South Carolina Department of Insurance

State insurance regulation of health insurance covers an estimated 77 million Americans, roughly three out of five (62 percent) of those with private coverage. The health insurance regulatory structure in the U.S. is as follows:

State regulation. Some employer or employee groups purchase health insurance coverage from an insurance company. Others may purchase group health coverage from a health maintenance organization. Both are called fully insured health benefit plans. Insurers of such plans are regulated by state insurance commissions.

Federal regulation. Some employer or employee groups, however, provide what are called self-funded health benefit plans. This means your employer or employee group may set aside funds and employee premiums each month to pay health coverage claims submitted to the plan. Very large employers (500 or more employees) generally have Employee Medical Plans of this type. If the plan is self-funded and offered by a private sector employer or bona fide union, the designated regulatory authority is the U.S. Department of Labor's Pension and Welfare Benefits Administration. States are not permitted to regulate most valid self-funded plans authorized by Congress under terms of the Employee Retirement Income Security Act (ERISA). In most cases, this means: (1) state insurance departments have no authority to investigate complaints that involve valid single-employer or union-sponsored self-funded ERISA plans; (2) certain other group health plans provided by governments, churches, some school districts and out-of-state Blue Cross organizations also are exempt from most state regulations; and (3) state laws requiring specific benefits in health care plans seldom apply to valid self-funded ERISA plans.

UNDERSTANDING TYPES OF HEALTH INSURANCE

Each year, fewer and fewer Americans are covered under traditional fee-for-service health insurance plans, in which insured individuals go to a doctor of their choosing and then submit health insurance claims. Today, more and more Americans are covered by one of the following arrangements:

Health Maintenance Organization (HMO). An HMO provides health services through a network of doctors, hospitals, laboratories, etc. The health care providers may either be HMO employees or have some other contract arrangement with the HMO. HMO plans pay providers a monthly set amount (a capitation fee) regardless of the amount of services performed. When you enroll in an HMO, you choose one of the doctors as your primary care physician (PCP) to manage all of your health care. Whenever you need health care, you first consult your primary care physician. Your PCP may refer you to an HMO-approved specialist.

Preferred Provider Organization (PPO). A PPO is a group of doctors, hospitals, and other health care providers (preferred providers) who have agreed to provide services to members of a health plan for discounted fees. Some employers combine the PPO with a traditional major medical plan so you can use providers who are not on the PPO's preferred list. But to encourage you to use a provider who is on the PPO list, you will usually have lower out-of-pocket expenses than if you use a provider who is not on the list.

Point of Service Plans. These plans are essentially HMOs that allow members to use services provided outside of the network without prior approval from a network doctor. Point of service plans offer lower deductibles and no coinsurance for visits to doctors inside the network. Visits outside the network normally require the payment of deductibles and coinsurance the same as a standard insurance policy.

CHECKING OUT A HEALTH INSURANCE PROVIDER

Before you buy health coverage, find out about the company selling the plan. Here are factors to consider:

Customer Service. Find out how the company services its policyholders. Does the company have a toll-free customer service number?

Complaint History. Has the company had an unusually high number of consumer complaints?

Licensing Status. Call your state insurance department to find out if the insurance company is licensed to do business in your state.

Cost. Premiums for health insurance will vary greatly because there are no standard plans. When you look at bids from several companies, you will also need to look carefully at the benefits offered. Also, keep in mind that the actual cost for your health coverage will be determined after you submit information about your health.

Financial Stability. Financial stability helps ensure that a company can pay its claims. Your state insurance department establishes requirements that each company must follow and continually monitors the financial stability of insurance companies operating in the state. Independent organizations also rate the financial stability of insurance companies. Keep in mind that these ratings are opinions only and do not guarantee that a company is financially sound. Your public library may also have published ratings from these sources.

QUESTIONS TO ASK WHEN SHOPPING FOR HEALTH INSURANCE

About Coverage

1. What does the plan pay for?

2. What does the plan not pay for/exclude?

3. What are the limits on pre-existing medical conditions? Will the plan pay for preventive care, immunizations, well-baby care, substance abuse, organ transplants, vision care, dental care, infertility treatment, durable medical equipment, or chiropractic care?

4. Will the plan pay for prescriptions?

5. Does the plan have mental health benefits?

6. Will the plan pay for long-term physical therapy?

About Premiums

1. Do rates increase as you age?

2. How often can rates be changed?

3. How much do you have to pay when you receive health care services (co-payments and deductibles)?

4. Are there any limits on how much you must pay for health care services you receive (out-of-pocket maximums)?

5. Are there any limits on the number of times you may receive a service (lifetime maximums or annual benefit caps)?

About Customer Service

1. Has the company had an unusually high number of consumer complaints?

2. What happens when you call the company's consumer complaint number?

3. How long does it take to reach a real person?

HOW TO MAKE A HEALTH INSURANCE CLAIM/DISPUTE DENIALS

Things to do before you file a claim:

Review your policy or employee booklet carefully to be sure the service in question is covered.

Follow any managed care rules, including pre-certification requirements and use of network providers.

Give claim forms to the provider, with your policy number and other identifying information.

