Millions of people have just completed the process of selecting and signing up for a health insurance plan or are looking to sign up through a special enrollment period if they paid a penalty for being uninsured in 2014.
Once your policy is in place, it’s time to turn your attention to using it to its fullest. Health insurance comes with a set of rules and language all its own, and that can make accessing and paying for medical care more challenging than it should be. Unfortunately, not understanding how your plan works can result in higher than expected costs.
Navigating the healthcare system and saving yourself money are possible when you know what to look for and what mistakes to avoid.
Here are 5 health insurance pitfalls to watch for.
1) Confusion over insurance jargon. Studies have shown that most people can’t accurately define basic health insurance terms, such as co-pays, deductibles and co-insurance. However, understanding the meaning of these and other terms, and how they apply to the medical services you get, is important when figuring out how much your care is likely to cost.
For example, if a visit to the doctor costs $100 and your policy requires you to pay 20% in co-insurance, you would be responsible to pay $20 for that visit. Your health plan pays the remaining $80 or 80% of the visit’s total cost.
Alternatively, many types of services require a co-pay, which is a fixed fee you pay for care. For example, you may pay $10 for a prescription, or a flat $30 to see your primary care doctor.
Here’s a glossary of insurance terms you’re likely to encounter when using your plan. This, along with your plan’s benefits documents, will help you understand how much you’re likely to pay for different types of care before you seek treatment.
2) Misunderstanding your coverage. Many people mistakenly believe that having insurance means they’ll automatically get help paying for any medical service they get. That’s not the case. There are always exclusions, or services that health plans simply don’t pay for.
To avoid surprise bills, review your health plan’s Summary of Benefits as well as its exclusions sections before you go for care. This will tell you both what is and what is not covered by your policy, and any particular rules you must follow to have your care paid for.
3) Failing to check covered medications. The law requires that all health plans sold through the health insurance Marketplaces to cover at least one drug in every drug category and class.
But that doesn’t mean the particular medication your doctor prescribes is one your health plan covers. That’s why it’s very important to pay close attention to your health plan’s formulary (the list of covered drugs) so you know which medications your plan does and does not cover.
You can generally find the formulary on your plan’s website.
Also pay attention to how medications are covered. Most plans place drugs on various tiers, or levels of coverage. That means different drugs are paid for by your plan at different rates.
4) You don’t confirm that your doctor is in network. As with medications, it’s important to check in advance of going for care whether the doctors and hospitals you wish to use participate with your health plan. Going outside your insurer’s network can significantly raise your costs.
Check directly with both your health plan and your doctors and hospitals. Even if your doctors are listed as participating with your plan, check to make sure the office is taking on new patients.
5) You pay your bills too soon. After a doctor’s visit or hospital stay, you’ll receive what’s called an explanation of benefits, or EOB. The document shows the service you got, how much your provider charged, what portion of that charge your insurer paid, and your financial responsibility.
The documents generally state at the top that they aren’t bills, but many patients don’t take that to heart and end up paying too soon.
Before you pay a dime, confirm that your insurer paid its portion. It’s also a good idea to check the EOB against the bills you receive. You want to make sure the items listed on both the EOB and the bills match, and that you’re being properly charged.
Don’t hesitate to call your insurer with questions, or to file an official appeal if a medical service you believe should be covered isn’t.