Health Insurance Coverage - Action Needed and Deadlines Apply

One way that health insurance plans control their costs is to influence access to providers. Providers include physicians, hospitals, laboratories, pharmacies, and other entities. Many insurance companies contract with a specified network of providers that has agreed to supply services to plan enrollees at more favorable pricing. If a provider is not in a plan’s network, the insurance company may not pay for the service(s) provided or may pay a smaller portion than it would for in-network care. This means the enrollee who goes outside of the network for care may be required to pay a much higher share of the cost.

If you have a plan through a parent, for example, and that plan’s network is in your hometown, you might not be able to get the care you need in the Stanford area, or you might incur much higher costs to get that care in the Stanford vicinity.

Under the Affordable Care Act, plans in the United States are required to offer a number of ‘essential health benefits’ which include:

• Ambulatory patient services (those you would typically receive outside of a hospital)
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance-use disorder services
• Preventive services (e.g., some immunizations) and chronic disease management
• Rehabilitative and habilitative services
• Some laboratory services
• Prescription drugs

For our international students, who might be considering coverage through a plan not based in the U.S., the question, ‘what does the plan cover in the U.S.?’ is extremely important.

As a general rule of thumb, the more you pay in premium up front, the less you will pay in the form of deductibles, copayments, and coinsurance when you access care. The less you pay in premium, the more you will pay when you access care.

The question for our students is pay a larger share now? Or, pay a larger share later?

Consider that anticipated costs at the time of service may discourage students from getting needed care.

The terms ‘out-of-pocket cost’ and ‘cost sharing’ refer to the portion of your medical expenses you are responsible for paying at the time you receive health care. Out-of-pocket costs are in addition to the monthly health insurance premium you pay.

The amount you pay each plan year before the insurance company starts paying its share of the costs. For example, if the deductible is $1,000, then you would be responsible for paying the first $1,000 in health care services you receive each year out of pocket, after which the insurance company would start paying its share.

A fixed, up front amount you pay each time you receive care when that care is subject to a copay. For example, a copay of $30 might be applicable for a physician visit, after which the insurance company picks up the rest. Plans with higher premiums generally have lower copays, and vice versa. Plans that do not have copays typically use other methods of cost sharing.

A percentage of the cost of your medical care. For example, you might pay $200 (20 percent) for an MRI that costs $1,000. Your insurance company will pay the other $800 (80 percent). Plans with higher premiums typically have lower coinsurance.

The most cost-sharing you will be responsible for in a year. It is the total of your deductible, copays, and coinsurance (but does not include your premiums). Once you hit this limit, the insurance company will pick up 100 percent of your covered costs for the remainder of the plan year. Most enrollees never reach the out-of-pocket limit but it can happen if a lot of costly treatment for a serious accident or illness is needed. Plans with higher premiums generally have lower out-of-pocket limits.

The terms ‘covered benefit’ and ‘covered’ are used regularly in the insurance industry, but can be confusing. A ‘covered benefit’ generally refers to a health service that is included (i.e., ‘covered’) under the premium for a given health insurance policy that is paid by, or on behalf of, the enrolled patient. ‘Covered’ means that some portion of the allowable (or ‘negotiated’) cost of a health service will be considered for payment by the insurance company. It does not mean that the service will be paid at 100%.

For example, in a plan under which urgent care is ‘covered,’ a copay might apply. The copay is an out-of-pocket expense for the patient. If the copay is $100, the patient has to pay this amount (usually at the time of service), and then the insurance plan ‘covers’ the rest of the allowed cost for the urgent care service.

In some instances, an insurance company might not pay anything toward a ‘covered benefit.’ For example, if a patient has not yet met an annual deductible of $1,000, and the cost of the covered health service provided is $400, the patient will need to pay the $400 (often at the time of service). What makes this service ‘covered’ is that its cost counts toward the annual deductible, so only $600 would remain to be paid by the patient for future services before the insurance company starts to pay its share.

Because no one can accurately predict what type of medical care might be needed in the future, and because unforeseen scenarios can crop up in the course of an academic career, Stanford University requires that every registered student carry adequate health insurance. This requirement can be met either through Cardinal Care, Stanford’s student health insurance plan, or through an alternative insurance plan that meets the Affordable Care Act’s Minimum Essential Coverage requirements.

The key is deciphering whether coverage you may already have, or are planning to purchase, will serve you well in the Stanford vicinity and/or wherever else you may be studying or traveling.

Cardinal Care has broad coverage that has worked well for our students in many diverse scenarios over time. Other ways in which the requirement for adequate health insurance coverage can be met are:

• Sponsored plan (U.S. government, foreign government, or embassy)
• U.S. employer provided group health plan
• Private / Individual plan purchased through Healthcare.gov
• Military / Tricare plan
• Medicare / Medi-Cal plan*

*If you select a Medi-Cal plan, opt for coverage in San Mateo or Santa Clara counties so you can get care, if you need it, while in the Stanford area.