What Does Health Insurance Cover? – Forbes Advisor

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Health insurance is something everyone needs. A good health insurance plan is the key to accessing the medical services you need at a price you can afford.

The more you understand about how health insurance works, the better equipped you are to find the best health insurance plan for your needs. Here is a breakdown of the most important aspects of a health insurance plan.

What Does Health Insurance Cover?

A health insurance policy covers many services, procedures and treatments. Here are a few examples of what health insurance typically covers.

Hospital and doctor visits

Health insurance covers the cost of visits to see your primary physician, specialists and other medical providers. It also covers when you get health care services at a hospital, whether for emergency care or surgeries, outpatient care, procedures or overnight stays.

You may be responsible for the plan’s deductible, copayment and coinsurance costs. But as long as you remain in-network and your care is deemed medically necessary, the health insurance plan should pick up the lion’s share of the cost once you reach your plan’s deductible.

Essential health benefits

When the Affordable Care Act passed, it guaranteed that plans offered on the health insurance marketplace cover at least these 10 essential health benefits:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Mental health and substance use disorder services, including behavioral health treatment
  • Pediatric services, including oral and vision care (adult dental and vision aren’t mandated)
  • Pregnancy, maternity and newborn care
  • Prescription drugs
  • Preventive and wellness services (including shots and screening services) and chronic disease management
  • Laboratory services
  • Rehabilitative and habilitation services and devices

Health insurance plans also must cover birth control and breastfeeding services.

Preventive services

Health insurance plans must cover certain preventive health services at no cost to you. That means you can’t be charged a copay or coinsurance.

These services can be divided into three categories: all adults, women and children.

Preventive services required for all adults

Preventive services required for women

Preventive services required for children

Prescriptions

Most health insurance plans are required to offer prescription drug coverage, but which medications are covered varies by insurer.

Your plan has its own formulary or list of approved medications. You can find this list on the health insurer’s website. This list should also be part of the documents your insurer provides to you. You can also call your insurer to find out which drugs are on the list.

In some cases, it might be possible to get an exception from your insurer to cover a medication not on its formulary. This is especially likely if none of the drugs on the formulary can treat your condition effectively. Contact your insurance company to learn more.

Pre-existing conditions

Health insurance companies that sold individual health insurance were once reluctant to cover care related to a pre-existing condition, which is a health issue that you already had before you looked for or actually purchased health insurance coverage. Insurers may decline coverage or charge exorbitant premiums.

That changed with the passage of the Affordable Care Act. Health insurers can no longer deny coverage or charge more due to diagnosis of a pre-existing condition.

What Does Health Insurance Not Cover?

Health insurance does not cover everything. Here are examples of health care services that may not be covered.

Cosmetic procedures

Cosmetic procedures include things that reshape or enhance parts of the body, generally with a goal of improving appearance.

Health insurance does not typically cover this type of care, although some plans may cover cosmetic procedures if deemed medically necessary.

Fertility treatments

Fertility treatments aren’t among the essential health benefits guaranteed by the federal government, and many insurers don’t offer coverage for such treatments.

But some states mandate that insurers cover at least some such services.

New technology in products or services

Many insurance companies will likely refuse to cover experimental or unapproved health care products and services that involve new technology.

Before using such new treatments, make sure your insurer is on board with covering the new approach.

Off-label prescriptions

An off-label prescription generally means the medication is being used in a way that the US Food and Drug Administration has not approved.

Your insurance company may or may not cover medications used this way, so it’s important to talk with your insurer to ensure such treatments will be covered.

What to do if Your Health Insurance Plan Doesn’t Cover a Product or Service

Some health insurance plans may not cover products or services you need. Understanding your coverage as much as possible will help you avoid surprises.

It’s also possible that your health insurer may deny coverage for a claim after you already used a product or service. If this happens, and you believe you have coverage that applies, you have a right to request an internal appeal, in which the insurer will conduct a full and fair review of its decision.

If your claim still isn’t approved, you can request an external review, in which a third party will have the final say over the claim.

