Navigating the Health-Insurance System When You Have Diabetes

By Alan L. Rubin

As a person with diabetes, you can get insurance for your medical care several ways. The Patient Protection and Affordable Care Act (PPACA or Obamacare) has made it possible for many people who didn’t have health insurance to have some coverage.

The PPACA signed by President Obama in March 2010 has had profound effects on the ability of the person with diabetes to get affordable medical care. Beginning in 2010, insurers could no longer deny insurance coverage to children because of preexisting conditions. Since 2014, adults have the same right. Also beginning in 2010, insurers could no longer drop people who are diagnosed with a new condition such as diabetes or its complications.

Here are some other important provisions of the new law:

  • Creating the Cures Acceleration Network to finance research into cures for diseases

  • Creating a new National Diabetes Prevention Program to fund grants for community efforts to help people with diabetes

  • Requiring restaurant chains with 20 or more locations to post calorie counts for every item they sell

  • Allowing employers to use workplace wellness programs to reward employees

  • Permitting no annual limit on benefits after January 1, 2014

  • Allowing no coverage waiting periods greater than 90 days after January 1, 2014

  • Reducing and eventually eliminating the amount that Medicare patients have to pay for their medications (the doughnut hole) by 2020

  • Providing more payment for preventive medical care

The following sections explain how the PPACA works together with private insurance, Medicare, and Medicaid.

Employer insurance

Half of the US population has insurance through its employer. Any employer with 50 or more employees must provide health insurance under PPACA. Employers with less than 50 employees have marketplaces set up by the government where they can buy less expensive insurance and may get tax breaks if they do. These marketplaces can’t charge more if the employee is sick or for a preexisting condition.

Government insurance

A third of the population has government insurance. Under the PPACA, Medicare (elderly) insurance is similar to what it was before the act, but Medicaid has expanded to cover more poor people. However, the governor of each state must decide whether to allow Medicaid expansion in that state. In states that agree to expand Medicaid, the government covers most of the costs. In those that don’t, no more poor people are covered than before.

Private insurance

A tenth of the population (30 million people) buys insurance. Currently, there are two major forms of payment for medical care — fee-for-service and capitated payment — with a lot of hybrids in between. The old fee-for-service method pays the medical provider — whether a physician, a lab, or a hospital — based on the number of services provided. More services and procedures mean more profit for the provider. So the incentive is to do more in order to make more money (not that providers would ever do more than is necessary for the money).

The other main method of reimbursement is capitation. Here the provider gets a fixed amount of money for each patient. The risk is divided among many patients so that if one costs more, ideally another will cost less. This system is the basis of the health maintenance organization (HMO), which hires physicians to provide the care. HMOs look to enroll people who cost as little as possible for their medical care.

Because they seem to end up costing less money overall, capitation plans are growing while fee-for-service plans are declining. The government is even encouraging HMOs to enroll Medicare recipients in order to reduce costs. At the same time, the government requires HMOs to enroll people who cost more, like most people with diabetes.

Each state has a health insurance marketplace where insurance companies compete for your business by offering plans with more or less coverage that vary in cost from expensive to cheap. These plans can’t charge more for people who are sick or have preexisting conditions. The federal government gives tax credits to those individuals with incomes below a certain level. Regardless of cost, all plans cover doctor visits, hospital visits, maternity visits, and mental health visits. Children can remain on their parents’ plan until age 26 and can buy low-cost catastrophic coverage until age 30.

If you don’t know what your state marketplace is, start with www.healthcare.gov.

As a healthcare consumer, you want to look for a large group containing many patients because such a group can spread out your extra expenses among many people who don’t consume as much medical care. Before you sign up, ask several questions:

  • What is your total annual cost, and how often is a payment required?

  • Will you have a deductible, meaning that you have to pay the first so-many dollars before the insurance starts paying?

  • Will you have a copayment, meaning that every time you use a provider, you have to pay some dollars?

  • Does your plan pay for durable medical equipment, like an insulin pump, which can be very expensive? (You want to ask this even if, when you sign up, you may not foresee a need for it.)

  • Will your plan pay for your diabetes medication and diabetes supplies, and to what extent?

  • Can your physician order any medications you need, or is he or she restricted to certain medications?

  • How often will you need to travel to the pharmacy to pick up medications? (Some plans make you go back every 30 days.)

  • Are you covered for specialists, particularly eye doctors and foot doctors?

  • Are you limited to certain hospitals, certain physicians, and certain laboratories? (If so, this restriction may be much more inconvenient for you, not to mention possibly requiring you to change from a physician with whom you are very comfortable.)

  • Is home healthcare included in the plan, and to what extent?

After you sign up for a plan, you need to be vigilant to be sure you are getting what you paid for. You and your physician may need to make many phone calls to get what you need, but if you persist you can often come away with a “Yes.” The insurance company may provide goods and services that are excluded in your original contract if you’re persistent.

No insurance

Another tenth of the population doesn’t have any insurance, even under PPACA. PPACA mandates a fine if you have no insurance, but the government waves the fine if you absolutely can’t afford to buy insurance. For more information on the Affordable Care Act and its provisions in your state, go to ObamaCareFacts.com.