Greetings, Steemians!
This is the first in a series of posts geared toward helping you become familiar with the ins and outs of health insurance. I want to make sure that you are getting the most out of your health plan. This series focuses on commercial health insurance. Meaning, a plan you have through your employer. Some information, such as terminology related posts, will crossover into individual and Medicare policies.
I currently know very little about Medicaid, so I won't be diving too much into that.
Let's start with the most basic health plan component: The deductible.
I can hear the moans and groans and clicking to another post now: "of course I know what a deductible means! I have one for my car insurance. It's the amount I have to pay toward getting my car repaired if it gets wrecked. My insurance picks up the rest."
That's a GREAT start!
Keep in mind that a deductible only applies to COVERED SERVICES. So, your doctor, lab, outpatient hospital, or other healthcare provider, may submit a bill to your insurance company and still bill you for all or a portion of it. That could be GOOD NEWS, believe it or not. It may mean you are one step closer to meeting your deductible.
Your insurance carrier will only apply the allowed amount to the deductible. The allowed amount will either be the provider's contracted rate, or "eligible medical expenses," also known as "reasonable and customary rates," which I will cover in another post. Trust me, you want to stay in your health plan's provider network to get the biggest bang for your healthcare buck. If you go to a non-network (aka non-participating or out-of-network) provider, you may only get partial credit for your deductible, but still owe the entire billed amount.
Let's look at a couple of examples.
Example 1: In-network provider submits a claim for $1,000. The contract rate is $225. That amount applies to your deductible. You owe the healthcare provider $225 instead of $1000. You are also $225 closer to your insurance company paying out a percentage of future claims.
Example 2: Same service, out of network provider, same charge. Reasonable and customary rates tend to be higher than the rates negotiated by the insurance company. In this scenario, we will say it's $575. You owe the provider $1000 and are $575 closer to your healthplan paying out. Why aren't you $1000 toward meeting your deductible, you ask? Because the plan only applies covered expenses to the deductible. Amounts over reasonable and customary are not a covered benefit.
Kind of like if your car insurance doesn't cover the use of rental car while your car is in the shop. It's only covered if 1. You have this coverage on your plan, 2. The rental is needed due a covered claim.
Is it starting to make sense?
Health care can seem confusing, but I think it helps to relate it back to other things we understand. That is what I'm trying to accomplish with this series of posts.
I'll be back soon to help unravel more mysteries of healthcare coverage!