Chapter 3: Getting to the bottom of what's actually covered
Health insurance plays an outsized role in our lives. But does anyone really know how it works? Or, for that matter, what it really says? In this series, I will be talking to my dad, a retired healthcare executive, about a variety of topics to get some clarity on private (employer-supplied) health insurance.
Jeremy Sachs spent 30 years working for a Fortune 500 insurance company. During much of that time, as House Counsel for the Employee Benefits Division, he advised corporate managers of the Division on a wide range of legal issues relating to the Company's group health insurance policies, including during the times when the Health Insurance Portability and Accountability Act (HIPAA) and the Americans with Disabilities Act (ADA) were passed and instituted.
This series does not apply to Medicare, Medicaid, Obamacare (The Affordable Care Act, or ACA), or individual health insurance, unless otherwise specified.
Once upon a time...You’ve just leapt into the next step of your career at the Most Selective Company in your field, or MSC. MSC offers several coverage options under the Marginally Generous Insurance Company, or MaGIC. The enrollment period for new employees is 14 days. If you don’t enroll in the given timeframe, you will lose whatever coverage options you had until the next open season.
You lug home what feels like a banker’s box full of policies to sift through and forms to sign, but you know health insurance is the most important one. You have an expensive medical condition and can’t afford to pay for your drugs or doctors’ appointments out of pocket. But you’ve never had your own health insurance policy.
What do you do now?
The goal of a health insurance plan is to spare your wallet as much as possible. You will need to know what you can afford, what your needs are likely to be over the next year, and which of the plans MSC is offering covers the most of those needs.
First, the code key (every indecipherable document has one):
Find the short one called something like Benefits Booklet or Benefits Summary or Highlights of Your Coverage. This is the one that gives an overview of all your coverage options: your monthly premium, deductible, and coverage levels for each type of plan offered according to how many people will be covered (single person, single + spouse, family, etc.). This is like the executive summary. It only hits the high points, but does not say what, exactly, is covered. And what isn’t. For that you will need …
The longer one, typically 30-40 pages. The technical term for this one is the Summary Plan Description (SPD) and will have a longer title, likely with the words comprehensive and group in it. This is the “authoritative” document. If there are discrepancies between the summary and the SPD, go with the SPD.
Second, what actually needs to be decoded?:
Once you have those two documents in front of you, feel free to pull in your partner or spouse if you have one to share your misery. You are going to do a document comparison! Lucky you.
The problem is, in order to choose the best plan, you will need to compare plans both to your list of needs and to each other. Wait, you don’t have a list of your needs? OK. That should be easy enough (and a good reason to put off actually looking at the policies). In order to start compiling your list:
- Review your family’s medical history.
- Make a list of the types of services you have needed, and the ones you think you will need. For example, if your condition requires consumable medical supplies (not drugs), you will want a plan that lists those kinds of supplies in the “Are Covered” list.
- Highlight the things on the list that are the most important to you: the most likely, most expensive, most frequent, etc.
Last, cost estimates (yes, they are as tedious as they sound – fair warning):
Once you have your list in front of you, and anyone else you want to torture sitting with you, take a look at the shorter document and assess if any of the plans would kill your budget completely just by the premiums and/or deductible (if it’s not listed separately, make note to ask whether the in-network and out-of-network are separate or not). If so, you have eliminated one plan to compare.
Keep the summary open and open the SPD. You don’t want to hear this, but now you have to read the whole SPD. There is a place in that document that has an exhaustive list of what is and isn’t covered, but clarification often comes in other parts of the policy. Write any questions you have in the margins or on the paper that holds your list. Cross them out as you come across the answers. If the questions aren’t answered by the time you finish, you should ask MSC’s Human Resources staff for answers before you choose your plan. If the HR staff has to reach back to MaGIC for answers, be persistent, and remember that you are on a deadline.
When you’re done, find that page in the SPD that you’ve already read with the list of what is and isn’t covered by the plans you are considering. Check it twice. If Santa can do it for a third of the planet, you can do it for a couple of health insurance policies.
Once you have an idea of the plan you want, you can get a pretty decent estimate of your annual expenditure by estimating how many times you will need the types of services on your list and multiplying that by the fee listed on the summary for that service. Highlight anything you will need that isn’t covered and add that to the total, along with the out-of pocket maximum or deductible (if you’re like me, you burn through that in less than six months.), and the monthly premium times 12.
Now you know what’s covered and what isn’t. MSC has answered your questions. You’ve estimated what your costs will be over the next year. Time to choose a plan. Congratulations! You’re covered.