California Health Insurance 101

Helping to make the California Health Insurance Shopper a Savvy Shopper!

This site offers a comprehensive discussion of important components of California health insurance for the California medical insurance shopper as well as other in-depth insurance information, but just a basic understanding of the popular terms used in the industry does not a savvy health insurance shopper make: Let’s take it a step further and help you, the client, understand theory that we can then help you put into real world practice, because, after all, that’s what we’re here for! Selecting the right California health insurance option for you, your family, or your business is too important to your long term financial wellbeing to try this as an exercise in “self-serve”. You can rely on a member of the Vitality health insurance team to guide you through the selection process of the CA health insurance options that are right for you. You have a team of health insurance professionals at your disposal and at no charge to you (Ever!) to help you make vitally important health insurance decisions that safeguard accumulated current assets and protect future earnings in the short, medium, and long term future. We think that’s a great deal and we’re confident you will too!

Let’s check out some of the current areas that should be of primary concern to California health insurance shoppers on the lookout for insurance information:

Shopping for California Health Insurance: Premiums versus Benefits

California health insurance can be expensive. It can be expensive in much the same way that everything else we need to provide for ourselves and our family has turned much more expensive over the course of time. We view health insurance as a basic need: It ranks right there with the food we purchase to feed our family, the mortgage or rent we pay to keep a roof over our family’s heads and assorted other “mandatory priorities” that are found in each and every household budget across the state.

Given the state of the economy in recent years and the reduction we’ve all seen in our own sense of “personal wealth”, not to mention rising unemployment and the general sense of economic uncertainty which replaced the high consumer confidence numbers in the last decade that now seem like ancient history, it might be easy for California health plan shoppers to slip into a mode we call “shopping for premiums instead of benefits”. This approach to the purchasing process of California health insurance products becomes one where the consumer who needs insurance for themselves or their family shops strictly based on the price of the insurance plans they’re reviewing. They know they need insurance and endeavor to buy something – anything! –that represents health insurance so they can then turn to the next thing on their financial to-do list (And who doesn’t have a long and imposing one of those, these days?). The problem with this approach is that while they purchased some form of California health insurance, they didn’t purchase a CA health insurance plan that will do a very meaningful job of protecting them and their family in a very efficient manner from the standpoint of effective coverage that speaks directly to their family’s unique healthcare or financial needs.

Look, at this point, we all know that in today’s healthcare scene, even a small medical procedure can come with a frighteningly large tab. If you have a family with children, you know that trips to a doctor’s office or an emergency room for the bumps, bruises, or ear infections that are a part of growing up are not the exception but the rule. As such, it doesn’t take long before the economic reality of a badly chosen health care plan sets in and the California health insurance plan you chose based on its premium rather than its set of benefits comes back to bite you.

We mentioned unique before: Your family has a unique set of California health insurance requirements and we think that is the single best word to describe it: Unique. And that’s where we come in: It’s our responsibility to help you find not just the most economical plan that works for your budget but to help you find a California health insurance plan that doesn’t wind up punching a surprising large hole through the bedrock of your family finances. When you or a loved one is sick, the priority should rightfully be on the road back to wellness. That’s the time when you can least afford the stress and anxiety that comes with financial worry. Helping you make the right decisions in advance as they relate to selecting the California health insurance plan that’s right for you and your family in the long run is what our job is all about and we do it without payment from you. We are your free resource in this vitally important process: Our services are paid by the insurance companies supplying California health insurance to the residents of our state. You do have a trusted strategic partner in this vital decision-making process and that partner is Vitality Health Insurance.

Understanding Your California Medical Insurance Options with COBRA/HIPAA

We’re here to serve the needs of residents throughout the state who are looking to maximize their financial resources and secure the California health insurance that’s right for them from both a performance and a financial standpoint and that means we’re here to answer your questions as they relate to maximizing your COBRA options too: The Consolidated Omnibus Budget Reconciliation Act of 1985 known commonly as COBRA where you elect to continue your coverage after separation from your previous place of employment. Contact us and let us help you. We’ll clarify any information you are seeking regarding COBRA’s benefits to relation to your family’s finances and their healthcare needs. Further, we’ll help you understand what your options are should you elect to continue or discontinue your COBRA coverage.

