Cat Flag’s Health Insurance Misadventure

Stethascope image from The Health Care Blog

July is almost over, and boy am I glad. This past month has been quite frustrating for me. There are several reasons for this, but one of the main ones has been trying to get myself health insurance. Man, I never realized just what a mess this seemingly simple task would become, and so I’m writing this blog post as a sort of “heads up” warning for anyone else who might find themselves in a similar situation, to help guide people past the pitfalls and through the confusing language. Hopefully, everyone can learn from my experiences and have an easier time dealing with this issue.

First Some Background: How Healthcare in the U.S. Works

Doctors image from Galaxy Health Network

International Cat Flaggers may find this whole thing rather bizarre and confusing, as virtually all developed, industrialized countries besides the U.S. have some sort of universal health care coverage legally guaranteed by the government – either through the government directly paying medical costs with taxpayer money, or through a government-run health insurance program that all citizens pay into and receive benefits from, or through some sort of partnership with private insurance companies to split the cost of treatments. Those countries that don’t provide universal health care coverage to all of its citizens are almost all impoverished, third-world, underdeveloped countries, and even some of these are at least attempting to improve their systems so that they cover everyone: Rwanda, China, and Thailand, among others.

The United States, though, finds itself in the awkward position of being a developed, industrialized country that doesn’t guarantee health care coverage to everyone. Instead, we have a system where most people are covered by a private health insurance company, paying a monthly insurance bill in return for the insurance company taking on most – but not all – of the cost of medical treatments. For most Americans, insurance is provided through their employer. The companies where Americans work usually subscribe to some sort of group health plan, which has a lower cost per person because the employer often pays part of the insurance bill, deducting what’s left from the employee’s paycheck automatically. Many of these plans will also cover spouses and children, so parents aren’t stuck with the hospital bill if their seven-year-old gets sick.

There are a few problems with this system, though. First of all, the smaller the company, the harder it is to pay for health insurance for employees, so the employees of small businesses may not be covered. Second, many employer-insurance plans require the employee to work full-time hours, so part-time employees are out of luck. Third, there are plenty of Americans who are entrepreneurs or otherwise self-employed, and therefore unable to get the security of an employer-insurance plan. Lastly, the unemployed and the homeless are obviously left in the dust by such a system.

Fortunately, there are programs set up by the government to plug some of these gaps. Retirees are able to get health coverage through a federal-government program called Medicare, and the very poor can get coverage through a federal-state partnership called Medicaid. There is also a program called COBRA Insurance, whereby people who are fired or quit from their jobs can keep their insurance coverage for up to 18 months in most cases, and up to 36 months in special cases.

Yet even these measures are not enough to make sure everyone has access to health care. Those Americans who don’t have private health insurance, either through an employer or by paying out-of-pocket every month for themselves, and who also don’t qualify for one of the government-run schemes for health coverage, wind up stuck in a situation where they have to pay for their doctor’s visit, prescriptions, surgical treatments, and emergency room visits themselves. These can be extremely expensive, as in thousands of dollars expensive.

In 2010, the U.S. government passed a law that, they claimed, would help to fix some of these problems. The Patient Protection and Affordable Care Act, often called “Obamacare” in everyday lingo, has a number of provisions to reduce the number of uninsured Americans. It makes it illegal for insurance companies to deny people insurance or make them pay a higher rate because they happen to have a pre-existing health condition when they apply. The law also requires companies with more than 50 full-time employees to insure them, and allows parents to keep their children on their insurance plans until the child’s 26th birthday, so long as her or she is in college. Lastly, the law sets up low-cost insurance exchanges subsidized by the government for individuals who are too poor to afford ordinary private insurance but not poor enough to qualify for Medicaid.

Though these measures do help, there are plenty of problems with Obamacare. First of all, I can easily see a small business that is just big enough to meet the 50-employee threshold weaseling its way out of having to pay to insure its employees by making many of them work part-time hours. Secondly, the law actually imposes a fine on uninsured people who don’t buy insurance from one of those low-cost exchanges. Those people would be forced to pay the government $95 or 1% of their annual income (whichever is greater) each year they are not covered until 2016, or $695 or 2.5% of their income (whichever is greater) each year they are not covered thereafter. In other words, they would penalize people for being too poor to be insured. Really.

By far the most bizarre thing about Obamacare, though, is that even with all of these provisions it still won’t guarantee universal health care to all Americans. The law contains a number of exceptions and loopholes that keep its provisions from applying to everyone. It also has to be implemented on a state-by-state basis, and thanks to a recent Supreme Court ruling, states have the right to opt-out of some of its provisions. This means there will still be plenty of Americans without adequate access to health care after the law takes full effect in January.

My Health Insurance Experience

Health Insurance Cartoon from East Coast Health Insurance

I am very lucky as far as my health is concerned (*knock on wood*). I haven’t needed to see a doctor or visit a hospital in a very long time. I have no long-running health issues, and have never had to undergo a surgery.

