Insurance Confusion

Lets face it, insurance terminology can be confusing, these terms make it hard for people to truly understand what they owe or what they are responsible for when they go to a doctor, hospital, or service provider.

As insurance professionals, Phoenix Captive employees run into people everyday that are confused by insurance terms simply because these terms are made to be that way.

Here are some of the most common terms Phoenix comes across and a brief explanation of each.

Co-Pay

This a set dollar amount for a covered service that you must pay when visiting a doctor, specialist, urgent care or emergency room.

Typically, these are paid on the spot at your visit or for a prescription.

(In general, a co-pay does not count towards deductible. They are typically applied to the Out of Pocket Limit.)

Deductible

Under most insurance plans your health care bills are not covered right away, typically you are asked to pay a certain amount before coverage “kicks-in”, this is called the deductible.

It is how much your plan requires you to pay before the insurance carrier starts to cover your bills.

Because of this a good rule of thumb typically is cheaper the plan, the higher the deductible. 

Coinsurance

Some insurance plans expect to pay a percentage of the bill even after you’ve met your deductible. For example, you could be on the hook for 20% or 30% of the bill while in the insurer pays the rest.

This is what is known as co-insurance, as the insurance carrier is sharing part of the cost of the covered service.

Out of Pocket Limit

While deductible and coinsurance could mean you end up paying a lot of money for health care, the good news is there is a limit to what you’ll be responsible for paying. This is what is known as the Out of Pocket Limit, If you end up with thousands of dollars of medical bills one year, the insurance will cover 100% of your medical services for the rest of the plan or calendar year.

Explanation of Benefits

Often when people receive these they are mistaken for the bill, it is not. An EOB is just the overview of what your doctor billed to the insurance company and what the insurer has agreed to cover. This typically give you an estimated cost of how much you might be expected to pay. The medical provider will send a bill separately that is your responsibility to pay.



This article was written by Phoenix Captive Solutions C.F.O. Blake Coats, any views or opinions do not necessarily reflect the opinions of either Phoenix Captive Solutions LLC, or any associated entities.  

Feel free to write to Blake at blake.coats@phoenixcaptive.com  



The Power Of Collectivity

Business insurance (group health, dental, vision, workers compensation, etc.) are all pieces required to build a thriving business in the world today.  Providing a robust benefits package has become as important, if not more important than just the salary a specific position demands.  As a business owner, in order to maintain a healthy bottom line and continue to do business, there are often compromises that are made to keep the lights on.  The business owner leans on their trusted advisors for assistance at being a good steward of their resources.  The CPA helps with the taxes and expenses, their HR department keeps them in compliance thru knowledge of the ever-changing employment guidelines, the operations group steadies the ship to point the business in a positive and productive direction, and so on.  What can their broker do?

Any good broker should be doing more for their clients than simply trying to shop for less expensive coverage at the cost of giving their client less.  Our job as the broker is to work on behalf of our clients, and not just try to find them the cheapest alternative.  In today’s ever devolving health insurance arena, that challenge continues to loom.  But we should be looking at new and innovative ways to enhance our clients with useful knowledge, tools, and options.

A frequent option for businesses to save money on insurance costs is the concept of “pay as you go” workers compensation insurance.  Not to get too technical, but a typical workers compensation plan has an annual audit to make sure all employees have been accounted for, and paid premium accordingly.  In many instances the workers compensation carrier has to “true up” the premium for the year, and the client is left with having to catch up before renewal.  The “pay as you go” model means that the workers compensation is tied directly to the monthly payroll.  The payroll determines who is covered, so each month the premium would reflect who is employed.

Pay as you go workers compensation is one way to avoid having to catch up at the end of a policy year, but it does not alleviate the concern of having to pay premium.  If businesses were aware of innovative ways to avoid paying so much for insurance, I am sure they would.  It is a matter of education, and we believe the job of the broker to do so.  A trusted advisor is not an order taker if they want to be taken seriously.

