Jane Dotson
Health insurance plans only provide coverage for services they deem to be medically necessary. This means that a treatment, test, or procedure is necessary to maintain or restore a patient's health or to treat a diagnosed medical problem. The definition of medical necessity varies depending on the insurance company, the patient's location, and their specific plan. For example, Medicare and private insurers have different criteria for determining whether a procedure is medically necessary, and these criteria are based on the patient's circumstances.
| Characteristics | Values |
|---|---|
| Definition of Medical Necessity | "Medically Necessary" or "Medical Necessity" means healthcare services that a healthcare provider, exercising prudent clinical judgment, would provide to a patient. |
| Medical Necessity for Insurance Coverage | Health insurance plans provide coverage only for services that they consider to be medically necessary. |
| Criteria for Medical Necessity | The service must be for the purpose of evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms; in accordance with generally accepted standards of medical practice; clinically appropriate; and not primarily for the convenience of the patient, healthcare provider, or other physicians or healthcare providers. |
| Preventive Care | Preventive care may be medically necessary, but coverage is governed by the terms of the applicable plan documents. |
| Medicare Advantage Plans | Medicare Advantage plans are required to cover all medically necessary services under Medicare Part A and Part B but may also cover additional services that are not considered medically necessary, such as routine vision or dental, health wellness programs, hearing services, or prescription drugs. |
| Non-Coverage by Medicare | If Medicare determines that a service or equipment does not meet its definition of medical necessity, it may result in non-coverage, and the patient may be responsible for covering the full cost out of pocket. |
| Patient Payment | Even if a service is medically necessary, the patient may have to pay for some or all of the cost due to copays, deductibles, and coinsurance. |
| Experimental Procedures | Many health insurance companies will not cover procedures that they determine to be experimental or not proven to work. |
| Cosmetic Procedures | Most health insurance plans do not cover cosmetic procedures, such as Botox or tummy-tuck surgery, unless they are done for restorative purposes, such as breast reconstruction after a mastectomy or plastic surgery after an injury. |
| Medical Marijuana | Despite its legality in some states, health insurance plans do not cover medical marijuana due to its classification as a Schedule I drug with no currently accepted medical use under federal laws. |
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What You'll Learn
Preventative care
According to Cigna Healthcare, preventative care may be deemed medically necessary and covered by insurance plans. However, this coverage is governed by the terms of the applicable plan documents. In general, for a service to be considered medically necessary, it must meet certain criteria. These criteria include being for the purpose of evaluating, diagnosing, or treating an illness, injury, or disease, and being in accordance with generally accepted standards of medical practice. The service must also be clinically appropriate and considered effective for the patient's specific condition.
In the United States, most health plans are required to cover a set of preventative services, such as shots and screening tests, at no cost to the patient. This includes plans available through the Health Insurance Marketplace. However, it's important to note that these services are typically free only when provided by a doctor or other provider within the patient's insurance network. Examples of preventative services covered by insurance plans include immunizations for adults, lung cancer screening for high-risk individuals, and abdominal aortic aneurysm screening for men with a history of smoking.
Medicare Part B also covers a range of preventative and screening services, including exams, shots, lab tests, and screenings. These services help detect health problems early, determine effective treatments, and prevent certain diseases. Additionally, Medicare offers programs for health monitoring, counseling, and education to empower individuals to take charge of their health.
It is important to review the specific terms and conditions of your insurance plan to understand what preventative care services are covered and under what circumstances. By staying informed and proactive, individuals can take advantage of preventative care services to maintain their health and well-being effectively.
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Cosmetic procedures
Some cosmetic procedures can be deemed medically necessary and so are covered by insurance. For example, some insurers will cover breast reduction surgery if it is to alleviate symptoms such as chronic back, neck, or shoulder pain, skin irritation, or difficulty with physical activity due to excessively large breasts. Similarly, rhinoplasty to correct a deviated septum or breast reconstruction after a mastectomy may be covered by some insurance policies.
In the US, nearly every major insurance company acknowledges the medical necessity of transgender-related care, including gender-affirming surgery. However, letters of recommendation from a board-certified psychiatrist or psychologist specializing in transgender healthcare are required to be considered for receiving full coverage.
Some cosmetic surgery may meet the definition of a qualified medical expense if it is necessary to "improve a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease". In these cases, a Letter of Medical Necessity from a doctor or dentist may be required to use HSA funds.
Liposuction can also be covered by insurance in some cases, such as when it is part of a weight-loss program to treat specific diseases like obesity, hypertension, and heart disease. However, it is important to note that weight-loss programs aimed at improving appearance, general health, or a sense of well-being are not covered by insurance.
