There are nearly 30 million people in America living with diabetes. This accounts for almost 10 percent of the United States population (as of 2014). Then there’s another 86 million adults over 20 who are pre-diabetic. Diabetes is an epidemic that continues to grow because proper health care wasn’t readily available – at least until the Affordable Care Act, or Obamacare, came into effect.
Before then, it was virtually impossible for anyone with type 1 diabetes to get health insurance in certain states. At one point, it was referred to as the “automatic denial” condition. Those with type 2 diabetes were able to get their hands on coverage, but at a prohibitive price.
In 2014, insurance prejudice against individuals diagnosed with diabetes was outlawed by the Affordable Care Act, which requires all Americans to obtain and maintain health insurance at all times. This also means that health insurance providers can no longer deny you coverage because of a pre-existing health condition, such as diabetes.
Unfortunately, this lead to hundreds of commercial insurance carriers leaving the health insurance marketplace and only providing coverage privately. What’s left today is a much smaller healthcare marketplace with limited negotiating power on behalf of consumers. Obtaining medical insurance will continue to be a struggle for diabetics, at least until a cure is found. But until then, here are some tips and advice to get coverage.
Individual vs. Group Plans
Generally, diabetics are better off in group plans offered through an employer or union. This is because individual plans tend to cost more and you have to pay 100 percent of the premiums. In a group plan, your employer shares some of the costs. Plus, there’s more competition in the group insurance market, which means higher benefit limits. It’s not common for policyholders to be asked health-related questions when there are 10 or more eligible participants, which is good news for diabetics.
In certain states, it’s required for there to be five participants per group plan. However, there are other states, such as Maryland, which allows a group of one to be accepted no questions asked, as long as the applicant qualifies as self-employed. The same is available to their spouse and dependents. It’s no surprise that uninsurable residents from neighboring states move to the “Old Line State” for access to more affordable health insurance.
Individual plans are different in a number of ways and they almost always require you to answer a series of health questions. You’ll rarely find someone with type 1 diabetes obtaining individual coverage. Even type 2 diabetics have to sign a waiver regarding his or her condition before being given coverage.
One myth that needs busting is that group insurance is always cheaper than individual plans. The premium is based on the age of the group participants. So if you are a 20-something employee in a group health plan with four other 50-something employees, then the group rate will likely be higher than if you were in a group with employees in their 20s.
Another available option for health coverage is self-funded plans. These too can be obtained through an employer or union. With this option, the employer or union self-insures some of the claim and buys an excess policy in order to pay for medical expenses that exceed whatever limits they’ve set. You can think of it like a deductible for auto insurance – the employer pays small claims (i.e. the first $1,000 of medical expenses for the year). This is one way for the employer to save money on premiums. You’ll normally find this option with bigger organizations, but there are some that offer self-funded plans to groups of five or ten employees.
Be careful with opting for this route because diabetics aren’t covered under the same insurance laws states have in place. Only the excess coverage is considered insurance, so the primary benefit before then can be tied to whatever provisions they choose. Make sure to read over all the policy before accepting a self-funded plan.
Managed-Care and Indemnity Plans
There are a number of indemnity carriers on the market that offer major medical plans and hospital-medical plans to groups and individuals. With an indemnity plan, you are reimbursed for any medical bills paid up to a certain dollar amount or a specific percentage of your medical bill. In order for your medical bills to be covered, they have to be considered reasonable by the carrier. Also, any excess amounts you have to pay are your responsibility. In most cases, you’re able to be treated by any licensed physician or specialist.
PPOs are managed-care plans that offers benefits to policyholders that obtain medical care from a physician within their preferred provider organizations (PPO). PPO plans negotiate rates with providers in advance and agree to not charge patients in their plans more than the agreed amount. In exchange for the discounted rate, the providers are guaranteed at least a partial payment for their services and a flow of new patients.
HMOs is another managed-care option, but are different than PPOs. Health maintenance organizations have their own medical practitioners, which have to be used except for in life-threatening emergencies.
The Best Plan for Diabetics
Generally speaking, diabetics are better off getting into a group plan – they’re easy on the pocketbooks, offer good benefits and ensure acceptance with no problems. But make sure to check the provisions to see if there are any exclusions or waiting periods for pre-existing conditions.
If you’re employed, you should check with your employer to see which type of plans are available. Weigh the pros and cons of each. For instance, if you live in a big city with several medical centers in the network, you should consider HMOs. The out of pocket costs are lower, but the premiums are normally higher and you have to use a physician from their network.
Those who want more freedom can opt for indemnity plans like PPOs, which allow you to choose your healthcare professional. But keep in mind that you will be responsible for a larger portion of your medical expenses. The plan with the most choices are those that are self-funded. Remember, though, that these aren’t regulated by your state’s insurance commissioner.