So what are the options?  Well, we get back to what insurance actually is.  A collective pool of risk that spreads out claims over the whole and charges premium accordingly.  In essence, the power of the collective brings down the individual business exposure.  It’s simple, and it’s what everyone has always been taught insurance was.  But do we really believe it is functioning this way?  And if it is, are there better ways to build a collective?  We, the broker, think so.

Let’s stop thinking about the conventional way to go about covering risk, and move toward a more common sense approach regarding business insurance.  By using the power of the collective, we can spread out the risk, and keep the costs down.  Through other vehicles, clients may be able to use their assumed annual premium payments, and create a profit center instead of a loss leader. 

This article was written by Phoenix Captive Solutions C.O.O. David Ainsworth, any views or opinions do not necessarily reflect the opinions of either Phoenix Captive Solutions LLC, or any associated entities.  

Feel free to write to David at dainsworth@phoenixcaptive.com

Vision Insurance Overview

People with vision insurance are twice as likely to schedule a routine eye exam as those who do not. And according to many optometrists, “a very thorough eye exam will catch eye disease and discover health issues you may not have known you have, such as high blood pressure, diabetes, even brain tumors.”

 

What Vision Insurance Covers

Like health insurance, vision insurance can aid with the cost of examinations, treatments, prescriptions, surgical procedures, and equipment. Some of the things most commonly covered by vision insurance plans include:

Eye exams. This preventive care measure is generally performed once a year and involves a series of tests to gauge the health of your eyes across several different parameters. The things tested for during an eye exam can include the sharpness of your vision, color blindness, how your eyes work together as a unit, a presence of glaucoma, your range of peripheral vision, and more. Eye exams can be instrumental in providing an early detection of eye disease, any developing vision problems, or a need for corrective lenses. 

Eyewear. Glasses (frames and lenses alike) and contact lenses can be expensive but are often at least partially covered by vision insurance. Some vision insurance plans may limit coverage to eyewear purchased through your optometrist or a network-approved vision center. Sometimes, even prescription sunglasses may be covered. 

Lens coatings and enhancements. Some vision insurance plans can help with the cost of a lens coating. Lenses can be coated with substances to decrease scratching, fog and moisture, reflections, and exposure to ultraviolet rays. 

Surgery. Surgeries that are deemed medically necessary, such as a procedure to treat an eye injury, infection, or disease, will often be covered by a health insurance plan. But corrective surgery, such as LASIK, is generally not covered by health insurance because it is deemed by many insurance providers to be an elective or “cosmetic” surgery. However, there are some vision insurance plans and discount programs that will partially cover such elective procedures.

 

Cost of Vision Insurance

Service

Cost Without Insurance

Cost with Insurance

Savings With Insurance

Eye Exam

$154

$15 (Copay)

$139

Frames for Glasses

$159

$9

$150

Eyeglass Lenses

$86

$25 (Copay)

$61

Lens Enhancements

$268

$170

$98

Total

$667

$423

$244

 

In the example above, you can see the savings for a pay of glasses and exam was $244 for a pair of glasses and an eye exam. Some may ask, well you did not include the cost of the vision insurance itself. The average market cost per plan is somewhere between $6-$10 per covered person. Even if you take that into consider on the high end $10 *12 = $120 (Year of coverage); you would still walk away with $124 dollars in savings per person (From example, $244 (Savings) – $120 (Cost of Insurance).

 

Vision Insurance in the Workplace

Under the Affordable Care Act, companies with at least 50 employees are required to provide group health insurance for their employees or face a penalty. However, vision and dental insurance are not required as part of this mandate. 

As a result, vision insurance benefits granted by an employer-sponsored plan are the exception, not the rule. In fact, only 35 percent of companies that offered health insurance in 2014 provided any sort of vision benefits.

Meanwhile, from Phoenix’s experience, the two most popular voluntary benefit programs for employees are vision and dental insurance.

Vision Insurance for Children

While vision and dental insurance for adults is not a requirement of the Affordable Care Act, vision benefits for children is a required benefit offer under all plans that qualify as “minimum essential coverage.”

This means that all children under the age of 19 enrolled in individual, family, and small group health insurance plans must be offered basic and preventive care for vision.