We help by applying knowledge and creativity to the California medical insurance process: For instance, you as the employee might find that - due to a preexisting medical condition - continuing COBRA for yourself is an entirely necessary option. However, we can help you realize that continuing COBRA for you doesn’t preclude setting up your spouse (and eligible children) with an entirely viable and cost saving individual California health insurance plan that suits their needs and your finances. We are sensitive to the fact that this is a difficult time for you and your family from both a financial and emotional standpoint and our help is free of charge and a part of the comprehensive service package we provide to California residents.

Health Insurance Portability and Accountability Act (HIPAA): Okay, you’ve been utilizing your COBRA coverage option for the past 18 months. You have exhausted your COBRA coverage and expensive though it may be you had California medical insurance for you and your family. Now you’re nervous. Because of age, health issues, what have you, you are gravely concerned that with the end of COBRA eligibility you’re going to be out in the cold for your healthcare coverage. Here’s where HIPAA helps:

• HIPAA gives eligible individuals who have lost group coverage (Think COBRA) the ability to purchase individual California health insurance without the need to pass through underwriting nor can they be turned away for preexisting medical conditions.
• IMPORTANT: You have 63 days after COBRA has been exhausted to file an application for that California health insurance policy with an insurer - who is obligated to offer you a choice of at least two of their most marketed individual California Health insurance plans. Also: DO NOT purchase either a conversion or short term California health insurance policy as doing so will void your HIPAA eligibility! 

We take our responsibilities very seriously: Please contact a Vitality Health Insurance professional for information and ready assistance in the COBRA/HIPAA process. With job loss and perhaps a host of other concerns, we understand that you likely have more than enough to worry about. Take advantage of the professional and cost free service that is a consultation with the health insurance professionals at Vitality Health Insurance!

California Short Term Health Insurance: The Right Option for You and Your Family?

Above we talked about continuing your California health insurance plan that you were utilizing through your previous place of employment: COBRA. You might believe that a recovering economy will likely provide new employment opportunities and group healthcare insurance coverage through a new employer for you or a spouse in the very near future. Contemplating that possibility, you might be thinking of going the temporary California health insurance route with a purchase of a California short term health insurance policy to bridge this temporary “gap”. While we pray that whatever negative situation you and your family might currently find yourselves in is a blessedly brief one, we want you to know that you can likewise rely on our professional team of California health insurance professionals to guide you through the advantages and disadvantages of going with a temporary California health insurance solution.

Advantages of short term California health insurance include the ability to secure coverage pretty quickly – sometimes within 24 hours; the ability to lock in coverage for a fixed period that could last anywhere from one month on up to six months and might be able to secure extensions on these periods; premiums for temporary California health insurance can be more affordable and can also provide freedom of choice amongst healthcare providers.

On the other hand, the temporary California health insurance route can also bring its share of disadvantages and you should be aware of these as well: Let’s start with the biggest problem that comes with a short term health insurance policy: You secure a short term policy, and then, struck by a serious long term condition, you then basically become uninsurable and fail to qualify for a permanent health insurance policy you might have otherwise qualified for previously when you had the opportunity to go with a permanent option but decided to go the short term route. Short term policies don’t have a lot of “bells and whistles”: They can be bare bones in their features as their main function is to serve basic needs for a limited period of time. And limited is just that: Limited. There is no guarantee that you will qualify beyond the expiration date of that first short term policy period.

Bottom line: “Permanent” doesn’t have to mean permanent. You are not legally obligated to keep a permanent plan in the event you do later qualify for a group health plan and decide to leave your individual/family policy for the cost/ features advantages found in the form of your new employer’s group health plan. Again, here’s where the California health insurance professionals of Vitality Health Insurance can help you make informed decisions that are made with the broadest spectrum of knowledge about the impact your decisions can have on the health and financial wellbeing of your family.

