Getting Insurance on Your Own—My Run Down
Editor’s Note: People who take insulin require consistently affordable and predictable sources of insulin at all times. If you or a loved one are struggling to afford or access insulin, you can build custom plans based on your personal circumstances through our tool, GetInsulin.org.
This year, I am facing my scary 26th birthday: the one where I can no longer remain a dependent on my parents’ health insurance plan and must select my own plan from the options available to me. I am lucky at this point in my life because I have some options for insurance. But I am also unlucky, as we all have a very expensive pre-existing condition called type 1 diabetes.
I have been stressing about my 26th birthday for years now. Testing costs at least $10 each day, insulin costs are rising and I use an insulin pump with continuous glucose monitor (CGM). It is a lot of stuff.
We need a lot of stuff to stay alive, and the stuff requires paperwork, and navigating that crazy system is an extra challenge for all Americans, but especially those of us with immediate daily medical concerns. Managing type 1 diabetes (T1D) is a daily job, and translating health insurance plans can be another part-time job on top of it all.
I figured out my next move through a ton of research and many conversations with my insurance representative. Here is what I learned:
Supply list
I made sure I had a complete list of all my prescriptions and supplies. Insulin, test strips, lancets and glucagon (both nasal and injectable) tend to fall under prescription plans. Insulin pumps, infusion sets, reservoirs and CGMs are in a category called “durable medical equipment,” or, DME for short. DME is typically under the medical plan. If the plans you are looking at do not offer coverage for any of the things that you need (and lower premium plans may not cover DME), you will need to consider paying for those things or choosing a different plan.
Formularies
Prescriptions are usually in what the companies call “formularies” these days, which is basically a list of things they cover. For instance, since Humalog and Novolog are similar fast-acting insulins, a plan may cover one or the other. You should ask to see the formulary and look up all of your prescriptions. If the medications you use are not there, ask if they will cover it with a “letter of medical necessity.” You will likely have to pay the “non-formulary” price, but that is still better than the full expense.
Letter of Medical Necessity
Also known as “prior authorization.” This is a document from your physician stating that you need this therapy. It is needed in most cases with insulin pumps, CGMs and the accompanying supplies. When you are changing plans either from a qualifying event (like changing jobs or turning 26 or graduating from your student plan), make sure you tell your doctor so they can get the paperwork in motion and you have no delays in getting the things you need.
Network
A network is the set of doctors the insurance company will pay for you to see. When you change plans, you can usually search to see if your current doctors are in-network. If they aren’t, depending on your relationship with them, you could see if they can make a recommendation for who else to see in your town if you live in a city with options.
Premium
This is the amount you pay every month in order to be in the plan. There tends to be an inverse relationship between premium and deductible, so the higher the premium, the lower the deductible. Pay attention to both of these numbers to figure out your costs. You will pay your premium every month whether or not you use the plan or meet your out-of-pocket limit.
Deductible
The deductible is what you pay before the plan covers everything. If you have a high-deductible plan or an HSA plan, you will pay this amount before the plan covers anything. If you have a PPO plan, you will pay your portion of the cost of care until you meet your deductible. After meeting your deductible, your plan will cover everything. Prescriptions do not always count toward the deductible.
Out-of-pocket limit
This is the maximum amount you will pay for medical and prescription. It is more than your deductible, but once you pay this amount you will only pay your premium for the rest of the year. If you meet your out-of-pocket limit through your prescription plan before you meet the deductible through the medical plan, you will not have to meet the deductible on top of it.
Coinsurance
This is the percentage of the cost that you share between the plan and yourself. DME is usually listed by coinsurance percentages (e.g. 80 percent covered, 20 percent from you).
- Co-pay. This is a flat fee that you pay for certain services. Physician visits usually have a co-payment.
- HSA. Health Savings Account. For HSA plans, you can set aside pre-tax money for your healthcare. The HSA bank account is tied to you and can roll over year to year, so if you set aside more money than you use in the plan year or calendar year, it will roll over to the next year. These plans tend to have lower premiums and higher deductibles.
- Plan year vs. Calendar year. Your plan might run on a 12-month cycle that is not the January-December calendar. For instance, my workplace has a plan year that is the same as the July 1-June 30 fiscal year. You may want to ask which benefits run on a calendar year or a plan year if they differ.
- PPO. Preferred Provider Organization. These plans offer co-payments and coinsurance without meeting the deductible first. You, the user, do not bear the brunt of the costs of your care upfront. They tend to have higher premiums and lower deductibles.
- FSA. Flexible Savings Account. This is a pre-tax account for people on PPO plans. The FSA differs from the HSA in that it has a “use it or lose it” policy. If you set aside money in your FSA that you do not spend in the designated 12-month period, it is gone. However, you can use this account for health-related things beyond your appointments and supplies, like for glasses and contact lenses.
There is so much terminology to learn and so many things to consider! The way the math works is that you add up 12 months of premium payments and the out of pocket limit, and that is the most you will pay for healthcare in that year. Because of the cost of diabetes supplies, I know I will meet that out-of-pocket limit. The big decision for those of us with T1D is if you want to pay that cost upfront in an HSA plan or if you want to share that cost over a period of time with a PPO plan.
I hope this guide helps you figure out your healthcare costs and what kind of coverage to choose! Access to medications and supplies is often difficult, and being stuck with an insurance plan that does not actually help you can make things even more difficult. If you have specific questions, please please please call your insurance company for clarification. And remember, you are not alone in this disease. Ever.