If this all seems complicated, a licensed insurance agent can help you understand the options that are best for you and your family. Our Phoenix Captive Solutions staff are always more than willing to help.

This article was written by Phoenix Captive Solutions C.F.O. Blake Coats, any views or opinions do not necessarily reflect the opinions of either Phoenix Captive Solutions LLC, or any associated entities.  

Feel free to write to Blake at blake.coats@phoenixcaptive.com  



Dental Plans: MAC vs UCR

Let’s been honest, a lot of dental plans and coverage can be confusing. Especially when you are not sure of how much you may pay for a certain service or what your plan covers. In the dental insurance world, there are two primary styles of coverage and how they determine how much you will pay.

To make sense of how this works, you’ll need to know whether you have a MAC plan or a UCR plan and understand the difference. MAC stands for Maximum Allowable Charge and UCR which stands for Usual, Customary, and Reasonable. Basically, these terms refer to the way that coverage is determined when you visit an out-of-network dentist.

Under a MAC plan, the reimbursement for services provided by an out-of-network dentist is capped at the Maximum Allowable Charge (MAC). For example, if you visit an out-of-network dentist who charges $150 for a cleaning (covered at 100%), but the MAC is set at $100, insurance will cover $100 and you will be responsible for the remaining $50.

Under a UCR plan, the limit on reimbursement is set based on the Usual, Customary, and Reasonable (UCR) value for your geographic area. A UCR value is calculated for each dental procedure by tracking all the claims that have been submitted for a particular procedure within a particular geographic area. The UCR value is then set at a level where a certain percentage (usually 80 or 90%) of fees charged for that procedure in that area are less than the UCR value.  Complex right?

How about I try to simplify with an illustrative example: two fictional people who have dental insurance plans with Acme Insurance, Mack and Ursula. Say Mack and Ursula both need a filling and they decide to see the same dentist, Dr. Tooth, for the procedure. Dr. Tooth, being one of the best dentists in the area, charges $200 for a filling.  Unfortunately, Dr. Tooth is not a part of the Acme network, so both Mack and Ursula are subject to out-of-network coverage. Let’s see what they’ll each owe.

First up is Mack’s appointment. Mack is enrolled in an Acme Insurance MAC plan, and under Mack’s MAC plan, fillings are covered at 80%. The PPO Fee for fillings on his plan is set at $150, so Acme Insurance will reimburse Mack $120 (80% * $150) and Mack will be responsible for paying Dr. Tooth the remaining $80.

Later that day, Ursula has her appointment. Ursula is also enrolled in an Acme Insurance plan, but hers is a UCR plan. The UCR percentile on her plan is set at 90%, which comes out to a UCR Value of $180 in her area. Dr. Tooth charges $200 for a filling, so Acme Insurance will cover $144 (80% * $180) and Ursula will cover the remaining $56.

  Mack Ursula
Insurance Type MAC UCR
Procedure Filling Filling
Dr. Tooth’s Charge $200 $200
Acme Insurance Max $150 (PPO Fee) $180 (90th Percentile UCR)
Service Level Charge $120 (80% * $150) $144 (80% * $180)
Member Pay $80 $56


Now I know that was a lot to take in hopefully this should clear up some of the more confusing points. The important thing to remember here is that these are examples and does not necessarily mean that one style of dental plan is better than the other. It is important to look at these things with your broker or agent to understand what might be best in your area.

In this example, Ursula owed less money to Dr. Tooth than Mack owed with his MAC plan. Does this mean that either option is better? Not necessarily. UCR plans are sometimes preferred in areas where the number of in-network dentists is not as strong or if a group has a high number of members who see out-of-network dentists. A UCR plan guarantees that 80-90% of dentists in a geographic area charge less than the UCR Value for a certain procedure, so there’s a good chance that seeing an out-of-network dentist won’t be more expensive than seeing an in-network dentist. MAC plans are typically more affordable, but their fee schedule means it’s more likely that seeing an out-of-network dentist could be more expensive than seeing an in-network dentist. So, they’re usually a better choice for groups in areas with larger numbers of in-network dentists, and groups whose members are already patients of in-network dentists.

