What does health insurance cover?

Not sure what does health insurance cover? Health insurance is integral to your well-being, but buying it can be confusing. Not only is the average health insurance coverage cost a lot, but understanding how it works can be frustrating.

While every policy is different, health insurance usually covers medically necessary procedures, services, and prescription medications. You’ll probably need pre-approval for specialist care, but your health insurance should cover anything a doctor says you need.

However, there are exceptions. Read on to learn what health insurance covers — and what it does not. Then, compare rates with as many companies as possible using our free quote tool to find the most affordable health insurance possible.

What Health Insurance Covers

How much does health insurance cover? Most people know they should buy health insurance, but understanding what it covers can be tricky. That’s especially true when you compare different health insurance companies, since coverage varies from one to the next.

However, most health insurance policies cover the same basic services. A health insurance policy will typically cover:

• Doctor and hospital visits: Your insurance covers visits to your general practitioner, specialist doctors, and other medical providers. You’re also covered for emergency care, surgery, or overnight stays in a hospital.
• Essential health: All health insurance plans must cover hospitalization, prescription drugs, pre-and post-natal care, and services for mental health, emergency, pediatric, laboratory, wellness, ambulatory patient, and rehabilitative health care. It also has to cover birth control.
• Preventative services: Your health insurance has to cover preventative care without charging a copay, which includes immunizations, Pap tests, and well-baby visits.
• Prescriptions: Each company has its own list of covered prescriptions, which you can usually find listed on its website. You can request that your policy make an exception if you need a medication not currently covered.
• Pre-existing conditions: While it hasn’t always been the case, insurance companies today cannot deny coverage or charge higher rates to anyone with a pre-existing condition.

Generally speaking, health insurance covers everything your doctor decides is medically necessary. As long as you need the service, your policy will likely pay at least some of the costs.

What Health Insurance Doesn’t Cover

While every insurance company is different, there are certain things most policies don’t cover. These services typically include:

• Fertility treatments: Most policies don’t cover fertility treatments, though they do need to cover testing for an infertility diagnosis. Some states require large companies to offer coverage for fertility treatments, but it can be challenging to make a claim.
• Cosmetic procedures: Services that improve your appearance are often excluded from health insurance plans. However, some cosmetic procedures might be covered by your insurance if they also serve a medical purpose.
• New technology: New methods of treatment have to pass rigorous testing before an insurance company covers them. Insurance companies usually follow Medicare’s example, and Medicare is slow to cover new technologies.
• Off-label prescriptions: Prescription drugs are approved for specific conditions but often help other disorders not listed on the label. Insurance usually rejects the use of off-label prescriptions, though your doctor can request coverage for you.

While these are the most common procedures and medications not covered by health insurance, every policy is different. It’s always a good idea to ask a representative about what your policy covers before you need to make a claim.

Read more: Can you get life insurance if you use drugs?

Understanding What Your Health Insurance Covers

Understanding health insurance is a bit confusing for most people. Unlike other coverage products like car or life insurance, there are a lot of different elements in health insurance that determine how much you’ll be billed.

To get an idea of what your health insurance covers, you’ll need to understand the following elements. Your policy might be a little different, but most health insurance plans operate in a similar fashion.

In-Network vs. Out-of-Network

Most health insurance companies have a network of doctors, hospitals, and other medical providers they work with. This network agrees to accept your insurance when you need care. If you choose to visit a hospital, clinic, or medical provider that doesn’t take your insurance, your care will be considered out-of-network.

Some health insurance plans don’t cover out-of-network medical care. Typically speaking, health maintenance organizations (HMOs) and exclusive provider organizations (EPOs) won’t pay for any care you receive from an out-of-network provider.

Other policies pay part of the costs for out-of-network care but at a much lower rate than they would for in-network. Preferred provider organizations (PPOs) and point-of-service (POS) plans usually pay at least part of the cost for out-of-network care.

Read more: Point of Service (POS) Health Insurance: What to Know & How to Save

Health Insurance Pre-Approval

Before you can receive specialty care, you’ll need pre-approval. Pre-approval simply states that a procedure, service, or medication is necessary for your well-being.

If you choose to pursue medical care that hasn’t been pre-approved, you might be responsible for the entire bill without any help from your insurance.

Health Insurance Deductible

Your health insurance deductible is the amount you must pay before your insurance kicks in. Deductibles are often expensive, sometimes costing you thousands of dollars before your insurance will start to pay.

Although they are typically costly, some policies pay for certain services even if you haven’t met your deductible. For example, health checkups or disease management visits are usually paid by your insurance regardless of your deductible status.

Your insurance also has to cover the full cost of specific preventative benefits without considering your deductible. Preventative care includes things like screenings, vaccinations, and well-child visits.

