Understanding Your Insurance Coverage
By Kanchan G. Patel, MPH
In today’s world of regulated medical care, it is important to know all that you can about your health insurance options. What is available to you? How does it work? What are the benefits of HMOs vs. PPOs vs. POS? The questions could go on and on. This series of articles is designed to answer some of your questions regarding healthcare coverage. It is information that could prove vital to the your good health and that of your family and loved ones.
Your health insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, drugs and treatment services. The insurance company agrees to pay for the cost of certain benefits listed in your policy. These are called covered services.
Your policy also lists the services that are not covered by your insurance company. You have to pay for any uncovered medical care that you receive. Remember that a medical necessity is not the same as a medical benefit. A medical necessity is something that your doctor has decided is necessary and often may need to document for the insurance company. A medical benefit is something that your insurance plan has agreed to cover. In some cases, your doctor might decide that you need medical care that is not covered by your insurance policy. In that case, based on the rules already set by your insurance company, the doctor must either get pre-authorization or pre-certification for that treatment before it is rendered, or may have to send documentation explaining why the doctor has deemed this treatment necessary to the insurance after the treatment has been given.
Insurance companies determine what tests, drugs and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. Your insurance company's choices may mean that the test, drug or service you need isn't covered by your policy.
Your doctor will try to be familiar with your insurance coverage so he or she can provide you with covered care. However, there are so many different insurance plans that it's not possible for your doctor to know the specific details of each plan. By understanding your insurance coverage, you can help your doctor recommend medical care that is covered in your plan.
Take the time to read your insurance policy. It's better to know what your insurance company will pay for before you receive a service, get tested or fill a prescription. Some kinds of care may have to be approved by your insurance company before your doctor can provide them.
If you still have questions about your coverage, call your insurance company and ask a representative to explain it.
Remember that your insurance company, not your doctor, makes decisions about what will be paid for and what will not. Most of the things your doctor recommends will be covered by your plan, but some may not. When you have a test or treatment that isn't covered, or you get a prescription filled for a drug that isn't covered, your insurance company won't pay the bill. This is often called "denying the claim." You can still obtain the treatment your doctor recommended, but you will have to pay for it yourself.
If your insurance company denies your claim, you have the right to appeal (challenge) the decision. Before you decide to appeal, know your insurance company's appeal process. This should be discussed in your plan handbook. Also, ask your doctor for his or her opinion. If your doctor thinks it's right to make an appeal, he and his office staff may be able to help you through the process.
Here are some terms commonly used by insurance companies to explain your coverage. These are just a few of the terms that you should be familiar with in order to make sense of your health insurance policy.
· Allowed charge: the maximum amount, according to the individual policy, that insurance will pay for each procedure or service performed.
· Assignment of Benefits: authorization granted by the patient to allow the insurance company to pay claim benefits directly to the healthcare provider.
· Coinsurance: a specified percentage of insurance determined for each service the patient must pay the health care provider.
· Copayment: a provision in an insurance policy requiring the policyholder or patient (also known as the guarantor) to pay, at the time of service, a specified dollar amount to a health care provider for each visit or medical service received.
· Deductible: a specified amount of annual expense for covered medical services that the insured must accumulate and pay out-of-pocket each policy year to the healthcare provider before the insurance company will begin paying benefits.
· Health maintenance organization (HMO): a pre-paid, managed care, health care provider group practice with responsibility for providing health care services for a fixed fee to subscribers in a given geographical area.
· Managed Care: patients receive care form a set group of doctors and providers. Usually the patient pays a copayment for each service.
· Medicaid: combined federal/state program designed to help people on welfare or medically indigent people with medical expenses.
· Medicare: a federal health insurance program for people 65 years of age or over and retired on Social Security, Railroad Retirement, or federal government retirement programs, individuals who have been legally disabled for more then 2 years, and persons with end-stage renal disease.
· Participating Provider (also known as in-network provider): a health care provider who has entered into a contract with the government or insurance company to provide medical services to enrolled subscribers.
· Point-of-service plan (POS): a plan that is either an open-panel HMO or PPO that allows the enrollees to choose between using the in-network or out-of-network providers whenever they need medical care. The plan benefits are higher and the out-of-pocket expenses are lower when the insured uses a network provider.
· Pre-authorization: prior approval for reimbursement of health care services by a third-party payer (e.g., the insurance company). Synonymous with precertification.
· Preferred Provider Organization (PPO): pre-paid managed care, open panel, non-HMO affiliated plan that provides more patient management than is available under regular fee-for-service medial insurance plans and contracts to provide medical care for PPO patients for a special reduced rate.
· Referral: total transfer of a patient’s medical care to another physician for treatment limited to a specific disorder.
· Subscriber: the insured; the policyholder.
· Welfare (also known as public assistance): federal and state finanacial and other assistance given to persons whose income falls near or below the federally designated poverty level.
Kanchan G. Patel, MPH is the administrative director at the Physicians Wellness Center, the medical office of Dr. Hitesh R. Patel, MD, located at 1804 Oak Tree Road, Suite 4, in Edison, New Jersey. Being a family practice medical office, their patients span all ages, from the newborn to the elderly. Dr. Patel provides emergency health care at his office, and both Dr. and Mrs. Patel is more than happy to answer any further questions you may have, on this or any other health-related matter. You can reach either of them at (732) 744-0634. Be sure to ask about the exciting family medical and laser & cosmetic medical procedures available at the Physicians Wellness Center; the friendly staff is always happy to discuss them with you.