Understanding Your Insurance

INSURANCE! There are times when it can feel like a bad word, but we would all hate it more if we did not have it. Just ask someone who is living without. What I see most often when patients are angry about it is a basic misunderstanding of coverage. It saves you a lot of headaches if you learn a few basics about your policy prior to going to the doctor.

If you can answer the following questions, you are in pretty good shape:
1. Who is my insurance company? (you would be surprised...)
2. What is a deductible and how much is mine?
3. Do I have a copay, co-insurance or both?
4. What is my out of pocket max?
5. Do I need to see an in-network physician?
6. Do I need a referral to see a specialist?
7. Does my employer have a health reimbursement account attached to my policy?

If you do not know the answers to the above questions, you are not alone. However, there is also a good chance that you will get a nasty surprise after going to see the doctor. There is one thing that you need to know ABOVE ALL ELSE about your health insurance. YOU are responsible for knowing your benefits, and neither your doctor or your insurance company is liable for services that you received out of network or that needed a referral or pre-certification. I know, that seems ridiculous when they send you a 50 page book detailing your benefits. How can you possibly know it all? You can't, that is why you need to know the above information and how to get specific information when necessary.

Before we get into gathering the above information, it may be helpful to define a few of the above terms.

Deductible- This is the portion you are required to pay before the insurance starts to pay claims for you. For example, if you have a $500 deductible, you are responsible for the first $500 of your medical bills before the insurance company will pay anything. There are a few possible exceptions to this rule, and you will need to find out if these apply to you. Most preventive visits, such as an annual well visit or physical, will be covered without the deductible being applied. There are also a few plans that cover exams or office visits before the deductible is met. Your copay will still apply to these visits, though. AGAIN- you are responsible for knowing if this applies to your policy.

Copay- A copay is a set amount that you pay for each visit. These may vary by the type of doctor or facility. It is common to have a lower copay for your primary care physician and a higher one for a specialist or the emergency room.

Coinsurance- This is a percentage of the total amount the insurance company covers. It is generally 10-20% of the covered charges.

Out of Pocket Max- This is the maximum amount you will have to pay before the insurance company assumes 100% of the cost. This may or may not include your deductible. For example, if you have a $2,500 out of pocket max and a $500 deductible and a 20% coinsurance, you will need to pay your deductible and then pay 20% of all covered charges until that amount has reached $2,000. At that point, you will no longer need to pay the 20%. Obviously, you hope that you do not have that many medical bills in a year, but for a family of 5 or for someone with a serious illness, it isn't hard to get there.

Health Reimbursement Account (HRA or HSA)- This is a bank account designated to cover health payments only. A lot of employers are using these to lower the cost of insurance for their employees. They will purchase a high deductible plan and then fund an account to help meet the deductible. You will generally get a card to go with the account. This card is then used to pay your medical bills. Other companies will issue the money for you until it runs out. In this case, it is VERY important to know how much they will issue, because if it runs out, it may be 4-6 weeks before you know it, due to the time lag associated with insurance company processing. If you purchase your own insurance or if your employer does not provide the account and you have a high deductible plan, you can set up your own account (an HSA). You may then add money to it, pre-tax, to pay your medical bills.

Confused yet? Hopefully not. The final pieces of the puzzle pertain to networks and referrals. Most insurance companies have a network of providers that they have contacted with that agree to take a set reduction in their fees in exchange for access to that group of patients. You are generally required or at the very least urged to see one of these providers. There are different benefit structures that exist with most companies for in and out of network providers. You need to make sure that you ask the doctor or facility if they are IN NETWORK. I, sadly, hear a lot of stories of how the office said they "took their insurance" and then sent a large bill because they were out of network. The office didn't lie, they filed the insurance. However, they also failed to disclose that your benefits would be better at a different facility. As I stated earlier, YOU are responsible for the bill EVEN IF they failed to tell you that. That is why it is so important to understand your benefits. The same goes for referrals. If you need a referral to see a specialist, it is your responsibility to know it and to get the referral.

So how do you learn what you need to know? It's simple. Call your insurance company and ask them the questions above. Then, write it down and stick it in your wallet or purse with your card. You can also ask the doctor's office to verify your benefits for you. Most will if you ask, but they may not if you don't. When you are having a specific procedure done that you are unsure about, call them again and ask about it.

You may be wondering why your doctor doesn't know your benefits when you tell them who your insurance carrier is. Well, that's because each company sells a large variety of plans. United Healthcare offers hundreds of different benefit structures. There is no way that your doctor can know them all.

Bottom Line: Take a few minutes to ask questions and understand your plan. It will save you from a big headache and a big bill!