Guide to Health Insurance for Chronic Illness

Chronic illnesses are long-term health conditions that do not have a cure nor preventative vaccines.

The most common examples of these illnesses include arthritis, dementia, cancer and diabetes.

A 2017 study conducted by the Research And Development Corporation (RAND) found that around 60 percent of people in the U.S. have lived with a chronic illness since 2008.

If you are currently living with a chronic illness, it is important to select the right insurance to suit your specific healthcare needs.

You must ensure your medications are covered under your insurance policy and that you are able to receive your medication within the appropriate timeframe.

It can be difficult to navigate through the complexities of health insurance, as there are numerous plans available through various providers. This guide provides you with the information you need to consider before you enroll in a health insurance plan.

What to Look For Before Choosing a Plan

There are many important factors to consider when looking for medical coverage.

Those who have been diagnosed with a chronic illness must take even greater care in selecting the appropriate healthcare plan.

The first thing to check is that your medication is covered in the policy you are considering.

Every insurance plan has a list of prescription drugs the plan covers, known as a drug formulary.

You can consult this list in advance on the insurance provider’s website to confirm your medication is listed. This makes it easier for you to compare plans before finalizing your decision.

Formularies typically include several tiers to categorize generic and brand name medications.

However, each provider may format it differently and use abbreviation. As such, be sure to familiarize yourself with the terms appearing on these documents.

Once you find your medication on the formulary, check which specifications apply to that tier.

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The tier your medication is in will determine the amount you will pay. Typically, there are three to four tiers in a formulary, often with the first tier as the most expensive.

For each insurance plan you study, make a list of the tiers and specifications for your medication. This can help you compare the plans and decide which insurance provider is best for you.

Determine Out-Of-Pocket Costs

The next step in finding the right health insurance plan for a chronic illness is to create a budget and determine your out-of-pocket costs with each plan.

There are several terms you should be familiar with as a policyholder, as they relate to the expenses you may have to pay:

  • Deductible is the amount you must pay before your insurance begins cover the remainder of the expenses. For example, if your deductible amount is $2,000, you must pay $2,000 in health care costs before your insurance coverage starts to pay the remaining balance.
  • Coinsurance is the amount you pay for a covered service after your deductible. It is normally a percentage of the cost for things such as health care visits and medications. For example, if your co-insurance is 20 percent and your medical costs are $200, you must pay $40 of the $200 total.
  • Copayment is a fixed rate you must pay every time you use a covered health care service.
  • Out-of-pocket maximum is the maximum amount you must pay out-of-pocket in a one-year period. It includes your deductible, coinsurance and copayment. Once you have paid your out-of-pocket maximum, your insurance provider pays for everything at 100 percent.

Get Financial Assistance for Out-of-Pocket Costs

Financial assistance is available to help you pay your out-of-pocket expenses. You can:

  • Open a health savings account (HSA). This is a benefit offered to employees of certain companies. Only policyholders with a high deductible health plan qualify for this account. With an HSA, you pay for your deductible and eligible out-of-pocket expenses by using money from your pre-taxed income.
  • Open a health reimbursement account (HRA). This works under the same principle as an HSA. The main difference is that it covers the cost of medical expenses not covered by employer-sponsored insurance. With this type of account, your employer determines the eligible services, establishes a limit and reimburses the employee after he or she pays for the medical expenses.
  • Open a flexible spending account (FSA). Employees can use this benefit with any type of health insurance policy. Having an FSA helps you to pay for medical expenses by placing your pre-taxed dollars into an account to pay for out-of-pocket health care costs.

Avoid Delays in Getting Your Prescription

Many prescription drugs require prior authorization, which can cause a delay in receiving your medication if it has not been authorized in advance.

This means your health care provider must fax a request to your insurance provider before you can receive approval for pick up at your local pharmacy.

You may have to wait for an extended period before your insurance provider approves this request.

To avoid this hassle, you must understand the prescription process for each health insurance plan you are considering to ensure you understand how the process works.

Typically, a label appears next to the medication on the plan to indicate that in your plan, your medication requires prior authorization.

Avoid Accumulator Adjuster Programs

Accumulator adjuster programs cater to individuals using a drug co-pay cards. Manufacturers typically give these cards to help reduce the cost of medication.

Accumulator adjuster programs do not allow copay cards to count toward the cost of deductibles.

For instance, an individual with a $5,000 copay card and $5,000 deductible cannot use the card toward the deductible once the card reaches its full limit.

As such, individuals will still have to pay the full cost of the deductible. With this in mind, people with chronic illnesses do not benefit from health insurance plans with an accumulator adjuster program.

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