California Health Insurance comes in all flavors: Indemnity, PPO, HMO, POS, HSA, EPO, FSA

What’s the right California medical insurance plan for me?  In this section we’ll look at the dollars & sense of what your California health insurance policy is all about. This is an important component of your family finances and the professionals at Vitality Health Insurance are determined that you have a complete understanding of how the California health insurance product you choose from amongst the many California health insurance options we represent such as from an Aetna, a Blue Shield of California, or a California Blue Cross company like Anthem, works to your benefit and help you avoid any information gaps or misinformation that could creep into the process and damage your finances at a later date.

Premium: Very simply, the monthly tab for the price of your California health insurance policy. Premium costs are determined through the process of underwriting wherein the California health insurance company determines the “risk” you would represent as a policyholder (i.e. – preferred, standard, sub standard) and determines the price that is acceptable for extending you a policy for California health insurance coverage.

Cost-Sharing: Practiced by your insurer in a variety of forms, cost sharing is a means to hold down costs for the insurer and to help the insured make what the insurance company hopes will be better, more financially prudent decisions about the healthcare they seek. Examples of cost-sharing include: Co-payments, deductibles, coinsurance.

• Copayment: More typically found in the HMO model, this involves the payment of a flat fee at the time of all medical treatments. Co-payment at the time of your medical appointment or emergency room visit might be “X” dollars. Example: “My son hurt his knee skateboarding and when we visited the emergency room we were required to make a co-payment of $25….”
• Deductible: Found in a variety of forms such as their application – per set period; per accident, illness; per family member, the deductible is typically a stated dollar amount that the policyholder pays before the insurance company will start contributing to t he cost of the service received by the policyholder. Your annual family deductible is $3,000. At $3001, the insurance company will pay their percentage from there.
• After the deductible, expect to see coinsurance. Coinsurance is basically this: After the deductible is “met”, the policy holder pays their percentage of all charges with the insurance company paying their own percentage of the costs. Example: “I have a $2500. After I pay the deductible my share of covered costs from there is 20% while my insurance company pays 80%....”

Covered Services: Your California health insurance policy is a written agreement between you and the insurance company. Your policy contains a listing of medical benefits that you will receive per the policy you now hold. These benefits can be diagnostic tests, treatments, and so forth and constitute the covered services you as the policy holder can expect for yourself and your family (If covered by a family policy.). Your policy will also denote services that are not covered by the policy now in force. You, as a responsible policyholder, have both the right and obligation to review your policy and gain an understanding of what your insurer is offering you in the form of medical benefits.

Another term in this category: Exclusions. It is important and prudent to understand what the exclusions in your policy might be as you would be responsible for 100% of the cost of these services if they are not covered by your California health insurance policy.

Coverage limits: Health insurance policies can be written in such a way to pay up to a certain dollar amount. This can apply in two situations: The first - specifically related to a particular medical service or – a second situation – wherein an annual maximum or lifetime dollar amount is applied to the policy. In a situation like this, the policyholder would be expected to pay anything over and above these coverage limits.

Out-of-pocket maximums: Now the flip side of coverage limits – the out-of-pocket maximum for your California medical insurance: Once reached the policyholder’s obligation to pay for any further medical and/or prescription costs ceases for the balance of that specific benefit year.

Prior authorization: This is a cost containment method by your California state health insurance provider wherein the certification or approval your health care provider or even pharmacist may need to secure from your insurance company that basically says the insurer is okay with your receiving a particular form of treatment or drug. Lacking prior authorization the burden of payment could fall on you, the policyholder. When in doubt or if contemplating a major medical procedure, contact your insurer and verify whether or not a prior authorization or “pre-certification” is not necessary.

