Basics of Health Insurance Benefits

Having to simplify this has been a challenge

The number of variables when trying to quantify potential explanation of benefits has been a complete crap shoot. The variables are infinite. But to move onto the next part we have to have a basic understanding of what we are looking for when you schedule a service.

Here is the list I would have to answer every scheduled service regarding benefits

• Is the plan active and eligible for service on the date of service?
• Deductible
• Out of pocket
• Co-insurance
• Copay
• In network or out of network (another blog post)
• Valid and billable code (another blog post)

Active and eligible at time of service both need to be answered.

A surgery scheduled in November 2018 for February 27th 2019, and the insurance (say United Healthcare) will give us all the information right down to authorizing service. Come January, your plan changes from United Healthcare to Aetna for plan year 2019.

United Healthcare is inactive and you are not eligible on the Date of Service

• Your authorization is not longer valid either.

Aetna is active and you are eligible on the February date of service.

• But they might not see you active until January 1st or maybe even a week into the new year for really bad transitions.
• You might get phone calls about your insurance not be valid because all automated systems have yet to update and or your old insurance causes problems with the hospital or clinics automated eligibility programs.
• If you need an authorization for the service, we have to start all over again to obtain it through the Aetna review process.
• The network status for Aetna may mean the doctor and or facility are no longer in network or even contracted to provide services.

*** Remember that whole business of having your newest insurance card and looking at your mail ***

Deductible

The deducible is what you have to pay in most cases before your insurance starts to pay stuff

This is not always the case, if your plan covers certain wellness things like your annual doctor visit or a colonoscopy every 5 years.

The deductible can or might not be applied towards your out of pocket

You may have a different deductible for different network statuses

In Network deductible could be $1500 and an out of network deductible could be $7500

The out of network deductible may not apply to an out of network deductible

Out of pocket

The out of pocket is the most you will pay in a year.

This can also have different amounts for in network verses out of network

The deductible can or might not apply to the out of pocket depending on the plan

Coinsurance

Coinsurance is the percentage of charges you will pay between meeting your deductible and filling in your out of pocket cap

After the out of pocket is paid the insurance company pays 100% and your coinsurance is 0% (nothing) in most cases.

Coinsurance can vary by network status

Copay

Copay can be what you pay at minimum for a service

It will be different depending on the service and network

For example my previous employer

$20 copay for non-hospital clinics and doctors

$0 copay for direct hospitals and clinics

$75 first emergency room visit

$125 second ER visit

$180 for each visit after the 3rd visit

Now putting it all together:

The facility I worked at was contracted with our local blue (blue cross blue shield) Premera.

Providence had Premera plans. Our automated systems would show the plans as in network when we were actually out of network.

Let’s take a random charge - $10,000 surgery

In network benefits

$150 deductible, $2500 out of pocket, 20%/80% coinsurance

$10,000-$150(deductible)=$9850. 20% of $9850 = $1970. Your deductible plus your 20% = $2120 out of pocket for this procedure.

$10,000 but you have met the deductible and $1750 of the out of pocket. Your total out of pocket would be $750 for that same service (assuming your deductible is rolled into your out of pocket). 20% of $10,000 is $2000. You only have $750 of your $2500 out of pocket left. You will pay $750 because that is the max out of pocket.

But Providence is out of network

Out of network benefits were something like

$500 deductible, $10,000 out of pocket and 50%/50% coinsurance – yes, it can be that crazy different.

And if your out of network benefits are separate then the in network so neither counts towards the other.

$10,000 - $500 = $9500. 50% coinsurance of $9500 is $4750. Your out of pocket is $500 deductible plus $4750 coinsurance comes to $5250. Remember your out of network out of pocket is $10,000.

Conclusion 

I think that’s terrifying enough for one day. I will cover network status and other stuff, but I am trying to keep this simple and not overwhelming. Knowing the difference just in this example is a $3,130 savings.

I have seen bigger numbers then this under these circumstances. And this is only an example. The numbers are close to what I have worked with but I think you get the idea. When I start getting into Networks and codes, it will get worse 😊