Unlike short-term health care plans (another well-known form of unwanted insurance) that are only available to individual consumers, fixed compensation plans have also been used by employers to avoid regulation. Of course, some employers offer fixed compensation plans that are meant to complement traditional health insurance – an optional income replacement product that employees can carry in addition to their health insurance. However, we find ample anecdotal evidence that employers abuse fixed compensation products and offer them to their employees as a primary health care service for employees, which is inconsistent with the rationale for exempting these plans from regulation. A fixed compensation plan like Health ProtectorGuard is very different from a large health insurance plan. FEMALE: This is a robust supplemental insurance that gives you additional flexibility depending on your health needs. Congress, federal agencies, and states can take all necessary steps to combat abuse of the fixed compensation market and limit the exemption from regulation to plans that truly serve a different purpose than traditional health insurance. Even if consumers fully understand the benefit they are buying, fixed compensation products (like other forms of insured health insurance) choose healthy participants in the regulated market. Thus, while they may represent a more cost-effective, albeit limited, coverage option for consumers who can pass the subscription, they result in higher premiums for those who subscribe to comprehensive and regulated coverage. It also increases costs for the federal government, which subsidizes premiums for about 70% of individual market participants. All forms of unregulated coverage have these effects, although some fixed compensation providers appear to deliberately encourage relatively sicker consumers to take advantage of their market advantages, as shown in Figure 7. FEMALE: With Health ProtectorGuard, there are no network restrictions. You can choose any doctor or hospital of your choice, but if you use providers on the benefits network, you can save money with provider discounts. WOMAN: Health ProtectorGuard is an insurance that pays a fixed amount for an eligible medical benefit.
As shown in the figure, the plan registration documents are technically correct, but give the impression that the fixed compensation plan is a form of employer coverage similar to the regulated plan. As stated above, it is described as coverage for “daily medical expenses” or “medical, Rx and dental services”. This seems likely to be confusing among participants; An employee proposed one of the plans shown in Figure 8 on Reddit with the question “I feel like my employer is intentionally giving me misleading information about my health insurance and I need your help.” Another employee who offered a plan from a major national airline couldn`t figure out how his ulcer medication would be covered, while another, giving advice to a family member on enrollment, was convinced that the plan should have a maximum out of his pocket. Faced with this confusion, people can only register and discover the restrictions if they have a medical event. For example, a Texas man was caught off guard after a $67,000 heart attack on hospital bills, unaware that his employer plan offered most of its benefits through a fixed compensation product that would pay only $400 for the episode of care. [3] Indemnity health insurance is a health plan that allows you to choose the doctor, nurse, hospital or service provider of your choice and gives you the greatest degree of flexibility and freedom in a health insurance plan. A striking example is an app-based product for sale in eleven states[1], which has 170,000 different refund amounts for certain services. To name just a few examples, the plan reimburses $3 for a blood test, $153 for an obstetrician gynecologist, $1,119 for a 30-day treatment of the antibiotic Xifaxan, $7,198 if hospitalized for a skin infection, and $10,903 if hospitalized for a sagging lung.
Figures 1 and 2 show excerpts from the Plan`s website, including a handful of thousands of different payment amounts in this “fixed” compensation product. While the plan is not transparent about how these payment amounts are calculated, Medicare service agreements for hospital admissions and outpatient services appear to largely use the service definitions of the Diagnostic Group (DRG) and the Common Healthcare Procedures Coding System (HCPCS), with a separate payment amount for each DRG and HCPCS code – the same basic structure as many traditional health insurance products. In particular, they offer two health benefits – a regulated plan that covers a very limited number of services (such as primary and preventive care) and a fixed compensation plan that covers all other benefits. A common understanding is to offer only the necessary preventive services of the CBA in the regulated regime and to offer all other benefits through the fixed compensation product. A quick search reveals that many suppliers and consultants market this agreement to employers (usually using the term “MEC plan” to describe the very limited regulated regime). Excerpts from the plan registration documents presented to employees are shown in Figure 8. It`s simple. You or your supplier simply submit a covered edition. The fixed benefit for this eligible service is then paid independently of other insurance coverages.
Compensation plans are considered paid health insurance where you have the freedom to choose your health care services, and as long as your services are eligible, you may be charged a fee based on how the rules of your policy are written. Sometimes health insurance costs more than HMOs and POPs, but the reward is the flexibility of decisions. As explained in our definition of the health compensation plan above, in a compensation plan, you have the freedom to choose your doctor, specialist or hospital with few or no restrictions. The plan is paid for fees for medical tests and prescriptions, as well as doctors and hospitals. They may not pay for some preventive care, such as exams. A significant disadvantage of the fixed compensation plan from the employer`s perspective is that it does not qualify as an offer of coverage under the CBA employer`s mandate. For this reason, it is generally not in the employer`s interest to offer only a fixed compensation plan. However, some employers have developed a strategy that allows them to minimize both their exposure to employer penalties and the scope of the CBA`s consumer protection.
Once you reach the deductible, most compensation plans pay a percentage of what they consider to be a “common and customary” fee for the services covered. The insurer usually covers 80% of the “usual and usual” costs and you pay the remaining 20%, which is called co-insurance. If the provider charges more than the “usual and usual” rates, you will have to pay both the co-insurance and the difference. SCREEN TEXT: Prescription discount card * * No insurance. Discount program only. Federal agencies also have the ability to better monitor how employers offer fixed compensation, even without changing their regulations. The law states that fixed compensation coverage in the group market is an “uncoordinated” exempt service, a term not defined in the law. The existing rules therefore require that “there be no coordination between the provision of services and the exclusion of benefits from a group health care plan managed by the same plan sponsor.” However, remember in Figure 8 that we have seen employers present their fixed compensation and regulated coverage as a set of complementary parts. Employers seem to prohibit “coordination”. with an exclusion” to prohibit only the contractual coordination of performance prohibitions, as this term is used in insurance law. But a more natural use of the term would suggest that the fixed compensation plan in these examples is actually very carefully coordinated with the benefits excluded from the regulated regime. Agencies could explain this in the guidelines and explain that the types of matches that employers offer today constitute illegal coordination with exclusion within the meaning of the regulations.
The kind of freedom that health insurance offers can be valuable in managing your own health care. This is very different from HMOs, APIs, and POPs that use managed care, and may require you to choose a primary care physician as part of the plan. Liability insurance companies pay a portion of your medical expenses to the service provider of your choice, but may be subject to the deductible. The deductible in a compensation plan can range from $100 for individuals to an average of $500 for families, and varies depending on the insurance company. Some compensatory health insurance policies may not cover preventive benefits, while others do. Before choosing a health care plan, be sure to discuss how preventive services are insured and how much compensation you can expect. This will help you make the choice of the best possible plan. In some cases, the cost of these services may not be factored into your deductible. .