Did your health plan change this year from PPO to EPO? It happened here in the Central Valley in California, especially if your insurance carrier was Anthem Blue Cross. So, one might ask what is the difference between a PPO plan and EPO plan and while we are at it, how about an HMO Plan?

The answer is very simple; a PPO Plan is a Preferred Provider Organization and unlike the name may imply, the name refers to the plan not the insurance company, where it is a Preferred Provider Organizations (PPOs) cover care provided both inside and outside the plan’s provider network. Members typically pay a higher percentage of the cost for out-of-network care, in simple terms, it means, you can see your doctor weather he is in the Company’s network or not, but if he is not, your co-payment will be higher.

An EPO Plan stands for Exclusive Provider Organizations (EPOs) are a lot like HMOs: They generally don’t cover care outside the plan’s provider network. Members, however, may not need a referral to see a specialist.

HMO Plan stands for Health Maintenance Organization where a member can only see a doctor in the plan network and before you can see a specialist you must obtain a referral from your primary care physician (PCP).

In some cases, companies may offer all three plans, EPO, PPO and HMO or HMO and PPO or any combination they choose. It is important to review your plan network and documents as it might affect your co-payments next time you see your doctor.


What does it mean to be on Medicare under the age of 65

Medicare is health insurance program established by the US Government for people 65 years or older or people with disabilities.

If a person qualifies for Medicare and the person is younger than 65 years of age that usually means this person is on some kind of disability approved by the Social Security Administration. A person would have a 2 year wait period while on disability before they would be automatically enrolled in Medicare Part A and B. In simple terms Part A would pay for hospitals and part B would pay for doctor visits. A premium for part A may or may not be charged, however, everyone pays for part B in some cases a person might also be automatically enrolled in part D for prescription coverage.

Now looking at Medicare in simple terms, it is an 80%-20% plan. So for $100,000 hospital stay, Medicare would pay $80,000 and the member would pay $20,000 unlike the traditional health plans Medicare has NO maximum out of pocket, which means if a person had that hospital stay in January; he would owe $20,000. If there is a 2nd or 3rd similar hospital stays in the same calendars year, that person would still owe an additional $20,000 or $40,000 whatever that 20% is. Therefore, Medicare Beneficiaries wither they are 65 years or younger would have a choice between a Medicare Advantage Plan or a Medicare supplement Plan to cover that 20% gap that Medicare does not cover.

Choosing a Medicare advantage plan might be cost effective but a member would be restricted by the plan terms, conditions and the plan’s network of doctors. In many cases people would be forced to change their primary care doctor and lose a long established relationship with their provider. In other cases, one can chose a Medicare supplement because they are less restrictive and have no plan networks. However, if you are on disability, and under 65, the insurance companies know that you are sick and most likely will cost them more money. In some states, insurance companies do not even offer Medicare Supplement Plans to people with disabilities. Luckily for us here in California, the insurance companies are required to offer the supplement plans for everyone who qualifies for Medicare. However, they are free to charge whatever they want.

Let us look at an example. A 65 year old male would pay anywhere between $124.64-$242.77 monthly for plan F where a 56 year old male in the same zip code would pay anywhere between $254.67-$858.00 for the same plan with the same companies.

Of course, no one plans on being disabled, but one should plan just in case, remember, in California, in 2018. If you are married and your spouse is working and you become disabled, if your spouse makes $1,867.66 or more per month in gross income, then you would not qualify for Medi-Cal, and if you do not qualify for Medical to cover that 20% that Medicare does not cover, you might be forced to buy a supplement policy to cover the 20% or risk losing everything you own in a case of hospital stay or an un-expected surgery.

How do I plan for disability you might ask? You buy private disability insurance; it would normally cost 1-2% of your annual income and will provide the extra money needed for the additional unplanned expenses.

Suppose you are married and as a household you make 60,000 a year and you make half of that which is $2,500 and you become disabled. After the Social Security Administration gives you the run around they end up giving you $800 a month, you still do not qualify for Medi-Cal or any cash aid from the county. Now the disability insurance will come very handy because it will bring up your income to approximately 75% of what you used to earn to $1,875 vs. only $800. Then if you are forced to buy a Medicare supplement at double the rates things would not be as bad.

And yes, it would be wise to buy Disability insurance up to age 65, because even if you are employed and covered by the State Disability Insurance (SDI) that only lasts for a maximum of 13 weeks. So any situation beyond 13 weeks, you are at the mercy of the Social Security Administration.


My Personal Story with Social Security Disability

My Personal Experience with Social Security Disability.. In 2009 I was diagnosed with a blood condition that would cause excessive bleeding; I Simply had no platelets to make any clots.

And since I was self-employed, I had no state disability insurance which would have only lasted for 13 weeks anyways. So I looked up the social security guidelines and sure enough my condition was listed and I had 12 months of medical records documenting the condition. So, I applied for Social Security Disability Benefits … I was denied!!

Latter on I found out that they deny everyone or almost everyone on the first attempt especially when you are younger because they would have to pay until 65 or retirement age.. So, I appealed their decision and the appeal was also denied. At this point, I had been without income for over a year, I almost lost my house, luckily my car was paid off and my only way to survive was living on government and family assistance which was not fun at all.

So, I hired a law firm in Chicago and had to take the case all the way to a Federal Judge who finally approved my case and forced the Social Security Administration to pay, however my attorney took 25% of all the back pay that was due to me.

When it was all said and done.. it took 18 months before I saw any money from the Social Security Administration and what did I get? $1,100 a month… to pay for mortgage, electrify, gas, insurance, food, clothing…etc

So, if you do not have disability insurance coverage and you are self-employed. We need to talk.. even if you are employed and have state disability coverage it will only last for 13 weeks… that is it …we still need to talk .. 3 out of 10 people will suffer a disabling condition that is what the numbers say..

P.S.. This is my actual Medicare Card!! oh.. and I have not mentioned what it means if you have Medicare before you turn 65 … it is a whole different ball game!!

The moral of the story, if you do not secure your income and your pay check with disability insurance , the Government does not have your back, I found out the hard way.

Now I am back to work as an Insurance counselor doing what I love the most and I would like to help you get the right disability coverage. Schedule an appointment below and let us talk.