Explanation of Benefits (EOB): A document sent to the patient covered by California medical insurance that explains how the claim was handled by the insurance company: What the insurance company will cover for a particular medical procedure. An explanation will typically list the procedure, what the healthcare provider would have charged had you not been covered by California health insurance, what the healthcare provider accepted as payment – if they were an in-network provider - and will then denote what payment remains that will be the responsibility of the policyholder if any.

Pre-existing Conditions: Be certain to understand how your new policy will work in regards to any illness, ailment, injury, for which the insured received treatment or consulted with a physician about within a certain period of time leading up to either the application or issuance date of your new policy. A pre-existing condition could lead the insurance company to take any of the following actions as it relates to your application:

• Decline (Reject)
• Totally and permanently exclude: Just as the name implies. You are covered for health insurance but not for this particular condition. Ever.
• Waiver for impairments: The insurance company stipulates that it will not cover any subsequent ailments or conditions that derive from the pre-existing condition itself.
• Temporary exclusion: The insurance company initially excludes this condition from covered benefits but reserves the option to later allow the condition to be treated under the terms of the policy.
• Issue on a sub-standard basis: The insurer agrees to take on the insured – condition included – but only at a higher premium cost to the policyholder. The sub-standard rating can be permanent or temporary – at the discretion of the insurance company.

Change in Member Status: Please be aware that if you or a spouse becomes pregnant in the course of owning a policy, this “change in member status” may have been specifically excluded in the policy you purchased.

Understand your Provider Network: It is important to understand the differences found in the type of California health plan you apply for. First, let’s take a look at what constitutes “in-network” and “out-of-network”:

In-network: When you see a physician or other provider that is contracted with your insurer to provide healthcare services at a contractually agreed upon discounted rate, you are seeing a healthcare provider who is “in network”. This cost containment method of managed care holds down healthcare costs and you, the insured, are typically “rewarded” with reduced fees for the healthcare services you receive.

Out-of-network: Any healthcare services received from providers who are not contracted to provide those services with your insurer. Going out of network will typically result in higher costs to the insured.

Now, let’s take a look at the two most popular California health insurance options: The PPO and HMO.

You can have access to a broad array of physicians and providers through a Preferred Provider Organization (known also as a Participating Provider Organization or Preferred Provider Option)  – commonly called a PPO. A PPO basically consists of medical providers like doctors, hospitals, laboratories, test labs, physical therapists and a whole host of other healthcare facilities and providers who have contracted with your insurance company to provide services at a previously agreed upon rate which is typically less than you or I would pay otherwise. While you can choose to see a physician or other healthcare provider outside the network, you will likely pay more for that privilege. Have an ailment or condition that requires the attention of a specialist. With a PPO plan you can go directly to the in-network specialist of your choice and do not require a referral from a primary care physician.

Why you might choose a PPO Plan for your California Health Insurance:

• You or a member of your family has a doctor they feel comfortable with and trust. This doctor is in-network and you want to continue that relationship.
• If the need for a specialist should ever arise, you want the freedom to pick and choose your own doctor and go directly to that physician without the need of a primary physician referral.
• If you ever decided to go outside the network and healthcare costs were not a factor in your decision-making process, you want to have that option.
• The ability to manage your own healthcare choices and decisions is important to you and a PPO gives you that sense of ownership in the decision-making process.

 Why you might choose against a PPO Plan for your California Health Insurance choice:

• Life is complicated enough and the thought of dealing directly with more bills from healthcare providers or trying to manage my own healthcare decisions just seems too burdensome.
• Financial restraints make the higher costs of a PPO impractical for your family’s finances.
• You like the idea that HMOs have more government oversight/regulation than PPO networks and that gives you a greater sense of comfort.

