You already know that health insurance coverage is essential to help pay for the cost of medical care, from routine wellness visits to emergency care. However, do you know what your health insurance plan actually covers? Every plan differs in terms of covered services and the amount the insurance company pays toward them. Don’t be caught by surprise. Keep reading to find out more about the basics of health insurance coverage and how to understand the exact terms and restrictions of a policy so you can make an informed decision on which one is right for you.
What Are the Available Types of Health Insurance?
There are two main types of health insurance: private and public (government).
Private Health Insurance Plans
Most Americans have private health insurance through an employer’s group plan or by purchasing a policy through a federal or state-run marketplace, an insurance agent, or directly through an insurance carrier. Private health insurance has no eligibility restrictions, so you can’t be refused coverage or charged more due to a health condition.
Remember that employer-sponsored plans don’t need to meet the same standards as plans under the Affordable Care Act (ACA). Employers must provide affordable coverage that meets the minimum value standard. This amounts to 60% or more of the median cost of services, or the equivalent of a bronze plan via the Health Insurance Marketplace.
Public Health Insurance
The public insurance plans Medicare and Medicaid are funded and run through the government. They are meant to provide free or low-cost medical services to Americans aged 65 and older, disabled people, pregnant women, children, and low-income adults.
What Does Private Health Insurance Cover?
It’s crucial that you review your insurance plan thoroughly to understand your benefits and covered services. All private policies differ, but most include essential and preventative services. Keep in mind that your policy determines the cost of every service. Even if it is covered, you are still responsible for any copayments, deductibles, and other fees as outlined in your policy.
Health insurance plans purchased through the Health Insurance Marketplace cover 10 essential benefits and preventative care services. They are given rankings to define coverage limits and the financial obligation of the policyholder:
- Platinum plans require members to pay about 10% of the cost of medical care
- Gold plan members pay 20%
- Silver plan members pay 30%
- Bronze plan members pay 40%
The monthly premium for bronze plans is the lowest, and premium rates increase with each tier. Out-of-pocket expenses for the year 2022 are capped at $8,700 for individuals and $17,400 for families.
Essential Health Insurance Coverage
The Affordable Care Act (ACA) requires the following 10 essential health benefits are covered by any private plan purchased through the federal Health Insurance Marketplace:
- Emergency services
- Ambulatory patient care
- Pregnancy, maternity, and newborn care
- Prescription drugs
- Mental health and substance use disorder services
- Rehabilitative and habilitative services
- Laboratory services
- Preventative and wellness care, plus management of chronic diseases
- Pediatric services, including vision oral care
Marketplaces run by states are also required to provide 10 essential health benefits (EHBs), but the exact list can vary.
Plans purchased through the Health Insurance Marketplace also cover the following adult preventative services, with some restrictions, without a copay:
- Screening and counseling for alcohol misuse
- Abdominal aortic aneurysm (one-time screen for male smokers aged 66-75)
- Aspirin use for ages 50-59
- Blood pressure screening
- High-risk cholesterol screening
- Colorectal cancer screening for ages 50-75
- Depression screening
- Type 2 diabetes screening in overweight adults aged 40-70
- Diet counseling
- Fall prevention (age 65+)
- Hepatitis B screening
- Hepatitis C screening
- HIV screening
- Lung cancer screening (smokers age 55-80)
- Obesity screening
- Sexually transmitted infection prevention
- Statin preventative medication (age 40-75)
- Syphilis screening
- Tobacco use screening
- Tuberculosis screening
Women who are or may become pregnant are entitled to the following:
- Anemia screening
- Breastfeeding counseling and support
- Folic acid supplements
- Screening for gestational diabetes
- Gonorrhea screening
- Hepatitis B screening (pregnant women)
- Preeclampsia screening
- RH incompatibility screening
- Syphilis screening
- Tobacco intervention and counseling
- Urinary tract infection screening
Additional women’s services are:
- Breast cancer genetic test counseling
- Mammography screenings
- Breast cancer chemoprevention counseling
- Cervical cancer screening
- Chlamydia, gonorrhea, and syphilis screening
- Osteoporosis screening (age 60+)
- Urinary incontinence
- Well-woman visits under age 65
Medical Necessity vs. Medical Benefit
Medical benefits refer to the services that your insurance plan covers. A medical necessity is when your doctor declares that a service is needed. Sometimes, what your doctor deems a medical necessity isn’t covered by your insurance.
It’s up to the insurance company to decide what services, testing, and prescription drugs they cover. Make sure you understand your carrier’s exclusions, especially if you are at higher risk of developing an illness that requires advanced or uncommon treatments.
Most doctors try to only prescribe treatments and order services that are covered by your insurance, but it’s impossible for them to know every detail of each plan out there. Knowing your own insurance benefits is the best way to help your doctor recommend covered services.
Review your policy before undergoing testing and make a call to your insurance company to get pre-approval if possible. If you undergo treatment that is not covered, your insurance company can deny the claim, and you will need to pay for it yourself. You can appeal a denied claim, but there is no guarantee that the decision will change.
Factors that Affect Your Coverage and Financial Responsibility
Every health insurance plan has different levels of coverage. You may be expected to share the cost of services through the following:
- Copayment: The amount you pay for your doctor visit, test, or prescription
- Coinsurance: The percentage of the price you pay for certain medical services after you meet your yearly deductible
- Deductible: The dollar amount you have to pay each year before your insurance company starts to cover the costs of services
The plan you select determines the exact price of your copays, coinsurance, and deductible. You can select a lower deductible in exchange for paying a higher monthly premium. If you are healthy and don’t foresee needing frequent medical care, you can keep your monthly premiums lower with a high deductible. Keep in mind that going this route requires you to pay more out-of-pocket at the time of service if you require care.
Choose the Right Policy for Your Needs
Select the right health insurance coverage by asking questions, doing your research, and comparing potential policies. Before you purchase a plan, talk to your doctor. You should always choose coverage from a carrier that your primary healthcare providers accept. Your insurance also needs to consider your providers’ in-network to reduce costs.
Once you know which insurance carriers you can pick from, compare quotes for policies that offer similar coverage. Consider the health of yourself and your family. What types of coverage do you require? How often do you visit the doctor? The unique medical needs of your family determine what type of policy delivers the best value at an affordable premium cost.
You might also be interested in: Your Guide to Understanding Private Health Insurance