Is a Medical Necessity Covered?

Health insurance companies use the term “medical necessity” to describe services that they cover. As a general rule, insurers will pay at least a portion of the cost for services that meet this definition. A service typically must be “medically necessary” before it will be covered.

A doctor’s willingness to say that a service is “medically necessary” may help convince an insurer that the service is necessary.

Other Things to Consider for Health Insurance

Understanding how your health insurance policy works is crucial to avoiding potentially costly mistakes. Here are some terms to understand:

Preapprovals

Health insurers use the preapproval process to decide whether a medication, procedure or service is medically necessary.

That means you must get pre-approval before pursuing these types of health care. If you do not, you may be responsible for the entire bill.

In-network vs out-of-network

Physicians, hospitals and other medical providers who agree to accept your health insurance are known as “in-network” providers. All other entities are “out-of-network.”

Some insurance plans, such as health maintenance organization (HMO) and exclusive provider organization (EPO) plans, typically do not cover out-of-network providers. That means you will be on the hook for all expenses incurred.

In other cases, the plan will pay for some of the charges, but usually at a much lower percentage than for “in-network” entities. That’s generally the case for preferred provider organization (PPO) and point of service (POS) plans.

Prescription drug costs

Health insurance plans typically cover the cost of prescription drugs. That doesn’t mean they will cover all medications, so make sure you understand which drugs are covered and at what rate.

Copayment

A copayment is a fixed amount that you might owe for seeing a provider or even for undergoing a lab test or getting a prescription medication. A copay to see a specialist or visit an emergency room is generally more expensive than going to your primary care provider or visiting an urgent care center.

Deductibles

A health insurance deductible is the amount you must pay out of pocket annually for health care services before your insurance kicks in. Deductible amounts can be high, often thousands of dollars.

Some insurance companies pay for specific services even before you meet your deductible. Check with your insurer to find out if it offers these services.

In addition, all plans sold on the marketplace must cover the full cost of some preventive benefits even before you meet your deductible.

Once you meet your deductible, your health insurer will pay a portion of the costs and you pick up the rest. That’s called coinsurance.

Coinsurance

Coinsurance is the percentage of health care costs that you are responsible to pay once you reach your deductible.

For example, if your coinsurance is 20% and you are charged $100 for a health care service, you owe $20.

Health insurance comes with an out-of-pocket maximum that you can be charged each year. This amount is usually several thousand dollars. Once you reach your out-of-pocket maximum, you’re not responsible for health care costs for the rest of the year. The health plan pays all of the costs when you receive care.

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What Does Health Insurance Cover FAQ

Is health insurance really worth it?

Health care services are potentially expensive, so nearly everyone can benefit from having health insurance coverage.

Purchasing health insurance on the Affordable Care Act (ACA) marketplace is also more affordable than you may think, thanks to subsidies that the federal government provides to millions of Americans to reduce the cost. Those subsidies are based on your household income.

What’s the worst that can happen if I don’t have health insurance?

Without health insurance, you will likely be responsible for all your health care expenses. In some situations, this could be financially ruinous.

The federal government notes that simply treating a broken leg can cost $7,500. Three days in the hospital might run you $30,000.

And those are relatively minor costs compared to the hundreds of thousands of dollars it might cost to treat an especially serious or chronic condition if you don’t have health insurance.

Can a hospital deny me care if I’m not covered by health insurance?

An emergency room cannot refuse to treat a person simply because the patient does not have health insurance, so long as the care the person needs meets the standard of an emergency.

The individual can still be charged for such services. In addition, once the emergency has passed, the hospital can discharge or transfer the patient.

How much is health insurance?

The average monthly health insurance premiums for a Bronze plan in the marketplace is $928, $1,217 for a Silver plan and $1,336 for a Gold plan.

The exact cost of health insurance varies by multiple factors, including your age, location, insurance company and type of plan. Health insurance companies can’t use your gender or health status and pre-existing conditions when setting rates.


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