Understand Your Health Insurance Policy....before you need it

Don't wait until a medical emergency or illness occurs before you understand your health insurance policy.  Although trying to read your policy may be as interesting as watching paint dry and also confusing, it is important to at least gain enough information about your policy to understand the basic policy terms and what it covers. When you sign up for an insurance policy, you are agreeing to follow the rules of the plan.  Most likely you were given a benefit booklet that you filed away or no longer have a clue where it is located.  The benefit booklet is where you will need to look to understand your health insurance policy.  If it is no where to be found, call the customer service number on your identification card.  Often times they will be able to direct you to where it can be located online.

Many do not realize that just because you and your neighbor both have a PPO plan with the same carrier, say for instance Blue Cross Blue Shield, what is covered under each plan may be entirely different.  

Where does one start?   A good place to begin is by looking at the policy's definition/glossary section.  Understand the terminology being used in the policy and/or how specific terms are defined.  If your policy does not have a glossary section, here is a good place to look: http://www.medicalclaimsconsultant.com/insurance_definitions.html

After you have a basic understanding of the terms, the next important thing about your plan is finding out whether there is a waiting period.  A waiting period is a specific period of time when you are not covered by your insurance. Some plans have a 30 day wait, others 60 or 90 and some are effective immediately. If you go to a doctor before the waiting period has been met, you will be responsible for the full amount of the medical bill.  

In addition to a possible waiting period, some plans may have a pre-existing condition clause. A pre-existing condition, is a medical condition that is excluded from coverage by an insurance company, because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company. Some policies will never cover a pre-existing condition, others will cover them after a specific amount of time has gone by and other plans may cover pre-existing conditions from the start. 

How do you know what medical benefits are covered by your insurance plan?  

Your policy will contain a section titled "covered medical services" that describes what conditions are covered by your plan and the amount payable by the insurance company vs. the amount, you, the policy holder is responsible to pay.  There will also be a section called "exclusions" or "medical limitation and exclusions" which outlines conditions that are not covered by your insurance plan.  It is very important to pay attention to this list because you will be responsible for the entire bill if you are treated for a condition your insurance does not cover. 

Keep in mind, in order to receive the greatest discount on the services covered by your plan, most require you to use in-network providers or health care facilities.  (See previous blog for in-network definition).  Some plans allow you to use an out of network provider, however typically the cost you will pay out of your pocket will be higher; while other plans if you use an out of network provider will not cover the services at all. 

Why do I have to know all this? Won't my doctor tell me?

Although doctor's are familiar with insurance plans, there are thousands of plans out there, and they can not possibly know all the details of your plan.  You are responsible for making sure a procedure is covered under your insurance.  If your doctor recommends a procedure that is not covered by your insurance, you can still obtain the treatment, however your insurance will deny the claim and you will have to pay for the service entirely on your own.  When in doubt about what is or is not covered, CALL your insurance carrier (customer service number will be on your medical id card) and ask.  

The same goes for which providers you go to. Let's say you go to your primary care doctor, who is in-network, and he recommends you to see dermatologist Dr. Jenny Smith.  Before you make an appointment with Dr. Smith, you need to check with your insurance carrier to make sure she is in your network.  Just as your provider can not remember every benefit your plan covers, they too can not remember every doctor in your plans network. 

Many plans also require preauthorization for certain procedures/services. Preauthorization approves in advance the medical necessity of certain care and services covered under your plan and whether the treatment being decided on by your doctor will be covered by your insurance plan.  Medical necessity is not the same as a medical benefit.  A medical necessity is medical care your doctor has decided is necessary, it may or may not be a medical benefit your insurance has agreed to cover.  Your insurance company determines what services, drugs and tests they allow.  

Taking PERSONAL RESPONSIBILITY is key in understanding your health insurance and how it works. It may be confusing but it can be rather expensive if you fail to understand your health insurance policy before you need it.  

Next blog: Prescription drugs-- brand name vs. generic