For most of my life, I’ve managed to get by on my dad’s employer-provided health insurance family plans. After all, I’m only 26, and haven’t been an adult for all that long. There was, however, a very, very brief incident about two years ago where I fell into a health insurance gap. Obamacare had just been passed, but its provision that college students could stay on their parents’ health insurance had not taken effect yet. Under the old law, I had outgrown my dad’s insurance, and needed to get my own. Fortunately, I was able to get insurance coverage through my employer. It took time, was a bit of a hassle (filling out forms and such), and was a headache for my boss, who had to take time away from more important matters to deal with my issue. After a few weeks, though, I got approved and put on the company plan.

Then I discovered, the hard way, that the insurance only lasted while I was working full-time hours. Once school started back up and I was back to working part-time, I was booted off the insurance plan like an un-athletic, scrawny kid off a high school football team. I went about three months with no health insurance at all, but luckily I stayed healthy and when the new laws took effect in January I was able to get back on my dad’s insurance plan.

I really hadn’t had to worry about health insurance since, until this month. See, I just turned 26, which means I am now too old to be on my dad’s insurance. The good news came in the mail when I got a message from the government about COBRA insurance. The letter explained that, because of my age and circumstances, I could continue to receive insurance through the same provider, for a fee, for 36 months. Well, I thought, great! I would just sign up for COBRA and not worry about it.

Then I looked at how much my COBRA coverage would cost. It was $561 per month.

Yeah… no.

A Crash Course in Government Health Care

Socialized Medicine image from Family Security Measures

After our previous experience with employer-provided health coverage, my boss didn’t want the two of us to go through all the trouble and hassle of putting me back on the company plan, waiting several weeks for the paperwork to be processed and the insurance company to approve, only to have me booted off again in a mere two months just like last time. That wouldn’t be fair to me, to her, or to the insurance company. It just wasn’t worth it.

There was another reason to not go with my current employer’s insurance plan. I have been busily applying for work in my chosen career field, and if I get hired, I will almost certainly have to leave my current job. Plus, my future employer will almost certainly offer health insurance as well. It just makes sense for me to simply find a temporary solution until I get a new job.

With that in mind, I decided to see if I qualified for Medi-Cal, my home state of California’s variant of Medicaid. It may not be great, but it’s free, which is better than having to pay a monthly bill. I wasn’t sure if my income was low enough to qualify, so I looked on the program’s website to see if I met their minimum criteria, only to find they don’t have the criteria posted. Instead, applications are taken on a case-by-case basis, with any number of possible factors influencing the decision. All right, I thought, I’ll go to the county’s Social Services department, which handles Medi-Cal applications, bringing with me my main identifying papers, most recent paycheck, and most recent bills to see what they could or couldn’t do for me.

If the DMV has taught me anything, it’s that anything having to do with government bureaucracy takes time, and the busier the office is, the longer it will take for my issue to be resolved. Therefore, I arrived shortly after the office opened at 8 AM to beat the crowds. There were two ladies behind a counter labelled “START HERE”. The one on the left asked me for my driver’s licence and social security card, handed me a clipboard with several forms to fill out, and told me that when I was done, I was to give the clipboard to the woman on the right. I sat in an uncomfortable plastic chair, filling out all of my basic information like my name, address, birth date, and social security number, all of which were already on the ID cards they had asked for and photocopied. I then checked the box stating that I was applying for Medi-Cal, filled out my basic income information, and spent a fair amount of time marking “No” to questions about whether I was pregnant, had AIDS, was a disabled veteran, and so on.

With that done, I dutifully returned the forms to the woman on the right side of the counter, and sat and waited. The building was virtually empty, there were only two other people sitting there with me, and yet it still took an hour and a half before I was called. When I walked up to the window, there was a woman looking over my forms who right away informed me that my application was going to be rejected. She explained that if I had children, I would qualify, but as it stood the county wasn’t approving any more applications for single individuals any more this year. To be honest, none of this was all that surprising to me, and I went into this figuring there was a pretty good chance that I would be rejected.

What did surprise me, though, was what she did next. She told me about a different free, government-run health system called the County Medical Services Program, or CMSP. This is a partnership between 35 of California’s counties to help their uninsured residents get the health care they need. I had never heard of this program before, and figured I was already here, why not apply for that? It turned out, though, that CMSP in my home county is handled by a completely different department in a completely different building at the other end of town. Naturally.

I drove out to the CMSP office, and found it was absolutely crowded. All of the seats in the waiting room were taken, and people were lined up out the door. They were from all walks of life: young adults like me, older men in collared business shirts and khaki pants, mothers with small children, and so on. At least the form the CMSP gives you is far smaller. It was a single sheet of paper, with only 14 questions on it. I had that sucker filled out in under a minute. However, one of the questions confused me. It was asking what my medical issue was. I explained to the woman behind the counter that I had no medical issue, other than that my insurance was about to run out.

