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Whether you’re kicked out of your parents’ health insurance plan or you’ve been openly enrolled for years, navigating health insurance jargon can be daunting.
Information about a plan’s coverage is not always transparent. There’s also no right answer, since the best plan for you may depend on your health status and needs, said Dr. Renuka Tipirneni, an assistant professor of internal medicine at the University of Michigan Medical School.
“It’s confusing for me, and I’m someone who focuses on the health insurance policy,” Tipirneni said. “But I have also received a surprise invoice. So I think it’s really important to stay informed and then recognize that we’re all going to make these honest and easy mistakes, and then seek help when that happens.”
Not understanding your health insurance can have consequences, including potentially facing unexpected or unaffordable costs, Tipirneni said. You could even avoid getting care if you’re not sure how much you’ll have to pay.
Here are some common mysteries. about health insurance and what you need to know to get the care you need.
Why can’t you sign up for health insurance whenever you want?
“Insurance companies don’t want people to sign up when they get sick,” said John Holahan, an institute fellow at the Urban Institute’s Center for Health Policy in Washington, DC.
“Open enrollment is to protect the insurance company against what is called adverse selection; In other words, people select insurance right at the time they need care, like buying homeowners insurance when their house is on fire,” Holahan said.
Open enrollment periods typically occur between the fall and early winter, Tipirneni said. You can also generally enroll during certain life events, such as losing insurance, moving, getting married, having a baby, adopting a child, or if your household income falls below a certain amount.
If you have a low enough income to qualify for Medicaid, insurance funded by the US government, you can enroll at any time, Tipirneni said.
Some people get confused by the difference between premiums and claims. Premiums are the monthly fee you must pay to have health insurance, even if you never take advantage of your plan for health coverage. care or medication, Tipirneni said.
A claim is the bill that a health care provider sends to the insurance company in order for the company to cover its portion of the health care service, Tipirneni said. Sometimes the provider will ask you to submit the claim to the insurance company.
A deductible may seem like a discount, but it’s not. It’s the amount you have to pay out-of-pocket for medical care before your insurance coverage kicks in, Tipirneni said.
Deductibles generally start in January. If you have a deductible of $1,000 per year, you will have to pay the full cost of any medical care until you reach $1,000. A doctor’s visit might not cost that much, so meeting deductibles could take months. If you rarely see doctors, you may not meet your deductible before the end of the year.
High deductible plans are popular because they are often paired with low monthly premiums. They may look very attractive since they seem to have the lowest initial cost, but you may they actually end up paying more, Tipirneni said. For example, if you have a plan with a $3,000 deductible but you don’t meet your deductible at the end of the year, you will have paid the full costs of all the medical care you received plus your monthly premiums.
“Sometimes it will end up being more total out-of-pocket costs for you than it would have been if you had gotten a slightly higher premium and a lower deductible,” Tipirneni said.
If you’re young and healthy and don’t have any health conditions or prescriptions, a plan with a higher deductible might make sense for you, Tipirneni said. If you have one or more health conditions, expect multiple doctor visits, or have prescription drugs, a lower deductible plan might be better.
There’s no universal rule for how many medications and advance appointments you’d need to get in a lower-deductible plan, especially since healthy people can have unexpected health needs, like car accidents or sports injuries.
“All you can do is guess how much health care you will use next year,” Tipirneni said.
Once you’ve met your deductible, you’ll typically pay a copay with each doctor visit, a flat rate determined by the type of insurance you purchase. The rest of the bill is usually covered by insurance.
Different services, such as doctor visits and therapy appointments, may have different copays, since insurance plans cover different parts of each service, Tipirneni said.
Out-of-pocket costs are a general term for everything you pay on top of the premium, Tipirneni said, so copays, deductible, coinsurance and maybe more.
Some insurance companies may require you to also pay coinsurance, a percentage of the bill that you pay even after you’ve met your deductible, while the insurer does the rest.
Some policies have out-of-pocket maximums, which limit the total expenses you have, Holahan said.
Knowing which services are covered by a plan can be confusing, since that can change every year, Tipirneni said.
All plans have a list of covered benefits that are included in a handbook or other information provided upon enrollment, Tipirneni said.
Sometimes plans don’t cover certain conditions or problems that you think they do, Holahan said. For example, a plan may cover a hearing exam but not hearing aids.
“If you’re not sure, call the number on your health insurance card to talk to your health plan and ask them how much it will be or if it’s covered,” Tipirneni said.
An in-network health care provider has predetermined agreements with their insurance company about what they can charge for their services, while an out-of-network provider has no such contract.
“If there are doctors and hospitals that are really important to you, you may want to choose the plan that has them in the network,” Holahan said.
Online provider directories or networks published by insurance companies can help you see if your current doctor is already in the network.
If you have a major prescription drug, check your plan’s drug formulary, which is the list of drugs covered in whole or in part by insurance. The extent to which a plan covers certain services or drugs can change, so check this every year, Tipirneni said.
Insurance plans may cover out-of-network providers to some degree, but typically much less than they will cover in-network providers, he added.
This can be a problem if you need to see a specific specialist or are away from home. If you have time before you travel, ask your health insurance company if there are in-network providers or hospitals at your destination so you can pay less for any unexpected care, Tipirneni said.
If you get an “explanation of benefits” statement and you’re not sure what it is, relax, it’s not a bill. It’s just an overview of which parties pay what.
If you get a surprise bill, for example, a surgery that involved multiple providers, some of whom you didn’t know were out of network, Tipirneni recommends that you appeal that bill with your insurance company or the hospital.
“Usually with those conversations, you can negotiate the amount,” he said. “Some legislation has been passed, and I think more will come, hopefully, to try to make that happen less frequently and make it more transparent so that people can make those decisions about where to go for care in a more informed way. .”
If you need more help, health insurance navigators can help you determine which plan is right for you. Health insurance agents can do the same, but they may have an incentive to offer some plans over others, Tipirneni said.
If you’re signing up for government health insurance, you can talk to staff who will help you determine if you’re eligible in the first place. The Affordable Care Act website has search functions for local help.
If you’re signing up for work-provided health insurance, a human resources staff member might explain the plans or give you materials, Holahan said.
“The more you can try to do your homework in advance when choosing a plan, and if you need care, the better informed and prepared you will be, hoping you don’t pay more than you should,” Tipirneni said.