How to submit claim properly:

Find out if your provider submits the claim for you or if you need to do it. If you need to do it, review the information to be sure it is complete and correct.

File it as soon as you get the bill from the provider.

Send it to the right address.

Keep a copy for your reference.

Allow reasonable time for company to process your claim. The company needs to inform you if it needs any additional information to complete the claim. Sometimes, it will request additional information directly from the providers or return the claim form to you to get more information. After the company has all the information it needs, it has a certain number of working days to process your claim. The company must send you an explanation of benefits that explains its decision.

If your claim is paid:

If you assigned benefits to the provider, the benefit check will be sent directly to the provider.

You will pay any deductibles and co-insurance.

If you did not assign the benefits, the check will come to you and you will need to pay your providers for the entire amount.

If your claim is denied:

The reason for denial should be stated on your explanation of benefits. If you disagree with the basis stated for denial, check your policy or employee booklet for the company's appeal procedures.

The company should be able to answer procedural questions about appeals over the phone.

Your appeal should be in writing and may require information from your doctor.

Filing a consumer complaint:

If you've tried unsuccessfully to resolve a claim problem with your company or agent, contact your state insurance commission. Very often, companies will resolve disputes after the agency intervenes on a consumer's behalf. If it becomes necessary to file a written complaint with the state insurance department, please submit the form below.

Comsumer Complaint Form

WHAT IF YOU AREN'T PROTECTED BY YOUR STATE?

If the health plan is self-funded and offered by a private sector employer or bona fide union, take unresolved complaints to the U.S. Department of Labor (DOL) Pension and Welfare Benefits Administration (Toll Free 866.275.7922). The DOL does not interpret provisions of any particular health benefit plan or require employers to pay claims, but may investigate your complaint. In certain disputes, the DOL suggests personal legal advice may be your only option.

If the plan is self-funded but offered through a government or church employer, follow the appeals procedures outlined in your benefit booklet and other plan documents. In most cases ultimate responsibility for resolving disputes rests with the governing body of the employer sponsoring the plan, such as a school board.

If you have a disability, you may have certain protections available under the Americans with Disabilities Act (ADA) if your self-funded coverage is dropped or limited. You can reach the ADA Technical Assistance Center at 1.800.949.4232 or the U.S. Department of Justice at 1.800.514.0301 (voice) or 1.800.514.0383 (TDD).

WHAT IF YOU ARE A SOUTH CAROLINA STATE EMPLOYEE

The South Carolina State Employee's Health Plan (medical, dental and disability coverage) comes under the jurisdiction of the South Carolina State Employee Insurance Program.

State Employee Health Insurance Info

WHAT IF YOU AREN'T ABLE TO FIND AN INSURER THAT WILL UNDERWRITE YOUR HEALTH COVERAGE

South Carolina Health Insurance Pool

The South Carolina Health Insurance Pool is a State Health Plan designed to provide coverage for those that either do not have or have lost medical coverage at no fault of their own and are uninsurable.

800-868-2500 or 803-788-0500 ext. 46401

ABOUT THE SOUTH CAROLINA DEPARTMENT OF INSURANCE

South Carolina Department of Insurance
Attn: Consumer Service Department
PO Box 100105
Columbia, SC 29202-3105
Ph: 1-800-768-3467 or (803)-737-6180
Fax: (803) 737-6154

COMPARISON OF DIFFERENT TYPES OF HEALTH INSURANCE COVERAGE

The table presents general rules that may not apply to your insurer. Be sure to check with your insurer or employer to verify how your health care coverage works.

Description	Managed Care In general, managed care plans make arrangements with particular doctors, hospitals and other providers to deliver services. These providers make up a plan's "network."			Fee-for-Service You and the insurer each pay for part of the costs for health care services that you receive.
Description	HMO A health insurer that directly contracts with or employs a network of doctors, hospitals and other types of providers.	POS Combines an HMO with the flexibility of an out-of-network option. You can use providers in the plan's network or go outside of the network.	PPO Most similar to traditional fee-for service coverage except has a network. When you use a provider inthe network, your costs are lower and more services are covered.
What is your choice of doctors and hospitals?	You must get care from providers in the network.	You may use in-network or out-of-network providers. When you go out-of-network, you will usually pay more and fewerservices are covered.	You may use in-network orout-of-network providers. When you go out-of- network, you will usually pay more.	You have an unlimited choice of doctors and hospitals.
How do you get specialty care?	You need a referral to go to a specialist who is also in the network.	You need a referral to a network specialist to receive in-network coverage. You can go to a specialist who is out-of-network without a referral.	You do not usually need a referral to go to a specialist; however, certain services may require pre-authorization from your health insurer.	You do not need a referral.
How do you pay for servicesin-network?	There is no deductible. You pay a copayment (usually between $5and $25) for a doctor's office visit and most services.	If you use a provider in thenetwork, there is no deductible, but you pay a copayment.	You pay a portion of the cost, typically 20-30%, known as coinsurance. Network providers agreenot to charge more than the insurer's allowable charge. Some PPOs require you to pay a copayment instead of coinsurance. Some PPOs may require members to satisfy an annual deductible before they cover services.	Your doctor or hospital sends a bill for services provided. After you pay your deductible, you are responsible for a portion of the costs, typically 20-30%, known as coinsurance. Most insurers set an allowable reimbursement for a service. For example, if your doctor charges $125 for a visit and your insurance only allows $100, you may be responsible for the $25 difference in addition to your deductible and coinsurance.
How do you pay for servicesout-of-network?	Out-of-network services are typically not covered.	If you use an out-of-networkprovider, then you are reimbursed for services as you would be with fee-for-service insurance.	If you use an out-of-networkprovider, then you are reimbursed for services as you would be with fee-for-service insurance.