The Health Maintenance Organization or HMO as it is commonly referred to, is another California medical insurance plan that you can purchase here through the professionals at Vitality Health Insurance. The HMO is a type of managed care organization that provides another form of healthcare coverage for you and your family. An HMO can typically consist of an organization of doctors, generalists such as internists, pediatricians, general practitioners, family doctors who act as your primary care physician. These PCPs act as a gatekeeper to other medical services such as specialists (i.e. – orthopedist, cardiologist, neurologist, etc.). Basically, in each medical event, you start with your PCP and if your PCP believes it is warranted, you will receive a referral to a specialist for further treatment or consultation. (Please note that your PCP’s referral is also reviewed and given a ‘pre-approval’ by your HMO.)  Your PCP can be part of a medical group and that group in turn is part of a larger network of doctors, medical groups, labs, hospitals, and other providers who work for the HMO or have a contract with it. Want to go outside the HMO network? You’ll have to receive permission from your HMO. Permission can also be granted in cases of emergencies or urgent care situations when you find yourself physically outside the range of your HMO plan, too. The HMO model is basically driven by the concept that these plans provide cost containment not found in other plans such as Preferred Provider Organizations (PPO).

Many of us are familiar with the HMO model through the group health plans offered by employers. Offered within the context of a range of group health options to employees, the HMO model is a less expensive option whereas in the world of California individual health insurance, the HMO is a more expensive option. It boils down to this for consumers: In a PPO plan you are paying less on a monthly basis but will share more of the cost when the day comes that you will need medical care (examples include deductibles, coinsurance and so forth…) whereas in an HMO you will pay a higher monthly premium but will assume a lower cost burden when receiving medical attention.

Why an HMO California health insurance plan be right for you and your family:

• HMOs will typically offer extensive basic benefits such as a wide array of laboratory tests, diagnostic tests, X-rays and the like. The HMO model is also built on the concept of preventative care so as to help avoid more serious (i.e. – costly) medical conditions later down the road, thus preventive or pro active medical care is a built in part of the HMO model.
• You want to be able to rely on the skill and expertise of a primary care physician who will offer counsel on the treatment options that are available to you and will help guide you through the medical treatment process.
• You want simplicity in your medical finances. With just a co-payment at the time of your doctor visit, you leave the world of complicated medical billing behind you when you enter into the care of an HMO.

Why an HMO California health plan might not be right for you and your family:

• You want freedom of choice. If you believe that a specialist can provide better care for a medical event for you or a member of your family, you want access to that specialist now without the need to secure a referral from a primary care physician acting in the role of gatekeeper.
• You want additional freedom of choice in the breadth and width of doctors available to treat a medical condition. You believe that a wider selection of doctors outside a very defined network offers greater success in treating a given medical condition.

California Health Insurance comes in Indemnity, PPO, HMO, and also HSA, FSA, EPO, and POS

We’ve covered the PPO and the HMO. Now let’s turn our attention to the solving the mystery of these tax-favored “spending accounts” known as HSA – ‘Health Spending Account’ and FSA – ‘Flexible Spending Account’. While we can brag a bit and try to make these sound more complicated than they really are, we know you’ll appreciate our directness and brevity by simply saying this:

A Health Spending Account (or HSA) is simply a tax advantaged savings account which is commonly used in conjunction with an HSA-qualified high deductible California health plans (High Deductible Health Plans (HDHP). These accounts contain funds that accumulate interest in a tax free account (Think IRA.) and can be withdrawn (likewise tax free) if applied towards qualified medical expenses. Funds deposited into your HSA but not withdrawn each year can carry over into the next year and in all subsequent years for use as needed.

A Flexible Savings Account (FSA) can be used for a variety of applications such as medical expenses, dependent care (Such as day care), or other applications depending on the creativity of the employer who sets up these spending arrangements through the employer’s cafeteria plan of employee benefits. Money deposited in an FSA can be used to pay for those medical expenses not covered by the employer’s medical plan: Deductibles, co=payments, coinsurance and the like.

It seems like wherever you find the topic of California health insurance, you’ll find acronyms and here’s a few more we can clear up for you during today’s visit:

The EPO or Exclusive Provider Organization is a variation of the Preferred Provider Organization (PPO) wherein the concept combines features of both a PPO and HMO in that employers agree to contract exclusively with a particular network of healthcare providers.

