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QUESTION 1: What is individual health insurance?
ANSWER: Individual health insurance is coverage that a person buys independently. It can be sold to a single individual, to a parent and dependent children, or to a family. Nationally, the majority of Americans get their health insurance coverage through an employer or through a government program, but a growing percentage of the population purchases private health coverage on an individual basis. In Maine, the Department of Insurance regulates how individual policies may be marketed and sold within the state.
QUESTION 2: How do I buy individual health insurance coverage?
ANSWER: In Maine, individual health insurance coverage can be purchased through licensed health insurance salespeople known as agents or brokers. These agents and brokers are trained in and understand the various insurance plans they represent, and they can help you find the coverage that best suits your individual needs. (To obtain a quote for health insurance from a Maine-licensed health insurance agent, submit a E-ZQuote.)
QUESTION 3: Is individual insurance different from group insurance?
ANSWER: Individual health insurance is very different than group health insurance, which is the type of insurance that is typically offered through a (large) employer. In Maine, the laws mandating what types of services must be included in individual policies are different than those required in group policies. Sometimes individual health insurance consumers will have the option to pay extra for coverage of additional services through optional insurance “riders.”
For individual health insurance consumers, because they do not have the benefit of an employer subsidizing a portion of their premium, the cost of coverage is often a major consideration. Consequently, the benefits included in individual policies are often simpler than in group plans, while the deductibles (the amount you have to pay before insurance benefits begin) and cost-sharing (the fees you pay directly to medical providers at the time of service) are typically higher than those in a group plan.
QUESTION 4: How are premium rates determined?
ANSWER: In Maine, when you apply for individual health insurance coverage, you are asked to provide very basic information about yourself and any family members to be covered. When determining rates, insurance companies use the applicant’s age, sex, smoker status and where they reside (determined by postal zip code). Past and present medical conditions and medications may be used to determine what policy design might be ideal but will in no way effect the premiums that an applicant is charged.
QUESTION 5: Are health insurance companies required to issue individual policies to anyone who applies in Maine regardless of medical condition?
ANSWER: Yes. Unlike in the neighboring states of New Hampshire and Rhode Island, where individual health insurance is "fully underwritten," health insurance in Maine is a "guaranteed issue" item. What this means is that an insurance company is in no way allowed to discriminate against an applicant due to any health conditions or medications they may be currently taking or have taken in the past. In most cases, the only time an applicant must wait for a policy to be issued is while the application is being processed, something that in most cases can be accomplished in a week or so.
QUESTION 6: Can I return my policy if I am not satisfied with it?
ANSWER: When a policy is issued to you, by law you have a "free look" period of no less than ten (10) days to review the policy and confirm that it meets your needs. If you are not satisfied with the policy, you may return it within the 10-day “free look” period and request a full refund of the premium (if any) paid when the application was submitted. To avoid any delay or confusion, if you decide you do not want the policy, you should return the policy directly to the company by certified mail within the "free look" period.
QUESTION 7: Can the insurance company require me to get an approval prior to receiving medical services?
ANSWER: Yes. Often individual medical policies will require pre-certification prior to a scheduled hospital stay or within a short period of time following an emergency admission. There may be other requirements or restrictions in your policy. Be sure you understand the requirements of your policy.
QUESTION 8: What is a “deductible” and how does it work?
ANSWER: A deductible is the amount of covered expenses you must pay before the insurance company will pay for any of the covered medical expenses. Be sure you understand exactly how the deductible works before buying any policy. There are a number of ways deductibles may be administered by the company:
- Some policies will apply the deductible to covered expenses on a per person, per calendar year basis. If the policy is a family policy, there is normally a maximum number of deductibles per family per year, and sometimes a single deductible for a common family accident.
- Some policies will apply the deductible per medical condition or cause. This type of deductible can cause a single individual to pay several separate deductibles in a calendar year. Policies with this type of deductible may not have a maximum number of deductibles to satisfy in a calendar year. These policies normally have a lower premium than those with a calendar year deductible, because the individual’s risk of multiple deductibles (and larger costs) is greater.
- Some policies apply the deductible for each hospital confinement separated by a specified number of days (usually 60 days).
QUESTION 9: How long does an insurance company have to pay my medical claims?
ANSWER: Once the company has received “due proof of loss,” they are allowed a “reasonable” period of time (no more than 30 days) within which to pay or deny a claim. If the claim is not paid within 30 days after they have all needed information, they must pay interest on the claim at the rate of 9% per annum.
QUESTION 10: What does my company mean when it says it will pay "usual and customary charges"?
ANSWER: "Usual and customary" refers to the fee charged by the providers in a given geographical area for a particular service. Insurance companies may subscribe to an independent service which periodically surveys providers in a given area, or they may use their own claims experience to establish usual and customary allowances. Most companies, in turn, pay claims based upon a percentile of the usual and customary fee schedule, and this limit is referred to as "reasonable and customary". For example, if your policy pays at the 70th percentile of usual and customary, that means they pay based upon the fee charged by 70% of the providers for that particular service within the geographical area. Consequently, if your policy includes a “reasonable and customary” provision and the doctor or hospital you use charges in excess of your policy’s “reasonable and customary” fee allowance, you may be required to make up the difference yourself (i.e. “out-of-pocket”), above and beyond any deductibles or co-insurance payments you have already made.
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