Understanding Health Insurance

Making Sense of Health Care Costs and Coverage

When you’re coping with bipolar depression, costs and coverage may be the furthest thing from your mind. But it’s important to have a basic understanding of what kind of insurance plan you may have – or want to get – and some common terms. Getting informed about how insurance coverage works may help make this process a bit easier.

What is the Affordable Care Act?

You may have heard of the Affordable Care Act (ACA) or “Obamacare.” It is a U.S. health care reform law that lets more people access affordable health insurance. So, if you don’t have health insurance, you can learn more by visiting www.healthcare.gov.

Who Pays for Health Insurance?

The type of health insurance plan you have determines who pays the premium on the plan. The premium is the amount that is owed each month for the insurance coverage. Here’s how the different plans work:

  • Employer-sponsored/funded: Often called “group health insurance,” these plans are provided by employers that pay for a significant portion of their employees’ health care expenses.
  • Health Insurance Marketplace: A resource where people and small businesses can compare prices for health insurance plans. Individuals and families with low or moderate income may be eligible for a tax credit that refunds a portion of the premium with these plans. The Health Insurance Marketplace is also referred to as “the Exchange”.
  • Self-Employed Health Insurance: People who own their own business and do not have any employees can get insurance coverage through the Health Insurance Marketplace or by shopping for a policy through a private insurance provider.
  • Subsidized Health Insurance: These are state and federal programs that provide health coverage at a reduced cost or at no cost for low-income families as well as elderly, blind, and disabled individuals. These programs include Medicaid, Medicare, Healthy Families, and Children’s Health Insurance Program (CHIP).

What are the Types of Health Insurance Plans?

Health Insurance plans vary in terms of what costs are covered and which health care providers you can use. Some plans require you to use the plan’s network of health care providers, hospitals, and pharmacies. Others let you use providers outside their networks, but you may pay a greater part of the cost. In addition, your health care plan may also have a separate prescription drug plan, which you can learn more about through your health insurance provider.

The following are some of the types of health insurance plans:

  • Health Maintenance Organization (HMO): You choose a primary care doctor from the insurance plan’s network of providers. Your primary care doctor usually must approve care by a specialist by giving a referral. Visits to any health care providers outside of the network are usually not covered, except in emergencies, so it’s important to know if your doctor is in-network.
  • Exclusive Provider Organization (EPO): You can only get coverage if you use doctors, specialists, or hospitals in the plan’s network. This is usually true for all services, except emergencies.
  • Point of Service (POS): You pay less if you use health care providers and hospitals that are in the plan’s network. If you want to see a specialist, this type of plan requires you to get a referral from your primary care doctor.
  • Preferred Provider Organization (PPO): You can use out-of-network providers and hospitals without a referral for an extra cost. This cost is different from plan to plan. If you use providers in the plan’s network, you pay less.

What are Important Terms I Should Know?

Insurance comes with its own language, and it’s often a confusing one. Be sure to ask a nurse or doctor if things are unclear. They are there to help you sort it out. In the meantime, here are some important terms and definitions to get you started:

  • Claim: A formal request asking for coverage from an insurance company for a specific service. The insurance company reviews the claim and then pays for the services, pays for a portion of the services or denies the claim.
  • Co-insurance: The percentage of health care costs you pay after meeting the insurance plan’s yearly deductible.
  • Copay: A set dollar amount that an insurance plan requires you to pay each time you receive services.
  • Coverage determination / exception: Coverage determination is a written explanation from your Medicare drug plan. It is a decision made by your drug plan about your benefits, concerning whether or not a certain drug is covered and how much you must pay for it. A coverage exception is a type of coverage determination that involves a request to have a drug covered that is not on your formulary, to change the tier of a specific drug, or to waive a restriction for a specific drug.
  • Deductible: The amount of approved health care costs you must pay out of pocket each year before the health care plan begins paying any costs.
  • Formulary: The prescription drugs that a prescription drug plan or health insurance plan covers.
  • High-Deductible Health Plan (HDHP): A health insurance plan that has a higher deductible and lower premium than traditional health plans.
  • Out-of-network care: Health care providers, hospitals, pharmacies, and other facilities that are not part of an insurance plan’s approved list or network. Out-of-network care often costs more.
  • Out-of-pocket costs: Expenses not covered by insurance.
  • Out-of-pocket maximum: A set amount of money that you must pay before an insurance company will pay 100 percent of your health care expenses.
  • Preauthorization/Prior approval/Precertification/Prior authorization: A decision made by your health insurance provider or plan that determines whether a health care service, prescription medication, treatment plan or medical equipment is medically necessary. Except in the case of emergencies, your health insurance provider or plan may require preauthorization for specific services before you receive them. Getting preauthorization does not mean that your health insurance provider or plan will cover the cost.
  • Pre-existing condition: A medical condition that a person already has at the time he or she enrolls in a new health care plan. With the Affordable Care Act, you cannot be denied insurance or pay a higher premium due to a pre-existing condition.
  • Premium: The amount a person and/or employer pays each month for insurance coverage.
  • Reasonable and customary fees: Insurance plans decide how much they’ll pay for a certain medical service by looking at the average cost for that service in a geographic area. If a doctor’s fees for a service are higher than average, the difference must be paid for by the patient.
  • Step Therapy: If a drug or service is not on formulary, your plan may require that you try a less expensive drug or service first and then if that therapy is ineffective, you can move to a more expensive prescription or service.
  • Tier: A grouping of medications on a formulary. The tier that your drug is in determines how much you will pay for it.

Where Can I Find More Information?

You can contact your own health insurance provider for more information about health insurance and prescription drug coverage. The following are additional resources that you can turn to online for more details on and mental health:

American Psychological Association (APA)
www.apa.org/helpcenter/parity-guide.aspx

HealthCare.gov
www.healthcare.gov

healthinsurance.org
www.heathinsurance.org

Mental Health America
www.mentalhealthamerica.net/how-insurance-works

National Alliance on Mental Illness (NAMI)
www.nami.org/Find-Support/Living-with-a-Mental-Health-Condition/Understanding-Health-Insurance

Patient Advocate Foundation (PAF)
www.patientadvocate.org

Medical and reimbursement specialists are also available to answer questions about your insurance coverage for Latuda® (lurasidone HCl). You can call them at 1‑855‑5LATUDA (1‑855‑552‑8832) anytime between 8AM and 12 midnight (EST).