (as opposed to coinsurance which is usually a percentage) that insurance companies require individuals to pay for services, such as a 25.00 copayment for a physician visit. These fees are not related to the type or level of services provided during the visit.
A deductible is the amount an individual must pay out of their own funds for health care expenses before insurance begins to cover costs. Often, insurance plans set an annual deductible, or the amount an individual must spend in a year before their insurance takes over.
Out of Network
Out of network refers to a group of physicians, hospitals, labs or other providers of health care who are not allowed, or are allowed but only on a limited basis, to participate and get paid by an insurance plan for its member’s use of services. Members will either be unable to get reimbursed for using an out of network service or may pay more out of pocket.
A group of physicians, hospitals, labs and other health care providers who, because they have a contract or agreement with a health plan, may provide services to its members for a reduced fee. Plan members usually pay less for using a provider in the plan’s network.