HOW TO CHOOSE A HEALTH INSURER

Step 1: Determine the type of health coverage that best fits your needs and budget

Use the Comparison of Different Types of Health Insurance Coverage table on the previous page to familiarize yourself with the different types of plans available including health maintenance organizations (HMOs), point of service (POS) plans, preferred provider organizations (PPOs) and fee-for-service.

Step 2: Compare the costs

Compare the monthly premium as well as the out-of-pocket expenses such as deductibles, coinsurance and co-payments of different insurance plans.

Step 3: Decide which health insurers offer the benefits you want

Think about your family's health care needs and choose an insurer that best covers the services you need most. Try to estimate your needs for prescription drugs, well-child care and mental health services.

Step 4: If you want a managed care plan, determine whether your preferred doctors and hospitals (also known as "providers") are in the plan's network

In a managed care plan, you typically receive care from a network of providers. To confirm the availability of your preferred doctor and hospital, check the health plan's provider directory, or call your provider's office. Check to see if there are any restrictions to whom and where your primary care physician (PCP) can make referrals if you anticipate needing a specialist. If you choose a doctor in a medical group as your PCP, you may be limited to specialists and hospitals affiliated with that medical group.

Step 5: See which insurers performed best in this Guide

Using the information you gathered based on the steps above, choose the health insurers that best fit your family's needs. Use this Guide to Compare their performance. Consider all the results that contribute to the insurer's performance. Small differences in performance measures may not be significant

Step 6: Integrate the information you have learned from this Guide

Eliminate the insurers that do not meet your basic requirements. Then, choose the insurer that performs best on the features most important to you.

INSURANCE TERMS

Health Maintenance Organization (HMO) Plan: A type of coverage that provides comprehensive health services to members in return for a monthly premium and co-payment. In an HMO plan, members are assigned to a primary care physician (PCP) who coordinates each assigned member's care. The PCP refers patients to specialists and provider services as needed. Although many HMOs require their members go to the doctors and other providers in the HMO provider network, some HMO plans offer the option to go out-of-network (for example in a POS plan). HMO plans often require members receive a referral from their PCP before seeing a specialist. (See primary care physician and point of service plan.)

Non-profit Indemnity Insurers: Non-profit indemnity insurers employ managed care strategies but offer a more traditional approach to coverage than HMOs. Non-profit indemnity insurers reimburse policyholders, physicians and hospitals. Non-profit policyholders are subject to deductibles and out-of-pocket costs that are considerably higher than those required by HMOs unless they use a preferred provider network. Participating Provider: A health care provider (e.g., doctor, psychologist, hospital) who agrees to accept the terms, conditions and allowable payments of an insurer.

Point of Service (POS) Plan: A type of managed care coverage that allows members to choose to receive services either from participating HMO providers or from providers outside the HMO's network. Members pay less for in-network care. For out-of-network care, members usually pay a deductible and coinsurance.

Preferred Provider Organization (PPO): A type of managed care coverage based on a network of doctors and hospitals that provides care to an enrolled population at a prearranged discounted rate. PPO members usually pay more when they receive care outside the PPO network.

Primary Care Physician (PCP): An internist, pediatrician, family physician, general practitioner, or in some instances an obstetrician/gynecologist. If you are enrolled in an HMO, you usually must choose a PCP from a list of participating providers. The PCP coordinates your care and makes referrals to specialists as needed.

Referral: Authorization from your primary care physician or health insurer to see a specialist or receive a special test or procedure. HMOs often require that you obtain a referral for most specialty care. It is important to know what your health insurer's rules and procedures are for referrals.

Self-Insured Health Plan: In this type of plan, an employer will pay for employees' health care costs out of a fund that the company has set aside for medical expenses. Employers may contract with an outside organization, often an insurance company, to administer the plan. Under a federal statue known as ERISA, the U.S. Department of Labor has authority over self-insured employer health plans. Therefore, South Carolina's consumer protection and insurance laws do not apply.

Specialist: A doctor who has been specially trained in and practices a specific type of medicine other than primary care (e.g., cardiologists, dermatologists, gastroenterologists). If you are enrolled in an HMO, you usually will need a referral from your primary care physician to see a specialist.

Utilization Review (UR) Appeal: A UR Appeal occurs when a consumer asks an insurer to reconsider its refusal to pay for a medical service the insurer considers experimental, investigational, or not medically necessary. (See first-level internal appeal process.)

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South Carolina
Department of Insurance
1201 Main Street
Suite 1000
Columbia, SC 29201
Phone: 803-737-6160
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