Before going to the doctor for any reason or facing the possible need for a medical procedure or treatment, one of your first questions is probably “will my health insurance cover this?”
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answering that question is not always easy. Health insurance is complicated and the jargon used can seem like gibberish.
Keep in mind that even if something is covered, you will most likely have to pay part of the cost. very few things are 100% covered. Most plans have “cost sharing,” things like deductibles, copays, and coinsurance (more on these terms below). the amount you have to pay for health care varies from plan to plan. In general, the lower your monthly policy bill (called the premium), the higher your cost share. if you bought a more expensive plan, your cost sharing will most likely be lower.
Here are some tips to help you determine what your health plan will cover and how much you’ll have to pay out of pocket.
read your plan coverage documentation
The best place to start is your health plan’s “coverage documents”—the legal contracts that explain what’s covered and what’s not. There are two documents: a short, simple summary and a longer, more detailed coverage agreement. You will receive these documents when you shop for or buy health insurance. You can usually find them online, but you can also request paper 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 insurance companies and work-based plans to 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 healthcare.
This is a high level summary. it does not 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 an injury or illness
- a visit to a specialist
- preventive care, such as regular screening tests and immunizations (shots)
- a visit to a chiropractor or acupuncturist
- tests such as x-rays, blood tests
- imaging such as CT/pet scans and MRIs
- prescription drugs
- ambulatory surgery (without overnight stay)
- emergency room visits and urgent care
- hospital stays (overnight or longer)
- mental health care
- care during pregnancy and childbirth
- home health care, rehabilitation services such as physical or occupational therapy, medical equipment
The summary also lists some services that your health plan explicitly does not cover!
This document goes by a variety of names (Certificate of Coverage, Evidence of Coverage, Booklet of Benefits, etc.) is much more detailed than the Summary of Benefits and is often several hundred pages long.
If you are considering an expensive treatment or procedure, you should check this out. there is usually a table of contents at the beginning, which lists the various types of services. An easy way to find the service you are looking for is to read this document online and use your computer’s search features to find words that describe the service. For example, if you’re wondering if an eye exam, glasses, or contact lenses will be covered, you can search for those words or “vision.”
The coverage agreement will explain what is covered and what your share of the cost will be. For some types of services, there may be limits on how often you can receive treatment (for example, one eye exam per year, 12 acupuncture treatments per year, 25 physical therapy visits per year). the agreement will also list services that are not covered or are covered only under certain circumstances.
call the customer service department of your health insurance company
If you don’t have your coverage documents or don’t understand them, you can call our customer service department. they will be able to explain your coverage in clear, simple language and 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.
calculate how much you will have to pay
As mentioned above, even if your health insurance covers a medical service, you may still have to pay part of the cost. very few things are 100 percent covered. 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 pocket before your health insurance plan kicks in. For example, if your deductible is $1,000, you will have to pay for all of your medical services until you have paid a total of $1,000. Today, 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 full cost.
Another cost you may have to pay is a “copayment.” a set 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 “coinsurance.” 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 maximum amount of money you’ll have to pay out of pocket for the entire year. After you have paid this amount, your insurance pays all the costs. (Of course, there may be exceptions to this).
accurate 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 will pay. Many things are included in the cost of health care, and it’s often difficult to get an exact cost up front. in larger or complex services, unexpected things can happen that affect the cost. Talk to your doctor and health insurance company about costs before committing to expensive procedures.
a couple of examples
(Note: All costs listed here are examples only. They are not necessarily the actual costs of these medical services.)
let’s say your health insurance plan has a $2,500 deductible, a $25 copay for office visits, a $50 copay for specialist office visits, a 30% coinsurance for surgery, and a $7,150 out-of-pocket maximum .
office visit for ear pain:
Let’s say the office visit costs $100. this is his first and only medical service of the year. Because you didn’t meet your deductible, you’ll pay the full cost of this visit: $100.
If you had already had several medical services during the year and had already paid $2,500, your cost would be $25, for the office visit copay.
let’s say the cost of this surgery is $10,000. Before deciding she needs the surgery, she had an office visit ($100), a visit to an orthopedic specialist ($300), and an MRI ($800). so you already paid $1,200 but didn’t meet your $2,500 deductible.
You will owe the remaining $1,300 of your deductible ($2,500 minus $1,200), plus 30% coinsurance for the $3,000 surgery (30% of $10,000). therefore, the amount you will pay for this knee surgery is $4,300 ($1,300 plus $3,000). the 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).
Based on this example, you will still have to pay $1,650 for other medical services during the year, until you reach your out-of-pocket maximum of $7,150.
“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 exams (heart rate, blood pressure), and immunizations (measles, mumps, tetanus, and other shots), your health insurance will pay 100 % of costs. You won’t have to pay your deductible, copays, or coinsurance. But some things your doctor may recommend at this visit are not preventive care, so you may have to pay for some of the tests you have. You can always ask your doctor before getting a test if it’s part of “preventive care.”
appeals of 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, you can appeal and ask them to reconsider. the law requires them to tell you why they didn’t cover the service.
If you still don’t agree, you can appeal the decision and have it reviewed by an outside party. Your insurance company must tell you how to dispute or appeal a coverage decision.
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