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Experimental procedures
Insurers' reluctance to cover experimental procedures is partly due to their nature as unproven treatments that may not meet accepted standards of medical practice. Health plans may use their medical policies to determine if a treatment is considered experimental for a specific condition. Additionally, some definitions of medical necessity explicitly exclude treatments that are "experimental, investigational, or cosmetic."
It is important to note that the criteria for medical necessity vary among different insurers. Patients can consult their healthcare providers to obtain a Letter of Medical Necessity (LMN) to support their case for insurance coverage. This document, provided by a licensed healthcare provider, explains why a specific treatment is essential for the patient's health and well-being. Patients can also ask their insurance company for an exception if a medically necessary treatment is not covered by their plan.
In the context of clinical trials, insurance companies cannot discriminate against patients for participating in such trials. However, they can deny coverage for the trial itself while continuing to cover routine care during the patient's participation in the trial. This provision is part of the Affordable Care Act, which has significantly altered the regulations governing health insurance coverage.
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Marijuana for research
Marijuana for medical reasons is a prominent "medical necessity" case. As of 2024, the medical use of cannabis is legal in 38 states and the District of Columbia, as well as three of the five US territories. However, marijuana is still illegal under federal law, classified as a Schedule I drug with "no currently accepted medical use". This classification, along with its illegality under federal law and the lack of FDA approval, means that health insurance plans do not cover medical marijuana, even if it is deemed medically necessary by a healthcare provider.
In the US, Medicare and Medicaid are federally-operated health insurance organisations that cannot cover medical marijuana due to its federal legal status. Private health insurance plans also refuse to cover medical marijuana-related visits and services, as they operate on a national level and must comply with federally-mandated coverage requirements. Even in states where medical marijuana is legal, healthcare providers cannot prescribe it, and insurers cannot cover it.
The cost of medical marijuana can be high, with patients potentially paying between $60 and $2,400 a year, even with insurance coverage. In states where medical marijuana is legal, patients must pay out-of-pocket for visits to a doctor to certify eligibility for medical marijuana use, as these visits are not typically covered by insurance. In addition, the process of obtaining medical marijuana can be costly, with various fees involved. For example, in Pennsylvania, patients must obtain a medical marijuana ID card, which requires certification from a doctor approved to participate in the state's medical marijuana program.
The classification of marijuana as a Schedule I drug creates significant barriers to research. The DEA has indicated that it is working to improve access to marijuana for research purposes, but the process of re-scheduling a drug can take years. Even if the DEA were to re-schedule marijuana, it would take a long time to accumulate sufficient research to win FDA approval for federal medical cannabis use.
Despite the challenges, there are some signs of progress. For example, in Canada, several insurers have been known not to penalise clients who use marijuana occasionally, due to the growing amount of scientific evidence regarding its benefits. In the US, some entrepreneurial companies are attempting to address the needs of patients who require access to affordable medical marijuana. Additionally, the perception of marijuana use among health insurers has evolved, with approximately 33% of major American insurers classifying marijuana users as non-smokers. This shift in perspective may lead to changes in how insurers view and cover marijuana use in the future.
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Medicare Advantage plans
It is important to note that Medicare Advantage plans do not cover everything. For example, they do not typically cover eyeglasses, hearing aids, basic dental care, or long-term care. Additionally, enrollees must pay their Part B premium, which was $174.70 per month in 2024, with higher amounts for higher-income individuals.
When considering Medicare Advantage plans, it is essential to review the specific details of the plan, including the costs, coverage, and provider network. Comparing these plans to Original Medicare and other Medicare health plan options, such as Medicare Cost Plans and Program of All-inclusive Care for the Elderly (PACE), can help individuals make an informed decision about their healthcare coverage.
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Frequently asked questions
"Medically Necessary" or "Medical Necessity" refers to health care services that a health care provider would provide to a patient, exercising prudent clinical judgment. The service must be for the purpose of evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms.
Most health plans will not pay for healthcare services that are not deemed medically necessary, such as cosmetic procedures. For example, the injection of medications like Botox or surgeries like a tummy tuck.
You can request an advance coverage decision and appeal a non-coverage decision. It is important to clarify coverage options with your doctor and insurer to make informed decisions and explore alternative solutions if necessary.
The determination of medical necessity is based on various guidelines, including state and federal benefit mandates, case management procedures, and the patient's individual needs, clinical and environmental factors, and personal values.
No, due to marijuana's classification as a Schedule I drug with "no currently accepted medical use", its illegality, and the lack of FDA approval, health insurance plans do not cover medical marijuana, regardless of state law or healthcare provider recommendations.
