It’s not so easy...
If you’re among the majority of Americans who have health insurance, you’re almost certainly aware that simply having coverage doesn’t always protect you from exorbitant bills that can lead to medical debt.
Alarmingly, the vast majority (80%) of those who experience medical debt have health insurance, and medical debt remains the leading cause of bankruptcy nationwide, accounting for two-thirds of all filings.
Though avoiding unexpected bills isn’t always possible or easy, staying informed about the specifics of your plan’s coverage can help you insure that you’re getting the most coverage out of your insurance.
What will my plan actually cost?
First, it is important to fully understand the financial structure of your coverage and whether it is right for you.
You can find this information in your plan’s summary of benefits coverage (SBC) online or in your plan handbook. All plans are required by law to have an SBC, which is a breakdown of the financial components of your coverage.
There are several important components you’ll want to look for in your SBC - your premium (what you pay annually), your deductible (the amount you pay before your insurance kicks in, a form of cost-sharing), and your out-of-pocket limit. In addition to your premium and deductible, you should assess the extent of cost-sharing under your plan to more fully understand how much you might be expected to pay.
Cost-sharing refers to expenses you incur out-of-pocket in addition to your annual premium, such as your deductible, coinsurance, and copayment. Your plan’s out-of-pocket limit is a more comprehensive way to gauge cost-sharing than any of these components alone, representing the maximum amount you may be expected to pay out-of-pocket over the course of a year.
The Affordable Care Act (ACA) enforces limits to cost-sharing for plans purchased through the federal Health Insurance Marketplace and other “qualifying health plans” (QHPs) - $7,900 for individuals and $15,800 for families in 2019. These limits are expected to increase in 2020.
Keep in mind that your out-of-pocket limit does NOT include out-of-network spending. If you have out-of-network coverage, usually only a portion of it will apply to your out-of-pocket limit, and your coverage will only partially reimburse these providers.
Generally speaking, plans with a higher premium will offer more comprehensive benefits and a lower deductible, with lower overall cost-sharing. Though these plans are typically of a higher grade than low premium/high deductible plans, not everyone is going to benefit from the same type of plan.
If you can, shop around for a plan with a payment and cost-sharing components balanced in a way that fits your needs, accounting for your health, age, and financial situation.
What services will my plan actually cover?
Regardless of what it costs, your insurance only helps you when it covers the medical services you need.
Understand that all ACA plans are required by law to cover certain types of care to be certified as “qualified health plans” (QHPs). In addition to following established limits on cost-sharing, all QHPs (whether or not they are offered on the federal Health Insurance Marketplace) must include ten “essential health benefits” (EHBs):
- Ambulatory services (outpatient care without admittance to a hospital)
- Emergency services
- Hospitalization (i.e. essential surgery)
- Maternity and postnatal care
- Mental health and substance use disorder services, including behavioral health treatment (i.e. counseling, psychotherapy, psychiatry, and inpatient rehabilitation)
- Prescription drugs
- Rehabilitative and habilitative services and devices for those with injuries, disabilities, or chronic conditions (i.e. physical therapy)
- Laboratory tests
- Preventative services and chronic disease management (i.e. immunizations and check-ups)
- Pediatric care, including dental and vision care for children
Depending on your insurance, you may receive additional coverage beyond the 10 EHBs (i.e. adult dental or vision care).
If only things were that simple.
Standards for EHBs vary by state, so QHPs purchased on individual state vs. federally-facilitated marketplaces may have different standards for qualifying coverage.
Additionally, just because a plan provides “minimum essential coverage” (MEC) does NOT mean that it is a QHP and covers the 10 EHBs. If you did not purchase your plan from the federal ACA exchange, you should check your plan’s covered services package to ensure that it is a QHP and covers these services.
Your covered services package is usually found in your plan handbook, insurance policy, or online account, though not necessarily in a comprehensive or easily accessible format. If you have questions about a specific type of coverage, do not hesitate to contact your insurance company’s member services’ phone, email or chat lines.
We’re talking about health insurance right? What’s the catch?
Coverage for a type of service will NOT pay for every relevant medication or procedure, and doctors and hospitals MUST be in your network to be paid for by your health insurance.
Some kinds of coverage also require approval by your insurance company. It is ultimately the insurance company’s decision as to what is “medically necessary” and what will be covered, not you or your doctor’s.
You should always check whether a provider you intend to receive services from is in network before using them. You can search for doctors and hospitals in network on your online insurance account and contact providers directly to ask if they accept your insurance.
Even doing everything in your power to make sure the care you need is covered, you can easily find yourself facing unexpected costs.
Just because a hospital is in-network doesn’t mean that all doctors, procedures, or medications involved in a service will be covered by your insurance.
For example, suppose you require a hip replacement, which is a procedure covered by your insurance, and you arrange for an in-network chief surgeon at an in-network hospital. Auxiliary doctors involved in the procedure, such as anesthesiologists, may be subcontracted by the hospital and not accept your insurance, greeting you with a hefty medical bill after the anesthesia your insurance doesn’t cover wears off.
Further, when you require emergency care, you may not have the capacity to ensure that the life-saving care you receive is conducted at an in-network hospital.
To add insult to injury, providers may be listed as “in-network” but not accept every type of plan your insurance company provides, and providers may leave networks at any time - they are often not required to notify the insurer.
Lack of transparency in the healthcare market means that you might not know what your insurance is actually paying for until it’s too late.
I’m still confused. What can I do to ensure that my care is covered by my insurance and avoid unexpected bills?
- Assess the payment (premium) and cost-sharing (deductible, co-pay, co-insurance, out-of-pocket limit) components of your plan. This can be found in your summary of benefits and coverage (SBC) online or in your plan handbook.
- Check your covered services package to ensure that your plan covers the 10 essential health benefits (EHBs) and any additional care you need (i.e. dental, vision).
- If you can, shop around for a plan that best fits your health and financial needs.
- Before receiving any service, ensure that relevant providers, procedures, medications, or devices are covered by your insurance.
- Check your online account for in-network providers and covered procedures and medicines.
- Do not hesitate to call, email, or chat with your insurer’s member services division.
- Always ask your doctor if they are in your insurance network, and if there are certain types of insurance plans they do not accept.