The Unraveling Of Healthcare Insurance Billing: A Complex Web Of Charges And Reimbursements

Health insurance is important to have, but it can be confusing to understand. After visiting a healthcare provider, the provider will submit a bill to your insurance company, listing the services provided to you. The insurance company will then send you an Explanation of Benefits (EOB) report, which details what they did when they received the bill, including what they are and are not paying for, and why. The EOB is not a bill, but it will show a balance due. After the insurance company pays the healthcare provider, you may need to pay any remaining balance.

You may be billed due to not meeting your deductible

Health insurance deductibles can be a significant expense, and it's important to understand how they work and what to do if you can't pay. A health insurance deductible is a set amount you must pay out-of-pocket for covered healthcare services before your insurance company starts paying its share. The average individual deductible was $1,735 in 2023 and $3,057 in 2024. Deductibles vary depending on the type of plan and can range from $0 to the maximum out-of-pocket limit, which is $9,450 for a single individual in 2024.

If you don't meet your deductible, your insurance won't cover your medical expenses until you reach that amount. For example, if your deductible is $2,000 and you have an ER visit that costs $700, your insurance won't pay for that $700 until you've met your deductible. This can result in unexpected bills, especially for those who require frequent medical care or have high deductibles.

If you're struggling to pay your deductible, there are a few options to consider:

• Negotiate a payment plan: You can discuss setting up a payment plan with your healthcare provider or hospital billing department. Be honest about your situation and express your willingness to pay. Keep in mind that you may need to negotiate multiple payment plans if you owe money to different providers.
• Explore cheaper healthcare options: Look for alternative treatments or facilities that offer care at a lower cost. Free clinics or community health centres may provide care regardless of your ability to pay.
• Take advantage of open enrollment: During the open enrollment period, you can switch to a different health insurance policy with a more affordable deductible. This period is usually in the fall for employer-sponsored plans and November 1 to January 15 for individual/family coverage.
• Utilise a Health Savings Account (HSA) or Flexible Spending Account (FSA): If you have an HSA-qualified high-deductible health plan, consider contributing to an HSA to help cover future medical expenses. Similarly, if your employer offers an FSA, you can use those funds to meet your deductible.
• Access financial assistance: Many employers offer employee-assistance charity programs that provide financial assistance for those facing a one-time financial hardship.

While not meeting your deductible can result in unexpected bills, there are strategies to help manage the financial burden. It's important to carefully consider your health needs, budget, and risk tolerance when choosing a health insurance plan to find the best option for your situation.

You may be billed for out-of-network services

An out-of-network provider is one that has not signed a contract with a given health insurance plan, agreeing to accept a negotiated reimbursement rate as payment in full. A provider might be in-network with one health plan but out-of-network with another.

If you go to an out-of-network provider, you may be billed for the full amount of the service. Your insurance plan might pay part of the bill if the plan includes out-of-network coverage. But you'll be responsible for whatever isn't covered by your insurance—which will be the full amount if your plan only covers in-network care, or if you haven't yet met your out-of-network cost-sharing.

Some health plans, like HMOs and EPOs, generally do not reimburse out-of-network providers at all (except in emergency situations), which means that as the patient, you would be responsible for the full amount charged by your healthcare provider if they're not in your insurer's network.

Other health plans offer coverage for out-of-network providers, but your out-of-pocket costs would be higher than they would be if you were seeing an in-network provider.

In some cases, you may be billed for out-of-network services even if you thought you were covered. For example, your surgeon may be part of your insurance company's network, but the radiologist who reads your X-ray may not be, and you could receive a bill from the radiologist.

To avoid unexpected out-of-network charges, you can call your insurer or go to their website to see whether your plan covers the healthcare providers and services you need. Your insurer may change coverage policies at any time, but if you get approval in writing, they may have to abide by it even if policies change afterward.