Once your deductible is met, your health insurance will cover more costs. You’ll pay either a copayment or coinsurance, depending on the service.

Health Insurance Copayment

A copayment works similarly to a deductible you pay for with your car insurance. Copayments are fixed amounts you pay for essential services, like seeing a general care provider, filling a prescription, or undergoing a test.

Unlike your car insurance deductible, copays vary by service. For example, visiting a general practitioner or pediatric doctor usually has the cheapest copay. If you need to visit an emergency room or see a specialist, you’ll probably pay a much higher copay.

You’ll start paying your copayment after your deductible is met. Until your deductible is met, you’ll have to pay the full allowable amount for any service you receive.

The amount you pay for a copayment depends on your policy. Generally speaking, plans with lower monthly rates typically have higher copayments.

Read more: Best Health Insurance Quotes

Coinsurance

Your coinsurance is a percentage you pay for health care services after you’ve met your deductible. A common coinsurance percentage is 20%. For example, if your coinsurance is 20% and your health care costs $200, you’ll pay $40.

Coinsurance applies to different services than your copay does. Additionally, your health insurance typically has an out-of-pocket maximum you can spend yearly. If you reach this maximum, you won’t pay anything else for your health care for the rest of the year.

Read more: How To Find Out if Someone Has Health Insurance: An Expert Guide

What To Do If Health Insurance Doesn’t Cover a Procedure

Although health insurance is an invaluable tool, it doesn’t cover everything. Most everyone has heard frustrating stories of people needing a procedure but being unable to pay for it because it’s not covered by their insurance.

To avoid this situation, you should read through your policy carefully. Understanding precisely what is covered and what isn’t will help you avoid getting into a situation where your health insurance doesn’t apply.

If you’ve already received a service and your health insurance denies your claim, you can file an internal appeal. Internal appeal means the company will research and review your claim. As long as the service was recommended by a doctor and deemed medically necessary, there’s a good chance your company will pay for it.

However, if the company still denies your claim, you can request a review from a third-party company.

In cases where your insurance simply doesn’t cover a service or procedure, you’ll have to pay for it by yourself. Make sure to ask your doctor about alternative treatments that might work for your condition, as they might be covered by your insurance.

Some doctors offer a discount for services that aren’t covered by health insurance. Many also offer payment plans so you can split the cost of your service into more affordable chunks.

Understanding Health Insurance Coverage: Case Studies Revealing Real-World Scenarios

Case Study 1: John’s Hospital Stay

John, a 45-year-old man, was admitted to the hospital for an emergency appendectomy. He had health insurance coverage through his employer. The policy covered inpatient hospital stays and surgical procedures.

As a result, John’s health insurance plan covered a significant portion of the hospital bill, including the surgery, room and board, and anesthesia. However, John was responsible for paying his deductible and coinsurance, which amounted to $2,500 out of pocket.

Case Study 2: Sarah’s Specialist Visit

Sarah, a 32-year-old woman, was experiencing persistent back pain. Her primary care physician referred her to a specialist for further evaluation. Sarah had health insurance coverage through a marketplace plan. The policy required pre-approval for specialist visits, which was obtained by Sarah’s primary care physician.

As a result, her health insurance covered a portion of the specialist’s consultation fees and diagnostic tests. Sarah was responsible for paying a copayment of $50 for each visit.

Case Study 3: Mark’s Prescription Medication

Mark, a 60-year-old man, was diagnosed with high blood pressure and was prescribed a daily medication to manage his condition. He had health insurance coverage through Medicare. The policy included prescription drug coverage, and the prescribed medication was listed on the plan’s formulary.

As a result, Mark’s health insurance covered a portion of the cost of his medication. He was responsible for paying a copayment of $10 for each month’s supply.

Case Study 4: Emily’s Alternative Treatment

Emily, a 28-year-old woman, was seeking treatment for chronic migraines. She had health insurance coverage through a private plan purchased on the individual market. However, the specific alternative treatment she wanted to pursue, acupuncture, was not covered by her insurance policy.

Despite her doctor’s recommendation, Emily had to pay for the acupuncture sessions out of pocket. She sought a provider who offered a discounted rate for self-pay patients.

The Final Word on What Health Insurance Covers

Understanding what does health insurance cover can be confusing, but having a solid plan is integral to your continued well-being. From basic health checkups to emergency surgeries, health insurance is an investment you shouldn’t skip.

Although many Americans rely on their workplace to provide car insurance, there are plenty of times you might need to buy your own coverage. If you need to purchase health insurance, the best way to find the most affordable plan is to compare health insurance quotes from as many companies as possible. You can use our free quote comparison tool to get started on finding cheap health insurance coverage.