Medical Insurance &
Public Benefits

Using Private Medical Insurance

If you have a child with special health care needs, be sure to:

  • Keep a copy of your policy and benefits information.
  • Pay attention to notices you receive about coverage changes.
  • Contact the insurance provider for explanations of anything in the policy you don't understand.
  • Understand the TYPE of policy you have. The three most common private insurance plans are:

    • Health Maintenance Organization (HMO):  The member selects a Primary Care Physician (PCP) from the provider network, who coordinates the patient's care, including referrals to specialists.  Otherwise, services will not be covered.
    • Point-of-Service Program (POS):  The member selects PCPs from a network, as in an HMO, but also can receive some insurance coverage for services from a non-network provider.
    • Preferred Provider Organization (PPO):  Members are not required to use a PCP and can select non-network providers for care. 
  • Verify with the insurer what is covered for your child with special healthcare needs. Explain your child's condition, the treatments that have been rendered to date, and what treatments may be needed in the future.

Consumer Safeguards Resulting from the Federal Health Care Reform Act of 2010

Before the Health Care Reform Act of 2010, many private health insurance providers required a waiting period before paying for services related to conditions diagnosed prior to the initial date of coverage (called a “pre-existing condition”).  A pre-existing condition is defined as a condition for which medical advice or treatment has been received within 90 days immediately prior to new insurance coverage.

Also, prior to the Health Care Reform Act of 2010, many private insurance policies included a “lifetime cap” on the maximum dollar amount of benefits that would be paid over the covered individual’s lifetime.

These practices have changed.  Under the Health Care Reform Act of 2010, waiting periods and lifetime caps are no longer permitted.

The following consumer safeguards are ensured by the Health Care Reform Act of 2010:

  • Insurers cannot deny coverage to people with medical problems or charge them more (in effect for children under 18; will go into effect for adults in 2014).
  • Women cannot be charged higher premiums (will go into effect in 2014).
  • Parents are able to keep children on their policies until age 26.
  • Policies cannot be cancelled because someone gets sick.
  • A new “high-risk pool” – state-funded coverage for adults who have been denied coverage because of a pre-existing health condition - offers coverage to uninsured people with medical problems until 2014 (see PA Fair Care for information). 

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) mandates that businesses that offer health insurance and have more than 20 employees continue to make coverage available at group rates for up to 18 months for employees who retire, quit, switch from full-time to part-time status, or are laid off.  The covered individual pays the full cost of insurance plus a two percent administration fee.

Coverage for Autism Assessment and Treatment

Until 2009, many private insurance providers did not cover services or treatments for children with autism spectrum disorders.  Under Pennsylvania’s Act 62 of 2009, certain employee group insurance plans are required to cover certain assessments and treatments. Act 62 also changed the way autism services are covered by Medical Assistance and the Children’s Health Insurance Program (CHIP).  (See information on Medical Assistance and CHIP in this section of the Guide.)

Act 62 requires group health insurance plans offered by companies with more than 50 employees to cover the cost of assessment and treatment of autism spectrum for children under the age of 21, up to $36,000 per year. Act 62 does not apply to policies that are considered “self-funded” or “self-insured. A fact sheet about PA Autism Insurance Act 62

Out-of-Pocket Medical Costs and Your Federal Taxes

Under current tax law, the Internal Revenue Service (IRS) permits many out-of-pocket medical and dental expenses to be deducted from your federal income tax return.  You are permitted to deduct the amount that exceeds 7.5 percent of your adjusted gross income.  To do so, you must itemize your deductions on Schedule A (Form 1040) and have receipts.

Examples of applicable expenses are insurance premiums, co-pays and deductibles, prescription drugs, mileage and parking for physician appointments, wheelchairs, hearing aids, eyeglasses, braces, and modifications to your home or vehicle to make them accessible.  In some cases, it still might be cost-effective for you to take your standard deduction as opposed to itemizing medical and dental costs.  Individuals who are legally blind are entitled to a higher standardized deduction.

For additional tax information, go to the following Internal Revenue Service links:

What To Do If You Have a Problem with Your Private Medical Insurance

The Pennsylvania Department of Health oversees private medical insurance complaints and grievances and makes sure insurance companies have approved systems to handle them.

Here's What To Do:

  1. Call your insurance provider’s member services department.

  2. If the customer service department does not offer a solution, write a letter or complete the special form explaining your complaint.  Be as specific as possible, including dates and the names of representatives you spoke with about the problem.   Describe the action needed to resolve your problem.  The insurer will review your complaint and inform you of its decision in writing.

  3. If you are not satisfied with the decision, you may request another review by the  grievance review committee, where you will have the opportunity to discuss your case in person.

  4. If you still are not satisfied with the decision, you may appeal to the Pennsylvania Department of Health.  Call 888-466-2787 to begin the process. The Department of Health will obtain the necessary information from your insurer and conduct a full review.

Insurers may resolve grievances differently if you are:

  • A federal employee or dependent enrolled in an HMO.
  • A Medicare or Medicaid recipient.
  • Employed by a business that is self-funded or self-insured.

If your problem is urgent and you think you need medical help quickly, call the insurance provider’s member services department and ask for assistance in filing an expedited grievance.  The Pennsylvania Department of Health has established special procedures and shortened time frames for these types of grievances.

Private insurers are not permitted to terminate a member's coverage without prior approval of the Pennsylvania Department of Health. Involuntary termination can be appealed.

(Source: Pennsylvania Department of Health)