Understanding Your Insurance Coverage

Illustration of a person holding a health insurance card.

Your insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, drugs, and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. These are called “covered services.”

Your policy also lists the kinds of services that are not covered by your insurance company. You must pay for any uncovered medical care that you receive. Keep in mind that a medical necessity is not the same as a medical benefit. A medical necessity is something that your doctor has decided is necessary. A medical benefit is something that your insurance plan has agreed to cover. In some cases, your doctor might decide that you need medical care that is not covered by your insurance policy.

Insurance companies determine what tests, drugs, and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. Your insurance company’s choices may mean that the test, drug, or service you need is not covered by your policy.

Your doctor will try to be familiar with your insurance coverage so he or she can provide you with covered care. However, there are so many different insurance plans that your doctor cannot know the specific details of each plan. By understanding your insurance coverage, you can help your doctor recommend medical care that is covered in your plan.

  • Take the time to read your insurance policy. It is better to know what your insurance company will pay for before you receive a service, get tested, or fill a prescription. Some kinds of care may have to be approved by your insurance company before your doctor can provide them.
  • If you still have questions about your coverage, call your insurance company and ask are presentative to explain it.
  • Remember that your insurance company, not your doctor, makes decisions about what will be paid for and what will not.
  • Remember that your physician, not your insurance company, makes medical decisions and recommendations about what will benefit your health status.

Most of the things your doctor recommends will be covered by your plan, but some may not. When you have a test or treatment that is not covered, or you get a prescription filled for a drug that is not covered, your insurance company will not pay the bill. This is often called “denying the claim.” You can still obtain the treatment your doctor recommended, but you will have to pay for it yourself.

If your insurance company denies your claim, you have the right to appeal (challenge) the decision. Before you decide to appeal, know your insurance companies appeal process. This should be discussed in your plan handbook.

Understanding Key Insurance Terms

Copayment: An amount you pay as your share of the cost for a medical service or item, like a doctor’s visit.

Deductible: The amount you owe for covered health care services before your health insurance or plan begins to pay.

Coinsurance: Your share of the cost for a covered health care service, usually calculated as a percentage (like 20%) of the allowed amount for the service.

Premium: The amount you pay for your health insurance or plan each month.

Network: The doctors, hospitals, and suppliers your health insurer has contracted with to deliver health care services to their members.

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