Will my insurance cover this?

 In Ethics and other topics of interest

Here’s a question I am asked daily, often a few times a day.  Whether it relates to something as straightforward as a routine annual examination, or as complex as major surgery, we all want to know what our financial responsibility will be.  In other words, most of us like to know what things cost before purchasing them.  And, it should be a simple question to get the answer to, right?

Wrong.

While there are always factors which can complicate the question – not the least of which is the wide variety of insurance plans available, each providing a different amount of coverage – the problem, I believe, stems mainly from what is meant by the word “cover”.  The temptation is to assume that the question at the beginning of this article could be substituted with the following: “Will my insurance pay for this?”

The word “cover”, as used by insurance companies, refers to what is known as a covered benefit.  It does not (I repeat, does not) mean “pay for”.  A covered benefit is an illness or a procedure which is included within the scope of a particular insurance plan.  For example, let’s say you are having pain, and need an evaluation.  Will insurance cover it?  Almost always, this is a covered benefit, so the answer is yes.  But let’s take a look at the question “Will insurance pay for it?”

First, the insurance company allows your doctor to charge a specified amount for an office visit and ultrasound.  As we’ll see soon, it doesn’t really matter what this amount is – but let’s use $200 for simplification.  Most patients have a copayment, let’s say $20.  That’s the amount, taken from the $200, that the patient must pay up front.  So, at least insurance pays $180, right?  Wait.  Usually, insurance plans have a deductible – I’m going to use $1000, but it can range from $250 to $5000 or more.  The deductible is the total amount a patient must pay before the insurance plan even begins to kick in.  So, you will receive a bill for $180.

So, to review – Was this covered by insurance?  Sure.  Was it paid for by insurance?  Heck, no.  We see this scenario over and over and over again.

Usually, your doctor’s office will be able to check with your insurance company to determine what your financial responsibility will be (particularly for surgical procedures), and they should be able to explain it to you.  If you decide to call the insurance company yourself, however, make sure you don’t simply ask “Is this covered?”  You want to ask a few other questions:

  1. Is this a covered benefit?  (If not, you can stop here – they won’t pay at all!)
  2. Do I have a copay?
  3. Do I have a deductible?  If so, what is it?  How much of it have I already met?
  4. Once I meet my deductible, what percentage of the remainder will my insurance pay? 

The last question is very important – Even once you meet your deductible for the year, and have paid any copay, there might be a balance owed.  Many insurances will cover only a percentage (usually 60-80%) of any costs beyond the deductible, so you could still be responsible for another 20-40%, or more, of what’s left.

Bottom line – If you ask the right questions, you won’t be surprised by your bill.

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