Regardless of where you stand on the spectrum of “Best Thing Ever!” and “Socialism, Kill It With Fire!”, the Affordable Care Act (or Obamacare) has pretty much succeeded in terms of its goal to dramatically increase the number of insured in the country. Hooray! Everyone has insurance and life is wonderful!
Here’s the thing, though. For many of the newly insured, this is now the first time they have had medical insurance. Or maybe you’re a young adult who is off your parents’ plan and fending for yourself for the first time. If you’ve never dealt with it before, it can be as confusing and frustrating as trying to find a joke in a Jeff Dunham routine. Hell, it’s only because I’ve been working in the health care industry the past couple years that I have a handle on how crazy medical insurance is. Unfortunately, most people don’t have that benefit, and don’t realize things like…
There Are Multiple Ways Your Insurance Can Make You Pay
When most people look at health insurance coverage, they tend to focus on the premium, or the monthly payments you make to your insurance. Think of it like a subscription fee, only instead of getting unlimited movies streaming to your computer, you get the promise that if shit gets real, the insurance company will help you with the medical bills. And since you have to pay the premium whether you go to the doctor or not, people predictably seek out low premium plans, thinking they are being thrifty shoppers and getting a good deal.
But the premium is just the beginning. Despite paying that every month, insurance companies can still make you pay for most, if not all, of the bill if you don’t pay attention. They break down into three types of cost:
Copays – Most people are familiar with copays, a small, flat fee that you pay upfront when you go to the doctor’s office. Like a cover to get into a bar but instead of serving alcohol they give you colonoscopies.
Deductable – This is the big one. A deductible is the amount of money you have to spend yourself before the insurance company will start making payments. This is in addition to the premiums you have to pay every month. Oh yeah, remember how I said most people focus on the premiums and think having a low premium is good? The trade-off is that low premium plans tend to have ridiculously high deductible amounts. Like, five or six grand high for an individual (for family plans, the deductible could easily be over ten grand).
So yeah, you may only be paying $60 or $70 per month for the premium, and one routine exam a year is pretty much covered no matter what, but expect a hefty bill for anything else. And did I mention that prescriptions often have their own separate deductible? And that it resets at the calendar year? So if you start your coverage in October and pay towards your deductible, come January you have to start all over. Insurance is fun!
Coinsurance – Let’s say you meet your deductible for the year. Now you won’t have to pay for anything else, right? HA! It’s like you think the insurance companies care about you. No, more likely than not once the deductible is met your plan shifts to a coinsurance cost share. Typically this is factored as a percentage, where your insurance pays X percent and you are responsible for Y percent.
The breakdown and amounts vary from plan to plan, and it’s much better than having to pay for everything, but you are still shelling out money until you meet your out-of-pocket maximum, another set amount that varies. Once you reach that, you bare no further liability. But about the out-of-pocket maximum…
Not Everything You Pay Applies To The Maximum
I should first point out that not all plans have out-of-pocket maximums. If it doesn’t, you could end up paying at least partial costs of services forever and ever. Most plans do, though, and as I said before, the amount of your out-of-pocket maximum varies from plan to plan. It seems simple enough. The out-of-pocket maximum is the most you are allowed to pay out of pocket. This is actually a really great safeguard for the insured. If you need to have a surgery that costs $10,000, but your out-of-pocket max is $5000, then the most you have to pay is the five grand, saving you the other $5,000. Do you even know how much Taco Bell that can get you?!
But that puts the insurance on the hook for everything once the maximum is met, and they don’t particularly care for that. That’s why they have their own clever ways of prolonging you from meeting that max. For starters, copays almost never apply to the out-of-pocket max. But wait, there’s more! Some plans don’t count your deductible towards the max. In that case, if you have a $1,000 deductible and a $5,000 out-of-pocket maximum, you actually will have to pay a total of $6,000 out-of-pocket instead of the five grand you might reasonably assume. And sometimes what you pay toward prescriptions may not count towards it, either. It’s almost like the insurance companies don’t want to have to pay for anything.
Of course, this is all assuming that your services are covered, because…
No Insurance Covers Everything
One thing I always hear from people when they get a bill is, “I shouldn’t have a bill, my insurance covers everything!” The idea of an insurance covering everything is misperception, similar to humans only using 10% of their brains or Megan Fox being an actress. No insurance, no matter how good, covers everything.
Some things are obvious. Insurances do not cover elective services, so any plastic surgery or liposuctions are coming out of your pocket. You don’t get to be one of the beautiful people for free, after all. Fertility treatments of any sort are also usually non-covered services. But then there are things you might not expect. Well-child visits for children are covered, but the developmental test usually done as part of it normally isn’t. Why is that? Fuck if I know! And if you know someone who is on Medicare, it won’t cover any self-administered drugs for outpatient services (unless they also have Medicare part D). Sometimes there is a limit to the number of a type of service you can have for the year. You only get one routine visit with your physician, for example. Physical therapy usually caps out after so many visits, and then they are non-covered.
Insurances will also label services as non-covered if they consider them “experimental” or “not medically necessary”. Honestly, I don’t know how insurance companies determine what is medically necessary or not. A patient once had a torn ACL and needed knee surgery, and their insurance said it was non-covered because it wasn’t medically necessary. How they came to that conclusion is anyone’s guess, but my money is they were drunk on vodka and cough medicine.
This left the patient with the options to either suck up the costs or appeal the insurance company’s decision, which would involve collecting all of her medical records and notes from her doctor and surgeon and who knows how many hours of her life. I’m not sure what ultimately happened, but the point is that her insurance was being as helpful as a Paula Deen is to a nutritional diet.
None of this is to say you shouldn’t get insurance. FOR THE LOVE OF ZEUS, GET INSURANCE. I have seen too many people have their lives catastrophically upended because they needed a surgery or some other service but didn’t have any coverage. What I do want to get across is how much you need to pay attention when you are picking insurance plans, and even once you’ve selected one, because if you don’t you will get screwed by our for-profit health care policies. Just as our Founding Fathers intended.