How to Make Sense of Your Health Insurance Coverage

Knowing the basics of a policy can keep your confusion—and your payments—to a minimum.

How to Make Sense of Your Health Insurance Coverage

It happened again—another mysterious medical bill has arrived for treatment you thought was covered under your health insurance policy. Before the frustration sends your blood pressure soaring, here are the answers to four common questions about coverage, regardless if you have private insurance or Medicare.

Which services does my plan pay for?
The term “covered services” indicates the medical benefits that are covered under your insurance policy. While each plan differs in terms of how much coverage is provided, health insurance plans typically help cover the costs of doctors’ visits, which may include annual physical exams, cancer screenings, routine blood work and immunizations.

According to the most recent requirements by the Department of Health and Human Services, all individual and small-group health insurance packages must offer at least the following 10 essential health benefits:

  • Outpatient care
  • Emergency room visits
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment, counseling and psychotherapy
  • Prescription drugs
  • Rehabilitative devices and services for temporary or chronic conditions
  • Lab tests
  • Preventive services, which may depend on a few factors, such as your age, gender, medical history and the state where you reside
  • Pediatric services

Keep in mind that the exact amount of coverage will vary from plan to plan. If you have questions about your benefits, call your insurance company or contact your human resources representative and ask which services are partially or fully covered.

How can I tell who’s in- and out-of-network?
Physicians and hospitals who are labeled in-network have agreed through a contract to accept a discounted rate under your plan. Any doctor or facility that is considered out-of-network does not have a contract with your insurance company. Receiving their services will result in a higher out-of-pocket cost, which could be either a percentage of the bill—your coverage may pay a portion of the charges—or the entire bill. It’s important to note that additional costs from an out-of-network provider will not factor in to your annual out-of-pocket maximum expenses. To verify if a doctor or medical facility is in-network, you can either call the physician’s office directly or head to your carrier’s website and search their healthcare provider directory.

How much will I pay for services rendered?
While plans differ, there are three common out-of-pocket health insurance costs in addition to the monthly premium:

  • deductible is a set amount of annual medical costs that you must pay before your insurer begins to cover your expenses.
  • Coinsurance is the percentage of the medical costs that you will owe once your deductible has been reached. Your insurance company will be responsible for the remaining portion.
  • The copayment (or copay) is the set fee you will pay each time you visit a healthcare facility and fill a prescription.

The out-of-pocket maximum/limit is the most money you will be required to pay for covered services—including deductibles, coinsurance and copayments—during a policy period, which is usually one year. For example, in 2018, the out-of-pocket limit for an individual plan is $7,350, while the limit for a family plan is $14,700. For 2019, it's $7,900 and $15,800, respectively.

Where can I go for help?
After you have received medical assistance, you will be sent an Explanation of Benefits (EOB), a document that summarizes:

  • The latest services you have received
  • The total amount of money billed by the physician/facility
  • The amount your health insurance covered
  • The amount you will be responsible for paying

If you have any questions about your EOB, your benefits or would like to obtain an estimate of upcoming expected charges, you can contact the customer care center of your insurance company. If you purchased your health insurance through an agency, you can also contact a broker at the company. In order to understand your overall rights and protections, has outlined the current laws regarding health coverage.

Medically reviewed in March 2020.

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