Before you go to the doctor for any reason or face the possible need for a medical procedure or treatment, one of your first questions is probably “Will my health insurance cover this?”
Answering that question isn’t always easy. Health insurance is complicated and the jargon used can seem like gobbledygook.
Keep in mind that even if something is covered, most likely you’ll still have to pay part of the cost. Very few things are covered 100%. Most plans have “cost shares” – things like deductibles, co-pays and co-insurance (more about these terms below). The amount you must pay for medical care varies from plan to plan. Generally, the lower your monthly bill for your policy (called the premium), the higher your cost shares will be. If you bought a more expensive plan, your cost shares will most likely be lower.
Here are some tips to help you figure out what will be covered by your health plan and how much you’ll have to pay out of your own pocket.
Read your plan’s coverage paperwork
The best place to start is your health plan’s “coverage documents” – the legal contracts that spell out what is covered and what is not. There are two documents: a short and simple summary and a longer and more detailed coverage agreement. You’ll receive these documents when you shop for or purchase health insurance. You can usually find them online, but you can also request printed copies from your insurance company. You can also request these documents in languages other than English.
Your Summary of Benefits and Coverage
Federal law requires that insurance companies and job-based plans provide you with a “Summary of Benefits and Coverage” written in plain, easy-to-understand, everyday language. This also includes a standard glossary explaining terms used in health insurance and medical care.
This is a high-level summary. It doesn’t say how a specific exam, test, treatment or procedure will be covered. Instead, it lists general services:
- A visit to your primary care doctor to treat in injury or illness
- A visit to a specialist
- Preventive care, such as common screenings and immunizations (shots)
- A visit to a chiropractor or acupuncturist
- Tests such as x-rays, blood work
- Imaging such as CT/PET scans and MRIs
- Prescription drugs
- Outpatient surgery (no overnight stay)
- Urgent care and emergency room visits
- Hospital stays (overnight or longer)
- Mental health care
- Pregnancy and delivery care
- Home health care, rehab services such as physical or occupational therapy, medical equipment
The summary also lists some services your health plan explicitly does not cover!
Coverage agreement
This document goes by variety of names (certificate of coverage, evidence of coverage, benefits booklet, etc.) It’s much more detailed than the summary of benefits, and is often several hundred pages long!
If you’re considering an expensive treatment or procedure, you should check this out. There’s usually a table of contents at the beginning, listing the various kinds of services. An easy way to find the service you’re looking for is to read this document online and use your computer’s search functions to find the words that describe the service. For example, if you wonder whether an eye exam or glasses or contacts will be covered, you might search for those words or for “vision.”
The coverage agreement will explain what’s covered and what your share of the cost will be. For some kinds of services, there may be limits on how often you can get the treatment (for example, one eye exam per year, 12 acupuncture treatments a year, 25 physical therapy visits a year). The agreement will also call out services that are not covered or that are covered only in certain circumstances.
Call your health insurance company’s customer service department
If you don’t have your coverage documents or don’t understand them, you may want to call the customer service department. They will be able to explain your coverage in plain, simple language and will be able to answer your questions about a specific service.
It’s a good idea to take notes, including the date of the call and the full name of the person you spoke with.
Figuring out how much you will have to pay
As mentioned above, even if your health insurance covers a medical service, you’ll probably have to pay part of the cost. Very few things are covered 100 percent. To understand how much you may have to pay, you need to learn some health insurance terminology. See the examples below to understand how these cost shares work.
Probably the most important term to understand is your “deductible.” The amount of money you must pay out of your own pocket before your health insurance plan kicks in. For example, if your deductible is $1,000, you’ll have to pay for all your medical services until you’ve paid a total of $1,000. Nowadays, many plans have high deductibles--$3,000, $5,000, $7,000 or more. For some services, the deductible does not apply; your health insurance will pay the entire cost.
Another cost you may have to pay is a “co-pay.” A flat fee you pay, usually when you check in for a medical appointment. This is usually a relatively small amount, such as $20 to $30 for an office visit or $100 for an emergency room visit.
A third cost you may have to pay is “co-insurance.” This is a percentage of the cost of the service, for example 20% or 30%.
Finally, most plans have an “out-of-pocket maximum.” This is the most amount of money you’ll have to pay out of your own pocket for the entire year. After you’ve paid this amount, your insurance pays all costs. (Of course, there may be exceptions to this.)
Exact cost estimates are hard to come by!
Before you have a major medical service such as surgery, you may want to get an estimate of the total cost of the service and how much of that total cost you’ll pay. Many things go into the cost of medical care and it’s usually hard to get an exact cost in advance. In major or complex services, there may be unexpected things that come up that affect the cost. Talk to your doctor and your health insurance company about the costs before committing to expensive procedures.
A couple of examples
(Note: All costs mentioned here are examples only. They’re not necessarily the actual costs of these medical services.)
Let’s say your health insurance plan has a $2,500 deductible, a $25 co-pay for office visits, a $50 co-pay for office visits with specialists, 30% co-insurance for surgery, and a $7,150 out-of-pocket maximum.
Office visit for an earache:
Let’s say the office visit costs $100. This is your first and only medical service for the year. Because you haven’t met your deductible, you’ll pay the full cost of this visit--$100.
If you’d already had several medical services during the year and had already paid $2,500, your cost would be $25, for the office visit co-pay.
Knee surgery:
Let’s say the cost of this surgery is $10,000. Before deciding you need the surgery, you had an office visit ($100), a visit with an orthopedic specialist ($300), and an MRI ($800). So you’ve already paid $1,200 but haven’t met your $2,500 deductible.
You’ll owe the remaining $1,300 toward your deductible ($2,500 minus $1,200), plus the 30% surgery co-insurance of $3,000 (30% of $10,000). So the amount you’ll pay for this knee surgery is $4,300 ($1,300 plus $3,000). Your total cost, including the two office visits, the MRI and the surgery, is $5,500 ($100 plus $300 plus $800 plus $1,300 plus $3,000).
Under this example, you’ll still have to pay $1,650 for other medical services during the year, until you reach your $7,150 out-of-pocket maximum.
“Free” preventive care
An important exception to your costs is preventive care. For most preventive care, including an annual physical exam or “wellness visit,” routine screenings (heart rate, blood pressure) and immunizations (measles, mumps, tetanus and other shots), your health insurance will pay 100% of the costs. You won’t have to pay your deductible, co-pays or co-insurance. But some things that your doctor may recommend at this visit aren’t preventive care, so you may end up having to pay for some of the tests you get. You can always ask your doctor before you have a test whether it’s part of “preventive care.”
Appealing coverage decisions
Finally, if your health insurance company refuses to pay for a medical service or doesn’t pay as much as you think they should pay, you can appeal and ask them to reconsider the decision. The law requires them to tell you why they didn’t cover the service.
If you still disagree, you can appeal the decision and have it reviewed by an outside party. Your insurance company is required to tell you how to dispute or appeal a coverage decision.
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