Walmart is making a splash this week, with its announcement that it will make 300 different generic drugs available to customers for just $4 for a 30-day supply. Walmart is launching the program in Florida, then says it plans to roll it out nationwide. Because Walmart is the world's biggest retailer, the move could have profound effects on the cost of medications and consumers' views of generic drugs. Furthermore, Walmart's offer is open to people with health insurance and without. That got me thinking about the 45-million Americans who don't have healthcare coverage and other ways those folks can save.
Have you ever wondered how health insurance came to be an employment benefit? I mean, what's the connection? It's not like that in most other countries. Turns out it's an accident of history. During World War II, workers were scarce and companies were cash-poor because of the Great Depression. Since they couldn't afford high wages, companies began offering "fringe benefits" to attract workers. Group health insurance was one of those benefits. Since it came about as such a fluke, it could just as easily disappear. If you lose your company health benefits, you'll want to be ready. If you never had company benefits in the first place, there are strategies to keep costs down.
If you lose your benefits because you lose your job, that's simple. Thanks to the Congressional Budget Reconciliation Act, or "COBRA," you are entitled to buy into your previous employer's group health insurance plan for up to eighteen months. You'll have to pay the full premium instead of just a co-pay., but it's still cheaper than buying individual health insurance. The COBRA plan benefits you: if you leave a company and become unemployed or self-employed; if you are under 23-years-old and your parent leaves a company; if you are the divorced spouse of an employee who worked at the company for at least three years; or if you are the survivor of an employee who worked at the company for at least three years.
If you do need to buy your own health insurance, there are ways to save. For example, after your COBRA eligibility expires, try asking that same insurance company to convert you from group to individual coverage. It'll be more expensive than what you're used to paying, but possibly less than if you were to buy coverage from a company that doesn't know you. Compare that rate to what you can get in the open marketplace for individual insurance. Shop around. The health insurance industry says there are now lots of competitive individual plans out there.
Another idea: try to get a group rate somewhere else. Trade associations, professional organizations and alumni clubs sometimes offer group health plans. I recently heard that an association of people who are self-employed is currently offering decent rates on healthcare coverage. Some labor unions offer healthcare coverage if you work freelance in a union job just a few weeks a year. If you are over age fifty, you can join AARP and get access to an extensive healthcare plan. Here's an odd one: some credit card companies offer healthcare coverage deals.
If you choose a managed care plan for your healthcare needs, beware of "balance billing." There are a couple different variations. Many managed care plans negotiate discounted prices with their member doctors. Some doctors then turn around and try to bill the patient to make up the difference. Balance billing also happens when a managed care provider goes bankrupt and doesn't pay at all. In that case, the doctor may try to bill you for the entire amount. Balance billing is illegal in many states. Some even require managed care plans and their participating doctors to sign "hold harmless" agreements with each other, so that patients are protected if the plan goes belly up. As long as you see a plan doctor for covered services, a co-payment should be your only responsibility.
Winnie A. has a lot of medical problems. She's also a savvy consumer. Winnie's taken the time to educate herself about her HMO plan. So when a couple different doctors started sending her balance bills, she was livid. Winnie returned the bills with a letter stating that they were illegal. The doctors sent more. Winnie contacted state authorities, but they showed little interest because the amounts were so low. Eleven dollars here, twenty-nine dollars there. Finally, Winnie contacted me and I contacted her doctors and the state. This was years ago. Winnie's doctors stopped balance billing and state officials started enforcing the law.
QUESTIONS TO ASK: When you're shopping for a health plan…
1. Should I buy insurance that covers most medical care, including routine visits? Or should I just get insurance that covers more catastrophic problems? (You'll make this decision based on your health and your income.)
2. What's the deductible? And after I pay it, what percent of my medical bills am I responsible for?
3. How much will it cost me to use an out-of-network doctor?
4. Is my current doctor covered by the plan? How easy is it to switch primary care doctors?
5. Do I have to get permission to go to a medical specialist?
6. Are preexisting conditions covered? How are chronic conditions treated?
7. Does the plan cover alternative treatments like acupuncture and chiropractic care? What about preventive care like mammograms and immunizations? How about birth control?
8. Does the plan cover prenatal care and childbirth?
DO YOUR HOMEWORK:
1. See how different health plans are rated. Check with the National Committee for Quality Assurance, www.ncqa.org or try the Joint Commission on Accreditation of Healthcare Organizations, www.jcaho.org.
2. Contact your state insurance commissioner or medical licensing board to find out how many patients have filed complaints about the plan. These agencies can also tell you how many patients drop out of the plan each year.
3. Ask your doctors which healthcare plans they've had positive experiences with.
4. Learn to recognize balance billing. Keep in mind, doctors who do not participate in your plan are allowed to bill you for the amount your plan doesn't pay. Doctors may also bill you for procedures your plan doesn't cover, so check first before undergoing an unusual procedure.
5. If you're self-employed, don't forget to write off your health insurance premiums on your taxes.