Health insurance can be confusing, challenging, and down-right daunting to understand. With it changing drastically over the last couple of years, and expecting it will continue to evolve into the future, here are some things you NEED to you understand NOW about your insurance.
Key 1: Know your numbers
Co-pays: This is the amount that you as the insured pay to your provider at the time service is rendered. Depending on the provider you may pay a general “office visit” copay or “specialty care” copay. This amount should be visible on the front of your insurance card if you have a copay.
Deductible: This number is vital to know because this is the amount you'll pay out-of-pocket each year before your insurance begins to cover any medical costs. Let's say you have a health plan with a $1,000 deductible. ... You would be responsible for paying the first $1,000 of medical bills (this could be from medical doctor visits, chiropractic visits, physical therapy visits, prescription medication, etc.) out of YOUR pocket. In other words that means for most services, you'll pay 100 percent of your medical and pharmacy bills until the amount you pay reaches $1,000. After that, you share the cost with your insurance plan by paying coinsurance. Your deductible can be found by reviewing your policy or calling the Customer Service number on the back of your insurance card.
Co-insurance: This is a health care cost sharing between you and your insurance company. The cost sharing ranges from 80/20 to even 50/50. For example, if your coinsurance is 80/20, that means that your insurance covers 80% of annual medical expenses and you pay the remaining 20%, typically after you have met your deductible for the year. Some plans may even have 100% co-insurance, meaning that your insurance will cover the entire amount of your medical bills, again typically after a deductible is met. This number can be found by reviewing your policy or calling the Customer Service number on the back of your insurance card.
Key 2: Understand the process
Once you have obtained these 3 critical numbers it makes it a lot easier for you to make informed decisions about submitting to insurance.
This past year many of my patients have had extremely high deductibles, around $5000 for the year. They knew that they could not rack-up $5000 worth of medical expenses throughout the year, so together we discussed the cost difference of submitting to insurance for their care or paying our discounted cash rate. For the services we planned to perform, it was actually less expensive (by $25 per visit) to pay our time-of-service cash price compared to submitting their visits through insurance. It is definitely worth asking health care facilities if they have a time-of-service discounted fee as it may be a less expensive option and may save you money in the long run, especially if you have a high deductible.
Next, it is important to understand your Explanation of Benefits (EOB). This is the document you get from your insurance company, those forms that say “This Is NOT a Bill”, showing you the amount billed to your health insurance from your provider. Know that this amount is NOT ALL going to be your responsibility as a patient.
To better understand what you are looking at in an EOB, you have to see it from your provider’s side. On the provider end, we must bill for the services we perform (which may be 2-3 codes) per day of service depending on the care plan. We are contracted with the insurance company to get reimbursed a set amount per service provided. So, usually this means we “write-off” about half of the charges.
Let’s look at an example. Say we bill $60 for an adjustment and the insurance company will only reimburse $34 for that charge. We then write-off the $26 difference and it will either be your responsibility as a patient to pay the $34 (if your deducible is not met) or the insurance company may pay a portion. If you have reached your deductible, but still have an 80/20 co-insurance, the insurance company will pay 80% of $34 = $27.20, and you would be responsible for 20% of $34 =$6.80.
Obviously, each insurance company and insurance plan is different so it is important to know your numbers and understand the process, that way you are not surprised along the way.
Lastly, one other important thing to note. Once your services are billed to insurance it typically takes your insurance company 3-4 weeks to process. That is why it seems like it takes FOREVER to get a bill from your health care provider. Set your expectations correctly and know that you may receive a bill from your health care provider 1-2 months from the start of care.
It is always imperative to check with your health insurance for coverage prior to your office visits, as some services may not be covered by your plan.
As health insurance changes into the future my hope is more and more services will be covered by insurance plans and we as patients aren’t overwhelmed with sky-high premiums and lack-luster coverage. Which is a discussion for another day! But for now, if you know your numbers and understand the process you are on your way to overcoming insurance overwhelm!
In health and happiness,