Orlando Harmon
Understanding how insurance is applied to hospital bills can be a complex process. The billing procedure depends on the type of insurance and the nature of the medical care received. For instance, emergency room visits, ambulance services, and specialist consultations within a hospital may each be billed separately. In the United States, the No Surprises Act, effective from 2022, offers protection against unexpected out-of-network charges for emergency medical services. Coinsurance, copayments, and deductibles are other factors that influence the application of insurance to hospital bills. Coinsurance refers to the percentage of costs covered by the patient, while copayments are typically small fixed amounts paid for outpatient services. Deductibles are annual out-of-pocket expenses that must be met before insurance coverage begins. When faced with financial hardship due to medical expenses, individuals can explore options like emergency funding, short-term loans, and special grants to supplement their insurance coverage.
| Characteristics | Values |
|---|---|
| Protection from unexpected out-of-network bills | The No Surprises Act is a federal law that protects individuals from unexpected out-of-network charges for emergency medical services. |
| Coverage for emergency care | If your health insurance covers emergency care, you are protected from paying more than the in-network "cost-sharing" rate. |
| In-network coverage after provider leaves the plan's network | You may be eligible for 90 days of in-network coverage after your provider leaves the plan's network. |
| Deductible | The amount you must pay before insurance coverage begins; varies by policy. |
| Coinsurance | You may be required to pay a percentage of the total costs, e.g., 20% if your insurance company pays 80%. |
| Copayments | A fixed amount, typically $5 to $30, paid at the time of an outpatient visit. |
| Maximum out-of-pocket (MOOP) expense | The maximum amount you'll pay for medical costs in a given period, usually a calendar or plan year. |
| Ambulance services | Generally not covered by billing protections in the No Surprises Act, and may be charged at out-of-network rates. |
| Vision and dental insurance | Not subject to the billing protections of the No Surprises Act. |
| Worker's compensation | If injured at work, only the insurer providing worker's compensation coverage can be billed. |
| Car accidents | The hospital is required to bill your car insurance first, and can bill your health insurance for any remaining balance. |
| Multiple bills | You may receive separate bills from different providers involved in your care, such as specialists or ambulance services. |
| Financial assistance | Some universities offer financial support for students facing medical-related financial hardship. |
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What You'll Learn
Understanding your medical bills
Understanding the Components of a Medical Bill
Medical bills often contain codes, descriptions, and prices that can seem confusing. Here are some key components to look out for:
- Name and Address: Ensure that your name and personal information, as well as that of the provider or facility, are correct.
- Statement Date: This is the date the bill was printed.
- Account Number: This unique number is assigned to you by the provider or facility. Use it when making payments to ensure proper credit.
- Description of Services or Supplies: Verify that the listed services or supplies match what you received on the specified dates. Descriptions can be general, contain abbreviations, or include complex medical terms or billing codes. Contact your provider if you need clarification.
- Costs of Services or Supplies: Understand the different amounts listed, such as total charges (the full price) and allowed amount (the maximum amount your insurance plan will pay). If your provider is out of network, you may need to pay the difference.
Explanation of Benefits (EOB)
If you have health insurance, an EOB is a notice from your health plan that details the costs of your care, including the services received, dates, and amounts your plan will pay and any outstanding amounts you owe. Not all insurance companies provide EOBs, but they can be very helpful in understanding your medical bills. Compare the EOB with your bill to ensure you are being charged correctly.
Deductibles and Coinsurance
Your annual deductible is the amount you need to pay before your insurance plan starts contributing. Once you meet your deductible, your insurance company will cover a portion of your medical costs for the rest of the year, depending on your plan. Coinsurance refers to the percentage of costs you may be required to share with your insurance provider. For example, your insurance may cover 80% of the costs, while you are responsible for the remaining 20%.
Disputing Errors
Errors on medical bills are not uncommon. Review your bills closely and contact the billing office if you identify any issues or need clarification. Keep in mind that you may receive separate EOBs and bills for each type of service or provider, and it is important to keep these records organized. Additionally, you can contact your insurer to obtain cost estimates for different healthcare providers, as fees can vary significantly for the same services.
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Coinsurance and copayments
When it comes to health insurance, patients are often required to pay some costs out of pocket. Copayments and coinsurance are two common out-of-pocket expenses.
Copayments, or copays, are upfront fees that are paid each time a service is received. They are fixed costs, meaning they are predetermined rates based on the type of service and the health insurance plan. Copays are paid at the time of service and do not count towards the deductible. For example, a patient may have a $50 copay for in-network specialists, meaning they would pay $50 for a specialist visit instead of the full specialist bill. Copays are usually outlined in the terms of the insurance plan.
