COBRA & Other Parts of The Health Insurance Maze
Part 1: The Basic Tools, Chapter 1: The Health Insurance Maze Page 2
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COBRA -- a set of federal rules designed to allow eligible individuals to extend health insurance coverage under certain conditions -- was passed as part of the Congressional Omnibus Budget Reconciliation Act, and is supervised through both the Pension and Welfare Benefits Administration of the United States Department of Labor and through the United States Public Health Service. The Department of Labor is responsible for COBRA issues related to health insurance programs offered by private insurers. The United States Public Health Service is responsible for COBRA issues related to health insurance programs sponsored by state or municipal government agencies.
In addition to these federal programs, state governments now offer a number of health insurance programs, as well. For example, some states currently offer programs to subsidize the cost of prescription medications for the elderly and for people with disabilities, to provide medical equipment for children, and to provide low-cost health insurance for children or adults whose incomes fall below the poverty line. Each state has its own set of regulations to govern the operation of each of those programs. In many states, the regulations are implemented through the state Department of Insurance or through special state insurance boards. In other states, the state Department of Health is also involved in regulating health insurance issues.
The current private health insurance system is just as complex. There are now more than 1,500 insurance companies and managed care companies in the United States. A single insurance company may offer several types of health insurance plans, including traditional individual and group plans and individual and group managed care plans. Each type of insurance plan may have its own set of rules.
Furthermore, each plan may be subdivided into a series of different benefit provisions. For example, many traditional group health insurance plans have separate benefit provisions for hospitalization, surgery, basic benefits, major medical, durable medical equipment, and for the treatment of mental or emotional illnesses. (See Chapter 2 or the glossary for an explanation of each of these terms.)
Each of those benefit provisions may follow separate rules, and each benefit provision may have a different deductible. Each of the traditional individual and group health insurance plans is also subject to laws and regulations passed by both the federal government and by the various states in which the plan operates.
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