Have you reached the point in life where you seem to spend time telling others about how things were in the “good old days”? Maybe you share a story with them about how much simpler life was back in the day. Maybe you fuss and fume a bit about how much more expensive things are now and how a candy bar used to cost $0.25 (or $0.05 in my day)! There is nothing quite like having a conversation about health insurance to trigger some of these memories for people.
I started practice in 1981 and at that time, health insurance was a much different animal. There was no insurance for office visits to any type of doctor at that time. The only health insurance available at that time was known as major medical insurance. This was provided for employees by some employers as a benefit. This usually happened if you were working for a large company that employed lots of people. When contract negotiation time came around, the companies discovered that purchasing health insurance coverage for major health issues that required hospital care was relatively cheap. They also discovered that buying insurance for larger numbers of people earned them a group rate discount as well. This certainly was less expensive than paying a higher dollar per hour rate for each employee.
The large companies found that they could keep hourly wages under control by adding more insurance coverage. This was accepted by the insurance companies because they were bringing in more premiums (amount paid for the coverage). Chiropractic started to get in on insurance coverage at about this time. Chiropractors were finally included in auto insurance, workers’ compensation, Medicaid, Medicare, and then several years later for doctors’ office visits. This was the golden age for insurance for providers. We would hand write a bill that included the patient’s name, their policy number, the date of service in our office, and the amount for that service. In a few days, a check would be in the mailbox with no questions asked.
Health insurance coverage finally grew to include vision, dental, and other services. Prices to cover all these services naturally forced the price to purchase that insurance (premiums) to go up and up as people demanded more and more coverage. Inventive ways to defray the rising costs of the premiums started to show up. There were different levels of coverage that could be purchased, deductibles were introduced, and finally copays were introduced. This is when things started to get confusing for people.
Patients had become accustomed to the idea that they could go to the doctor, show an insurance card, and everything was taken care of. People were alarmed and confused by the fact that they had to pay a certain amount of money out of pocket first before the insurance would begin to pay for anything (deductible)! The idea that they also had to pay part of the doctors’ office visit out of pocket even after the insurance coverage started to pay (copays) confused and angered people even more.
Today, things like $5,000 deductibles and $40 copays are a regular occurrence. As chiropractors, we are now starting to see the insurance companies demand pre-approval for chiropractic (and other services) coverage before payment will be made. Insurance companies are now limiting the amount, type, and number of services they will pay for. Finally, we have gotten to the place where the insurance companies have capped the amount they will pay for a visit to the doctors’ office no matter what service or how many services you have done at that visit.
The good old days are gone! I really do not believe they will be back, either. This means that it is incumbent on not only the doctor but also the patient to truly understand the definitions associated with today’s health insurance as well as some of the guiding principles behind how insurance companies decide what is covered and what will not be covered. The purpose of this blog is to try to clarify and simplify this confusing subject.
Let’s start with some definitions so we can all be talking about the same thing at the same time.
Premium: This is the amount that is paid to purchase the insurance policy. This may be paid monthly, quarterly, or yearly. This amount may be partially paid by the employer as a benefit. You will likely notice that you have a deduction on your pay stub for insurance. That means that you are paying part of the premium as well.
Deductible: This is the dollar amount that needs to be paid as an out-of-pocket expense by the individual before the insurance company will pay their portion of the bill. ( Just like auto insurance). As a rule of thumb, the higher the deductible the less comprehensive the coverage.
Copay: This is an out-of-pocket portion of the bill that is due to be paid at the time of service by the patient. The insurance will pay their portion of the remaining balance. This is due every time the patient goes to a doctor. There are different copays for different services. There can be copays for PCPs (primary care physicians), SP (specialists), ER (emergency room), and there are sometimes two levels of each of those providers that have different copays.
EOB: Explanation of Benefits (or ERA electronic remittance advisory). These are notices from the insurance company that let you know what was billed, what was paid, what the insurance won’t pay (and why), and what you are responsible for. If it comes in the mail it is an EOB and if you get it as an email, it is an ERA.
HSA: Health Savings Account. This is an account that can be given to the employee as a benefit by the employer, it may be a payroll deduction that can be set aside by the employee, or it may be a combination of both. The money in this account (usually accessed by a debit card) is to be used for paying deductible and copay expenses by the employee.
In my office one of the biggest points of confusion for my patients concerns copays and deductibles. Many times, people will think that because they paid one copay they have paid their deductible and thus owe no more out-of-pocket expense for their care. Hopefully, with these definitions, you can see how these patients have misunderstood the terms.
Even with all of the above explanations, there are still points of confusion that will arise when dealing with health insurance. Most of this confusion arises when certain procedures are done in a doctors’ office and the patient ends up getting a bill for that service from the doctor. In order to understand how this happens, you will need to understand the difference between clinically relevant and medically necessary. Clinically relevant is everything that the doctor feels will be beneficial to you as a patient. This includes everything he wants to do to discover what your problem is, what he wants to do to repair the damaged area, all of the treatment necessary to restore the normal function of the injury site and rehabilitate and resolve any other associated issues.
Medically necessary is what the insurance company has deemed the amount of service that is the bare minimum to get your health and back to a functional level. Some services provided by the doctor may be considered not proven to be beneficial to the recovery process and thus denied by the insurance company. You and I may beg to differ with the company, but the bottom line is that they get the last word. An example of this would be massage therapy. You and I both know the benefits of massage. The insurance company says that they don’t see it that way.
What does this all boil down to for you as a patient? What it all means is that you are going to likely purchase a health insurance policy that has the highest benefit coverage for you and your family that you can afford. It means that you may have insurance that does not help you as much as you would like. It means that you may need to supplement coverage for our health issues partially out of your own pocket. This is a shame, and yes, it isn’t like the good old days. My best advice is for you to do all you can to keep yourself as healthy as you can, accept some out-of-pocket expenses that can do more than ease pain but will actually help restore functionality before stopping care. Finally, consider out-of-pocket maintenance care or a stretch/mobilization care program to prevent issues from arising. If this interests you call 724-285-9093 to schedule your appointment today!’