Coinsurance, on the other hand, is a percentage of the total cost of a service that the patient pays after meeting their deductible. It is calculated as a percentage of the total cost of services and varies depending on the type, size, and scope of services. The coinsurance rate is always the same, regardless of the service or procedure. For example, with an 80/20 health insurance plan, the insurance company covers 80% of the cost, and the patient is responsible for the remaining 20%. The higher the coinsurance percentage, the higher the patient's share of the cost.
Both copayments and coinsurance contribute to the out-of-pocket maximum, which is the maximum amount a patient will have to pay out of pocket in a given time period, usually a calendar or plan year. Once the out-of-pocket maximum is reached, the insurance company will cover 100% of the medical expenses for the remainder of the period.
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Immunizations and other non-covered charges
In the context of immunizations, Mrs Jones' insurance plan, for example, did not cover immunizations. As a result, she was responsible for paying the charges related to the immunization administration ($10) and the cost of the vaccine ($90). These charges were listed separately under "Charges Not Covered" on the EOB, indicating that they were not covered by her insurance.
It is important to note that insurance coverage varies between different plans and employers. Therefore, it is essential to carefully review your insurance policy to understand what services are covered and what charges may be excluded. This information can be found in the member handbook or by directly contacting the insurance company.
In some cases, you may receive a bill from the healthcare provider for the non-covered charges. If you have questions about why certain charges were not covered by your insurance, it is recommended to contact your insurance provider directly. They can provide clarification and assist you in understanding your benefits and coverage limitations.
Additionally, it is worth mentioning that, in certain instances, you may be able to file an "appeal" with your insurance company if you disagree with their decision on covering specific charges. However, filing an appeal does not guarantee that they will pay more, but it initiates a review process for reconsideration.
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Surprise medical bills
Before the No Surprises Act, if you had health insurance and received care from an out-of-network provider or facility, your health plan may not have covered the entire cost. This could result in higher costs than if you had received care from an in-network provider. In addition to any out-of-network cost-sharing, the out-of-network provider could bill you for the difference between the billed charge and the amount your health plan paid, unless banned by state law. This is called "balance billing".
The No Surprises Act, which came into effect on January 1, 2022, protects people covered under group and individual health plans from receiving surprise medical bills when they receive most emergency services, non-emergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance service providers. It establishes an independent dispute resolution process for payment disputes between plans and providers and provides new dispute resolution opportunities for the uninsured and self-pay individuals.
If you don’t have health insurance or choose not to use it, you will get a “good faith” estimate of how much your care will cost before receiving treatment. If the billed amount is at least $400 above the good faith estimate, you may be able to dispute the charges. If you have insurance and your health plan denies all or part of a claim, you can appeal that decision.
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Ambulance charges
In the case of ambulance charges, it is important to first get an itemized bill to identify and challenge any individual charges. Towns typically negotiate mileage rates, so it is worth checking if a neighbouring community has a lower rate that you could suggest paying. Even if the ambulance service is out-of-network, insurance plans may still pay a portion, so it is important to verify that the bill has been processed through insurance. If the insurance company has paid only a small part of the bill, it is worth calling them to ask them to pay more.
If you have Medicare, ground ambulance transportation may be covered by Medicare Part B (Medical Insurance) when travelling in any other vehicle could endanger your health. Additionally, Medicare may pay for emergency transportation in an airplane or helicopter if rapid transport is required. In some cases, Medicare may also pay for medically necessary, non-emergency ambulance transportation with a written order from a doctor or healthcare provider.
In California, a new law has been introduced to ban surprise ambulance bills, which will require patients to pay only the equivalent of what they would have paid for an in-network service. While this law does not apply to the roughly 6 million Californians enrolled in federally regulated health plans, it is a step towards ensuring that people are not put into debt by unexpected ambulance charges.
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Frequently asked questions
You may receive a bill for charges that were not covered by your insurance. The amount covered by your insurance depends on your specific policy. You may also have to pay a deductible, copayment, or coinsurance.
Coinsurance is the percentage of costs the patient has agreed to pay. For example, if your insurance covers 80% of eligible expenses, you may be required to pay the remaining 20% as coinsurance.
Contact the hospital's billing office to see if they can reduce the charges or set up a payment plan. If you still can't pay, look into financial support resources, such as emergency funding or short-term loans.
