Two recent stories from Kaiser Health News caught my attention because they underscore the burden placed on patients to understand exactly what services their health insurance does or doesn’t cover.
- Beware: Your Insurer May Define A Health Emergency Differently Than You Do
- How Not To Find Out Your Health Plan Lacks Hospital Benefits
Of course everyone should know their health plan’s benefits, but with so many different types of plans, and the hair-pulling-out frustrations of narrow networks, it can be really difficult. Unfortunately, the financial consequences of making a mistake are heavier than ever.
The first story tells of a patient who went to an emergency department after coughing up blood. Months later, he owes over $200,000 in medical bills. How did that happen?
Easily. The hospital he went to for his emergency visit and subsequent treatments was not part of his insurance company’s network of preferred providers.
In an emergency, whether a doctor or hospital is in a plan’s network doesn’t matter. Every health insurance plan – whether purchased on the Affordable Care Act marketplace, employer-based, or privately purchased – allows you to go to the nearest hospital.
But what people might not realize is that once you are stabilized, you must transfer to an in-network doctor or hospital. If you don’t, you are responsible for the cost of your care. And you won’t be saved by the ACA’s yearly maximum out-of-pocket costs of $6,600 for an individual and $13,200 for a family.
Different insurance companies will treat out-of-network providers charges in different ways. Some will have no out-of-pocket (OOP) limit. That sounds like what happened to the gentleman in the story. Other companies, like mine, will double the OOP limit. If I go out-of-network for care, I would be liable for over $25,000 in medical bills—although that still sounds like a deal compared to $200,000!
[His] experience is in part a cautionary tale about choosing a health plan wisely. Don’t look at just the monthly premium amount. Dig into every aspect, from deductible to co-pays to coinsurance. Make sure that the pharmacy formulary covers your prescriptions and that the network includes your doctor and preferred hospital.
The other story is about the “minimum essential coverage” or “skinny” health plans that don’t cover hospitalizations and hospital-related costs.
[The patient] thought she had decent medical coverage after she fell in December and broke her wrist. She had come in from walking the dogs. It was wet. The fracture needed surgery and screws and a plate.
Weeks later, she learned her employer health plan would cover nothing. Not the initial doctor visit, not the outpatient surgery, not the anesthesiology. She had $19,000 in bills.
She was shocked when she learned it covered none of the charges for her broken wrist. She had always been careful to have medical insurance. Now she faced hospital bills for more than half her annual income.
These skinny plans are being used by some employers, mostly the small business employers, as a way to skirt the fines if they don’t offer their employees health insurance that meets the ACA’s poorly defined and worded (hmm, where have we heard that before?) minimum essential coverage.
Skimpy though they are, such benefits meet one of the law’s tests — the one that says employers must offer “minimum essential coverage” or pay a fine of about $2,000 per worker. (They do not pass a second requirement — that employer coverage offer “minimum value” including hospitalization. Flunking that test can result in a different fine of up to $3,000 per worker.)
The bottom line is that everyone needs to understand their health insurance before they need to use it. Call your insurance company’s customer service number (or make an online account) and ask questions! If your health insurance is provided through your employer, talk to the human resource manager about the plan’s benefits—what is and isn’t covered.
And know which hospitals and physicians are included in your preferred provider network, if you have one.
Lastly, if you do find yourself faced with surprise medical bills, look at this website from the Consumers Union for tips on how to file a complaint or negotiate the costs.
Related post: Surprise medical bills