You may be billed for non-preventative care

Health insurance can be confusing, and it's not always easy to understand what you will be billed for and why. You may be billed for non-preventative care for several reasons. Firstly, it's important to understand that health insurance is a cost-sharing agreement between you and your insurance company. Many insurance companies cover the costs for preventive care, such as check-ups, vaccinations, and screenings. However, for other services, you may be required to cover all costs until you reach a specified amount, known as a deductible. This means that you will need to pay for non-preventative care until you have paid a certain amount out of pocket, after which your insurance company will start contributing.

Additionally, the type of care you receive will affect how it is billed. Preventative care is typically covered by insurance without requiring a copay, while diagnostic care, which addresses new symptoms or known medical conditions, may result in separate charges that may or may not be covered. In some cases, the same service can be billed as either preventative or diagnostic, depending on the reason for the service. For example, a mammogram is typically offered as a preventative screening, but it can also be used as a diagnostic tool if there is a specific reason to suspect breast cancer.

It's also important to note that preventative care must be delivered by a doctor or provider within your insurance plan's network to be covered. If you see a doctor outside your plan's network, you may be charged for the service. Therefore, it is essential to stay within your health plan's provider network to avoid unexpected bills.

Finally, understanding billing codes and insurance adjustments can help you navigate your medical bills. Medical billing professionals use standard coding systems, such as Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS), to identify the services provided during your appointment. By familiarizing yourself with these codes and the corresponding services, you can better understand your bill and identify any potential errors or discrepancies.

You may be billed for copayments or coinsurance

Copayments and coinsurance are two types of cost-sharing measures built into your healthcare coverage plan. Copayments (or copays) are fixed fees that partially pay for medical services. They are set amounts paid for prescriptions and medical care received. The insurance pays the rest of the cost. Copayments are usually paid at the time of service and are often lower for primary or preventive care than for a specialist visit.

Coinsurance, on the other hand, is the percentage of the treatment cost that you are expected to cover. It comes into effect after you have met your deductible, which is the amount you pay for health care services before your insurance begins to pay. Once you've met your deductible, your insurer will pay a percentage of any additional covered expenses, and you will be responsible for the remaining percentage. For example, if you have 20% coinsurance with your plan, you pay 20% of your post-deductible medical costs, while your insurer pays 80%.

Copayments and coinsurance are both forms of cost-sharing, but they differ in how the costs are split. While copayments are fixed fees, coinsurance fees are not. Copayments are predetermined and outlined in your health insurance plan, whereas coinsurance fees are based on the total cost of service. This makes coinsurance less predictable than copayments.

Copayments and coinsurance are important components of your healthcare costs and can help you understand your out-of-pocket expenses. They are both included in most insurance plans and contribute to your out-of-pocket maximum, which is the highest amount you will have to pay for medical services within your annual plan.

You may be billed for prescription medications

Health insurance is a cost-sharing agreement between you and your insurance company. While many insurance companies cover the costs for preventive care, such as check-ups and vaccinations, you may be billed for other services. This is because many insurance companies require you to cover all costs until you reach a specified amount, known as a deductible. Once you reach this amount, the insurance company starts paying for covered services.

Prescription medications are one of the services that may be covered by your health insurance plan. The Affordable Care Act requires that all health plans sold to individuals or through small employers cover prescription medications. However, short-term health plans are not required to offer this coverage. It is important to check with your insurance company to see if they require you to use a pharmacy within their network.

When you pick up a prescription medication at a pharmacy, you may be asked to pay a copay before you can receive your medication. A copay is a fixed amount that you pay for covered services. Alternatively, there may be a deductible that you need to meet before your health insurance plan covers the rest of the cost.

If your insurance plan has a prescription deductible, you will need to meet this deductible before the plan starts to pay for covered prescriptions. Once the deductible is met, you will typically pay a copay or coinsurance, which is a percentage of the prescription cost.

It is important to understand how your health insurance plan covers prescription medications to avoid unexpected bills. You can review your insurance plan's formulary, or list of covered prescription drugs, to determine if your medications are covered and what your out-of-pocket costs may be.

Frequently asked questions