Know Your Insurance Policy

Whether you get your insurance from your job, the state, the federal government, an insurance agent, or one of those Affordable Care Act agencies, let’s be honest and say that most people focus on how much the copay and deductible are, and then they’re done. Unfortunately for you, the healthcare consumer, those should be the least of your worries. Deductibles are important, and I get that, but it’s all the hidden costs you aren’t aware of that will drive your debt burden way up.

I recently read an article that 2/3 of cases currently in the bankruptcy courts have a tremendous amount of medical debt involved. I’m not shocked and believe those numbers will climb as policies are not clearly defined for the average consumer to understand prior to paying for them, nor after.

Two weeks ago, I decided to do some undercover work and call one of those “Affordable Care Act” insurance agencies offering benefits. First, I believe in the fundamentals of the ACA being overall good for the general public, but these insurance agencies are taking advantage of consumers, so you must be very careful.

After my initial intake, I received a call from a woman named Veronica. She was talking fast, saying a bunch of stuff that I couldn’t even understand, and then said, “Well, how much do you want to pay?” I instantly asked myself: Am I buying health insurance, or a car? I was turned off but reminded myself that I wasn’t there for personal reasons. I said I have no idea, because I don’t know what’s included and what I’d have to give up.

She began to tell me about these amazing policies that had great coverage, and all for the price of $412, asking if I’d like to sign up? I told her not so fast, you didn’t discuss emergency room fees or inpatient hospital stays. She said, well, you said you were healthy, right? My reply was that I am, but life happens, so what is the benefit for those things in this awesome policy, in case something happens? Her reply was $5,000 a year for inpatient hospital treatment. My reply: That doesn’t even cover half a day. She told me she’d never seen a hospital bill for more than that. I laughed and said, then you’ve never been in the hospital, and you should not be telling people that.

These people just want to sell policies, and they don’t give a thought to what the repercussions are for the patient down the road. The reality is that people are being run over with medical debt, incorrect bills, and being referred to places or providers that may or may not be in their insurance company’s network.

Some important things to know besides your copay:

  • Deductible: Does it apply to all services including office visits with providers until met, or just certain services?
  • Well-Care Visits: Are labs included? If so, which ones, and do they need to use a specific diagnosis code? Is any testing included? If so, which tests? Are their guidelines as to what a medical provider can do during a well-care visit (important question so that you don’t get charged with an office visit as well)?
  • Out-of-Pocket: What is the maximum dollar amount you will have to spend in a year before your insurance company covers everything at 100%?
  • Prescriptions: Are there any limitations based on current medications needed or future ones?
  • Co-insurance: Most policies have cost sharing as a component, which will vary based on the service. When obtaining services, ask for their contracted rate with your insurance company so that you can figure out your cost. Neat fact: Everyone has different rates, so shop around so that your cost share is lower!

For you to become a good healthcare consumer, you must learn your policy and what is and isn’t covered. I know it’s a lot, but you don’t want to be one of those people in the bankruptcy system because you purchased a policy that doesn’t cover you and your family appropriately, or because you received services for which you had no idea the financial repercussions of.

Tips:

  • Understand your policy: Ask questions if you don’t understand, and know where the potential gaps are.
  • Don’t rely on a provider of service to quote you your responsibilities, ask for the CPT/DRG (used at hospitals) codes they are proposing, and then call your insurance company with them and confirm.
  • You may be healthy now, but think of what could happen and make sure you are prepared, including putting money aside for the deductible.
  • Ask the staff up front and get it in writing if you are unsure what’s included in your visit. Feel free to engage your insurance carrier to help—it lets everyone involved know you want transparency.

Definitions:
CPT (Current Procedural Terminology): These are codes that the healthcare industry uses to define the service they provided to the patient.

Affordable Care Act (ACA): Landmark health reform legislation passed by the 111th congress and signed into law by President Barack Obama in March 2010.

Deductibles: An amount that insurance policies may or may not include that must be met prior to an insurance company paying out any portion of a claim submitted by a healthcare entity on your behalf.

Out-of-Pocket (OOP or Stop Loss): As part of most insurance policies, there is a yearly cap for patients to come out of pocket. On most plans, it’s after the patient has already paid thousands of dollars in healthcare costs.

Copay: Fixed amount paid for a service.

Co-insurance: Shared cost for a service (i.e. 80/20 split, meaning you the patient will pay 20% of the billed amount).

Well-Care Visit: A yearly visit (every 366 days) allowed by all insurance but Medicare, whereby your medical provider does an overall assessment and review of your health.

Inpatient Hospital: When a patient is admitted to a medical facility for over 24 hours.

Emergency Room: Part of a hospital meant to be used for acute issues, where patients can remain for under 24 hours.

In-Network: When a healthcare provider, hospital, or ancillary service has a contract for fixed pricing with your insurance company, and you will be subject to paying their pre-negotiated rates.
Out-of-Network: When a healthcare provider, hospital, or ancillary service does not have a contract for fixed pricing with your insurance company, and you will be subject to paying their rates instead of a pre-negotiated rate.

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