The POS or Point of Service is a type of managed California health insurance plan. It likewise combines features of the HMO and PPO models in that you choose a primary care physician from within a given network. This PCP then becomes your “point of service” who then can make referrals to specialists or other health care providers either in or out of network (Out of network will results in lower compensation from your California health insurance company.). With a POS plan in-network treatment paperwork is handled on your behalf. Out of network paperwork becomes the insured’s responsibility.

Indemnity Policy (Traditional Fee-for-Service Insurance): This California health insurance option is the poster child for choice for the consumer. If there was a California health insurance dictionary, right next to the words freedom of choice, there would be a picture of the Indemnity Policy. This type of policy allows the policyholder the greatest amount of freedom in the medical provider they use and where they choose to use that medical provider. Have a doctor who is hundreds of miles away or even outside of the state of California, and also doesn’t belong to some form of managed health care network and this is “The” doctor for you? Well with few if any geographical limitations and no “network” constraints, the Indemnity Policy for your California health insurance might be just the ticket for you and your family. It goes without saying – but we’ll say it anyway –this kind of freedom comes with a higher price tab for coverage. The finances of Indemnity are fairly straightforward: There is typically a deductible to be met followed by a co-payment (aka – coinsurance) based on the amount you the policyholder are responsible for as called out in the policy (Example: The California health insurance company pays 80%, you pay 20% of the bill.)

You might have a range of deductible options depending on the policies offered by the insurer. 
Other features of the Indemnity policy you should be aware of when shopping for your California health insurance: Make certain the services you are receiving are “covered services” and count towards your deductible; find out if your Indemnity policy features a maximum out-of-pocket feature: Reach that maximum and the California health insurer is responsible for the full amount that exceeds your “cap”.  There might also be a few other considerations worth the pause in your California health insurance deliberations: With Indemnity you are at the wheel of your healthcare vehicle.  That wheel comes with a lot of paperwork – there will be claim forms and reimbursement checks to deal with. Indemnity policies are not “blank checks” – the California medical insurance company you choose will make payments based on “UCR” – Usual, Customary, and Reasonable for covered services. UCR is based on what other medical providers would typically charge for those same services in a given geographical area where that provider is located. If your provider is a Rolls Royce in a land of subcompacts, well…you will be expected to pay the difference.

Prescription Drug coverage:  Drugs are not just used to treat an ailment or injury of an immediate/short term nature. Many California health insurance policyholders find themselves on long term drug therapies such as statins that control cholesterol levels and which are also reported to reduce the risk of strokes and heart attacks. Just as with the California health insurance policies that come in many shapes and sizes and can be chosen based on the need of the consumer who is shopping for healthcare coverage, there is a range of prescription drug coverage options (prescription drug formulary) which should be carefully reviewed and selected based on the unique needs of the client and their family. Again, this is where your Vitality Health Insurance professional can be of invaluable assistance to the client in helping to craft a California health insurance coverage package that considers all the possibilities and helps preserve and protect the long term health and financial interests of the client.  

Supplemental Health Insurance Policies: The supplemental California health insurance policy is designed to pay in addition to your comprehensive major medical coverage. These supplemental policies do not – we’ll repeat that – do not replace your traditional California health insurance policy such as the Indemnity, PPO, HMO, EPO, POS policies we speak of here at the Vitality Health Insurance website. These supplemental California medical insurance products are intended to cover the inevitable costs that might arise as a result of a serious specific illness (think cancer) or an accident that leaves you with a serious impairment. Another example would be the hospital indemnity insurance policy which can provide a cash benefit for each day, week, or month you find yourself hospitalized. That cash benefit goes directly to you and helps to cover the inevitable flow of added expenses that come with a prolonged or even relatively short absence from work combined with illness or injury. Let the professionals at Vitality Health Insurance help you understand the role of supplemental California health insurance policies in your health insurance toolbox.

Thank you for your review of the insurance information found within this section! Much more information can be found via a review of our website’s Vitality Health Insurance Site Map!