That’s when she told me that CMSP is NOT health insurance. Apparently, the way the program works is that you only qualify if you are already sick or injured. If, say, I was in a car accident, and had to go to the emergency room to be treated, I could apply for CMSP to pick up the tab for me. If I had an ongoing medical problem like asthma, I could apply for CMSP to help pay for my medication and see a CMSP clinic doctor for free check-ups and diagnoses. Being healthy, however, meant that I wouldn’t qualify for anything, and so rather than waste anybody’s time I returned my clipboard, thanked the lady, and left.

It was as I had figured, I would need to buy private insurance for myself. But that didn’t quite end the story. The next day, while I was shopping downtown with my brother, I got a phone call from the Social Services Department asking about my application. I told them what happened the previous day, with the application and the rejection. They told me that even though I was almost certainly going to be denied, they hadn’t officially rejected my case yet. They wanted to – I’m not joking – mail me some paperwork to fill out and mail back to them just so they could formally deny me. As you can imagine, I thought this was the most ludicrous thing ever, and told them to withdraw my application because I didn’t want to waste anyone’s time. So, the next day, I got a letter in the mail from the Social Services Department telling me, and I’m quoting here:

“We have reviewed all information available to us about your circumstances and find that your application for Medi-Cal has been denied. The reason for this denial is: You requested that your Medi-Cal application be withdrawn.”

Wow. Just… wow. You really had to waste that paper and spend the money to mail that to me, huh? You didn’t figure I’d know that I withdrew my application, you had to mail me a formal denial explaining that to me?

Bureaucracy. Gotta love it.

Navigating the Private Insurance Seas

Polynesian boat from Tahitian goddess

With that over with, I started shopping around for private insurance. Immediately, I was confronted with a flood of unfamiliar and bizarre terms that confused the heck out of me, at first. Soon, however, I figured out most of the lingo so I could understand what, actually, these different plans were offering.

  • First, I had to learn the difference between an HMO and PPO. HMO’s (Health Maintenance Organizations) are tightly-controlled plans where you have to visit specific doctors approved by your insurance company. If you have a specific medical need that requires surgery, specialized treatment, or an MRI to diagnose your problem, you have to first see your “primary care physician” (basically, your main doctor) to get a referral to see the specialist doctor who deals with your problem. PPO’s (Preferred Provider Organizations) give you more flexibility, basically letting you see any doctor you want (though it is still cheaper to visit an approved doctor). The source where I found this information explained that HMO’s are usually cheaper than PPO’s, as the price of letting yourself be subjected to more restrictions. However, for some reason when i was shopping around, the HMO’s I saw were actually more expensive, not less. So, I decided to stick with PPO’s.
  • Premiums are the monthly fee you have to pay to your insurance company. Why they couldn’t just call it a “monthly fee” is beyond me.
  • Co-Payment is something I was at least somewhat familiar with prior to all of this. Growing up, every time I visited the doctor or needed a prescription, my parents always had to give the nurse behind the counter a small amount of cash as “copay”, basically our share of the cost of the visit or treatment.
  • Coinsurance. This is basically the same as a copay, but the only difference is that copays tend to be a fixed amount ($20, for example) while coinsurance will be for a percentage of the bill (30%, for example).
  • Deductibles. This is the one that actually bugs me. The whole point of buying health insurance is that if you get sick and need medical help, your insurance company will pay the bill for you. In return, you pay the premium every month. However, it turns out no insurance company is going to pay your doctors a single penny until you have paid your doctors the amount specified in your deductible. For example, if you have a $2000 deductible, then for every year you have that insurance plan, you have to wait for your hospital bills to tick over to $2001 before your insurance company will get involved at all.

As I hunted through the different insurance plans for sale on the internet, I found that while there are (comparatively) cheap plans out there, they make up for low premiums by pinning you with higher deductibles and higher copays. If you want a lower deductible and copay, you need to pay more each month. The result is that saving money on health insurance is a gamble – you are betting that you won’t get sick or injured while on this insurance plan.

There are some ways to work around this trade-off, though. For example, I found that many insurance plans give patients a lower copay for generic drugs than for brand-name ones. I also noticed that a small increase in premiums ($20 per month, in one case) could lead to a much, much lower deductible or copay.

There was one odd thing I noticed, though. Many plans I saw required a huge deductible or copay for trips to the emergency room, but waived all or most of these costs in you are actually admitted into the ER. Is this their way of trying to discourage people from calling 9-1-1 for every minor problem and saving it for true emergencies?

Eventually, I found a PPO plan that fit my budget and gave me deductibles and copays I could live with. I applied online, and have yet to hear back on whether I will be approved or not. Odds are, it will probably be a few weeks until I find out. Until then, I guess I’m just going to have to drive safely and try not to get sick.