If this all seems complicated, a licensed insurance agent can help you understand the options that are best for you and your family. Our Phoenix Captive Solutions staff are always more than willing to help.

This article was written by Phoenix Captive Solutions C.F.O. Blake Coats, any views or opinions do not necessarily reflect the opinions of either Phoenix Captive Solutions LLC, or any associated entities.  

Feel free to write to Blake at blake.coats@phoenixcaptive.com  

Dental Insurance: What does it cover?

Dental insurance often comes in the form of “100-80-50.” This means that the insurance provider pays for 100 percent of the cost of preventive care (such as cleanings and routine checkups), 80 percent of the cost of basic procedures (such as fillings or root canals), and 50 percent of the cost of more advanced procedures (such as bridges or crowns).

What Dental Insurance Covers

Dental insurance can go a long way in helping to pay for a number of services that range from basic care to advanced surgical procedures.

As evidenced by the 100-80-50 model, the more advanced the procedure, the less coverage you might expect to receive from your dental insurance plan.

These services, in order from the most basic of care (widely covered by dental insurance) to the more advanced (not as widely covered) include:

Preventive care. Routine dental exams and cleanings typically take place every six months and are covered in full by most dental insurance policies.

Restorative care. Restorative care consists of any minor procedures to treat damaged or decayed teeth, such as fillings.

Endodontics. More advanced damage or decay will require more involved procedures like root canals.

Oral surgery. Common oral surgeries include teeth removal, the drainage of infections, and gum tissue biopsies.

Orthodontics. This includes the installation, maintenance, and removal of braces and retainers.

Periodontics. Periodontics involves the treatment of gum disease, infections, and lesions.

Prosthodontics. Fittings and installations of dentures and bridges can be expensive, and you will need a quality insurance policy to help alleviate this cost.

The Cost of Not Having Dental Insurance

Many people avoid the dentist simply because they don’t like going. Others stay away because they don’t enjoy the cost. In fact, according to the U.S. Department of Health and Human Services, almost 108 million Americans do not have dental insurance,

But the ones that do will incur many of the same out-of-pocket expenses as regular health insurance, including premiumsdeductibles, and copayments or coinsurance.

While this may seem like a burden, it can pale in comparison to the cost of some dental care services without insurance.

Listed below are some average shelf prices for common dental services.

  1. Exams (including x-rays and cleaning) = $288
  2. Fillings (single, silver-amalgam filling) =  $50 to $150
  3. Tooth extractions (non-surgical, gum-erupted) = $75 to $300
  4. Crowns (single resin) = $328
  5. Root canals (single, exposed) = $120

Dental insurance can often be a confusing industry as it is not as heavily regulated as the health insurance industry. Also, often dental offices will have their own internal version of insurance on a monthly schedule by paying their office directly.

Dental Insurance in the Workplace

Under the Affordable Care Act, companies with at least 50 employees are required to provide group health insurance for their employees or face a penalty. However, vision and dental insurance are not required as part of this mandate. 

As a result, dental insurance benefits granted by an employer-sponsored plan are the exception, not the rule. In fact, only 53 percent of companies that offered health insurance in 2014 provided any sort of dental benefits.

Meanwhile, from Phoenix’s experience, the two most popular voluntary benefit programs for employees are vision and dental insurance.

Dental Insurance for Children

While vision and dental insurance for adults is not a requirement of the Affordable Care Act, dental benefits for children is a required benefit offer under all plans that qualify as “minimum essential coverage.”

This means that all children under the age of 19 enrolled in individual, family, and small group health insurance plans must be offered basic and preventive care for vision.

If this all seems complicated, a licensed insurance agent can help you understand the options that are best for you and your family. Our Phoenix Captive Solutions staff are always more than willing to help.

This article was written by Phoenix Captive Solutions C.F.O. Blake Coats, any views or opinions do not necessarily reflect the opinions of either Phoenix Captive Solutions LLC, or any associated entities.  

Feel free to write to Blake at blake.coats@phoenixcaptive.com