Important Terms to know
Deductible: The amount you’re responsible for paying for covered medical expenses before your health insurance begins to pay for covered medical expenses each year.
Coinsurance: Shared costs between you and the health insurance plan. For example, you pay 20 percent of costs and your plan pays 80 percent. These percentages may be different from plan to plan. Some plans may not have coinsurance.
Copayment: The payment you make, usually a fixed dollar amount such as $25, each time you visit the doctor or fill a prescription medication. Not all plans have copayments. Copays will not typically go towards the deductible.
Premium: The amount you pay for your health insurance each month in order to have active coverage.
Out-of-pocket maximum: The most you will have to pay for covered medical expenses in a plan year through deductible and coinsurance before your insurance plan begins to pay 100 percent of covered medical expenses.
About Your Policy
Your health insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, drugs and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. These are called “covered services.”
Your policy also lists the kinds of services that are not covered by your insurance company. You have to pay for any uncovered medical care that you receive. Keep in mind that a medical necessity is not the same as a medical benefit. A medical necessity is something that your doctor has decided is necessary. A medical benefit is something that your insurance plan has agreed to cover. In some cases, your doctor might decide that you need medical care that is not covered by your insurance policy. Insurance companies determine what tests, drugs and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. Your insurance company’s choices may mean that the test, drug or service you need isn’t covered by your policy.
Your doctor will try to be familiar with your insurance coverage so he or she can provide you with covered care. However, there are so many different insurance plans that it’s not possible for your doctor to know the specific details of each plan. By understanding your insurance coverage, you can help your doctor recommend medical care that is covered in your plan.
Take the time to read your insurance policy. It’s better to know what your insurance company will pay for before you receive a service, get tested or fill a prescription. Some kinds of care may have to be approved by your insurance company before your doctor can provide them.
If you still have questions about your coverage, call your insurance company and ask a representative to explain it.
Remember that your insurance company, not your doctor, makes decisions about what will be paid for and what will not.
Most of the things your doctor recommends will be covered by your plan, but some may not. When you have a test or treatment that isn’t covered, or you get a prescription filled for a drug that isn’t covered, your insurance company won’t pay the bill. This is often called “denying the claim.” You can still obtain the treatment your doctor recommended, but you will have to pay for it yourself.
If your insurance company denies your claim, you have the right to appeal (challenge) the decision. Before you decide to appeal, know your insurance company’s appeal process. This should be discussed in your plan handbook. Also, ask your doctor for his or her opinion. If your doctor thinks it’s right to make an appeal, he or she may be able to help you through the process.
Understanding Your Health Plan’s Rules
If you have insurance through your employer, you probably are in a managed care plan. If you are in Medicare, you might be in a managed care plan too. You can’t always tell from the name of the plan. It’s the rules that count.
When you signed up for your insurance plan, you agreed to its rules. You were probably given a packet that describes the kind of coverage you have. To avoid misunderstandings about your coverage, you need to read the rules of your insurance plan. For most plans, the important rules fall into these groups:
Doctors and hospitals the plan works with. Managed care plans sign contracts with certain doctors and hospitals to care for their plan members. Your plan may refer to them as providers. This group of providers is often called the plan’s network. Like you, they have agreed to follow the plan’s rules. Your insurance company may not pay for you to go to a provider who is not in its network. If it does pay for you to use a provider outside your network, it may pay less than it would for a network provider. In either case, you are responsible for the part of the bill that the plan doesn’t pay.
Even if your doctor is part of the plan’s network, he or she may prefer to send patients to a hospital that isn’t in the network. If so, ask if your doctor can send you to a hospital in the network. If that isn’t possible, you can ask the insurance company if it will approve the use of the out-of-network hospital. If no other arrangements can be made, you might have to see another doctor.
Rules for seeing specialists. Many managed care plans won’t pay for you to see a specialist unless your primary care physician (usually your family doctor) thinks it is necessary. If you see a specialist without a referral, you might have to pay more for the care you receive.
Rules for getting expensive services. If your doctor decides that you need to go to the hospital, have surgery, or have certain tests, your insurance company may refuse to pay for it unless it can preauthorize the treatment (approve it beforehand).
Working with your managed care plan can be confusing, but remember: You can always call your insurance company for help, it is usually listed on the back of your insurance card.