Health insurance is becoming more costly and more confusing. As an informed consumer, you should know the most common terms and definitions in your health plan.
A premium is the payment you make to the insurance company to keep your health plan active. If your health insurance is through your employer, the premium is most likely deducted from your paycheck during the benefit year, i.e., a consecutive 12 months of insurance coverage. Your annual accruals of your deductible and out-of-pocket maximum reset at the beginning of each benefit year. Most plans follow a calendar year from Jan. 1 through Dec. 31, but can follow any sequence. For example, most teachers have a benefit year of July 1 through June 30.
A deductible is the amount of money you must pay toward your medical bills before your insurance starts pitching in. Your health plan will assign charges to your deductible based on the allowed amount, which is determined by your health plan. As long as the provider is in-network with your plan, the allowed amount is all you will be responsible for.
The difference between the allowed amount and the total charges for the service will be a contractual adjustment, or write-off, which the provider must apply per the in-network contract. Preventive services, such as an annual physical or mammogram, are usually excluded from the deductible, so your insurance will pay for 100 percent of the charges with no cost to you.
Once your deductible is met, the co-insurance is a percentage of the allowed amount that you will be responsible for. If you have a 20 percent co-insurance, you will be responsible for 20 percent of the allowed amount and your health plan will pay the remaining 80 percent. You will continue to pay the co-insurance until you have reached the out-of-pocket maximum, which is the most amount of money you will pay toward your medical bills for allowed charges in a benefit year.
Some plans offer co-payments for office visits to your primary care physician and specialists. A co-payment is a flat rate you pay that does not apply toward your deductible, but may apply toward your yearly out-of-pocket maximum. Check your benefit book or call your insurance company to ask if your plan assigns any co-payments, and if so, how those co-payments affect your yearly out-of-pocket maximum.
If a service is deemed non-covered by your health plan, the charges will not go toward your out-of-pocket maximum. Other exclusions to your out-of-pocket maximum might include an emergency department access fee, charges from balance billing, or denied services from lack of precertification. These last three terms refer to different things:
An ED access fee is not the same as a flat-rate co-payment. You are responsible for paying the ED access fee – plus any remaining deductible and co-insurance in your out-of-pocket maximum – each time you visit the ED.
Balance billing means the amount a non-contracted provider charges you. The difference between the allowed amount and the total charges, instead of being contractually written off, could be billed to you if you receive services outside your health plan’s network.
Pre-certification, also referred to as pre-authorization, is approval from your health plan to have treatment based on medical necessity. If the treatment is supported, your health plan will issue the provider an authorization number and will often include a date range in which the services can be performed.
Any non-covered charges, balance billing, or pre-certification denial can be appealed to the insurance company. An appeal is a written disagreement sent to your health plan for reconsideration.
When appealing a balance bill from an out-of-network provider, it helps to explain the circumstances. For example, perhaps you were seen in the Emergency Department, and the physician who treated you was non-contracted.
If you are appealing a non-covered charge or precertification denial, the best argument you can make is the medical necessity of that service. Include copies of your medical records and letters from your physician to help support your case. Call your insurance company to find out the correct appeals address as well as any time limitation or deadline to file an appeal.
A final tip: Before seeking medical treatment, make sure the service will be covered by checking your benefit book or speaking with a Human Resources representative with the company for which you work. You might also call your insurance company to ask a customer service representative in the benefits department. Be sure to write down the date and time of the call; the name of the representative you spoke with; and a reference number. This information will be particularly important if you decide to send an appeal. FBN
By Stephanie Timonen
Stephanie Timonen is a patient advocate at Northern Arizona Healthcare.
Northern Arizona Healthcare is creating healthier communities by providing wellness, prevention and medical care through Flagstaff Medical Center, Verde Valley Medical Center, Verde Valley Medical Center – Sedona Campus, Verde Valley Medical Center – Camp Verde Campus, Northern Arizona Healthcare Medical Group – Flagstaff, Verde Valley Medical Clinic, the Cancer Centers of Northern Arizona Healthcare, Northern Arizona Healthcare Orthopedic Surgery Center, EntireCare Rehab & Sports Medicine, Weight Management Clinic, the Heart & Vascular Center of Northern Arizona, the Sleep & Pulmonary Center, BeWellNow, Guardian Air and Guardian Medical Transport. We also provide comprehensive imaging, laboratory and pharmacy services throughout the region. Many of the services we provide, including Fit Kids of Arizona, The Taylor House and Valley View Care, receive major funding through the NAH Foundation.
For more information on Northern Arizona Healthcare programs and services, visit NAHealth.com. “Like” NAH at Facebook.com/NorthernArizonaHealthcare.
