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Insurance Explained

Insurance. This is way out of the norm for me to write about, but with the new year around the corner, the majority of insurance policies are about to reset. Every year this creates a great amount of tension, stress and anger among our patients, and for good reason. Health care is expensive, and deductibles add up fast. What I would like to do is explain, very generally, how “most” insurances work. As a disclaimer, all policies are different and without calling your insurance company and checking for yourself, I can’t guarantee this is how YOURS works, but I would like to “de-mistify” the insurance mess a little bit. Maybe, just maybe, you will see what we go through on our end a bit too, because it’s not really any better for us as providers. Patients and providers are on the same team here, I promise.

First thing I would like to share with you is this. John Smith walks into my office for his first appointment. He called earlier and provided us with his insurance information so we could run what we call a “benefit check” for him. Here is what we were told, by ABC insurance company.

Name: John Smith

Policy # AB 1235656AB

DOB 12/12/62

Deductible: 2000/ 1800 met

Co-pay: 0%

Co-insurance: 10%

Not too shabby, right? John Smith has a $2000.00 deductible, of which he has used up $1800. After $200 dollars more of deductible he will owe just 10% of his allowed maximum contracted billing rate for services. Only here is what is printed at the bottom of the email containing this information from ABC insurance company.

“We cannot guarantee or verify the accuracy of the information contained in this email.” WHAT?!?!?!?!? Let me say it again. “WE CANNOT GUARANTEE OR VERIFY THE ACCURACY OF THE INFORMATION IN THIS EMAIL.” Why not?!?! So what happens? We start treating John Smith and he gets a bill from us for 1200.00 and he is LIVID because we told him above. So I get on the phone and call ABC Insurance and I ask what is the deal and they tell me they can only talk to the member. So now John Smith gets on the phone and they tell him his deductible is 3000.00 and that he has a 50.00 co pay. Now John Smith is frustrated, if not angry, with my office.

So that’s problem one. The other problem is John will get this bill, most likely, months after I have stopped treating him because the insurance companies are not required to pay in a timely manner. They might process Mr. Smith’s claims 90 days later. So now I am talking to a client about something that happened so long ago that I don’t necessarily remember the paperwork – and so it takes me time to dig through his file and remember what transpired, and now my office staff looks like they are bumbling.

My solution to this has become doing the benefit check, giving people a written copy and then encouraging them to call and verify it with the company. Then if they choose not to, at least I did the best I can. Now that we got that out of the way, let’s define what all of this means. Remember, this is IN GENERAL. Please check your individual policy.

Deductible – Deductible is the amount of money YOU must pay before the insurance company will help you. There are exceptions to this though, and that is what makes it confusing. Well visits are covered almost always whether the deductible is met or not. Most times chiropractic care falls outside of a deductible – so co-pays for chiropractic might be $40.00 whether your deductible is met or not. Co-pays paid for office visits, well visits or chiropractic do not usually count towards your deductible. If you go to the chiropractor 10 times, a well visit, and 4 office visits that all have a co-pay of $40, and you have a deductible of $500.00, you have not met your deductible, even though you paid over $500.00 of co-pays. Co – pay is different than deductible. So if the chiropractor sends you for an x-ray on your last visit, you will have to pay the agreed upon contracted rate for that x-ray. So you paid $600.00 for those co-pays and you will owe say 220.00 for that x-ray, and now met 220/500 of your deductible. One thing to watch out for is some policies have a family deductible and some have individual. It makes a big difference. Make sure you know what type of deductible comes with your policy!

Agreed upon contracted rate – This is what I get paid. I charge 180.00 per hour for my services. Let’s say Orthonet pays me $82.00, but Federal BC/BS pays 135.00. There is nothing I can do about this. So, if you have not met your deductible, and you have Federal BC/BS, and receive a bill for my services, you will owe me 135.00, not 180.00. If I am in network with your insurance company and I try to collect 180.00 I am in violation of my contract and will be reprimanded in whatever way is stated in my contract – I may even lose my contract with your insurance company and then I will be out of network.

In/Out of Network – In network means I have a contracted rate with your insurance company that I agreed upon, which is cheaper than what I charge, and I cannot collect more that that rate. Out of network means I am owed what I charge, but your insurance will generally still pay me a percentage. It will be, however, a significantly lower percentage than what you would receive from an in-network provider. The short of it, this will be very expensive for the consumer, but may be worth it if the provider is the provider of choice for whatever reason.

C0 Pay – This is the client’s way of “paying their fair share.” I bill $180.00. The insurance company says my service is worth $130.00, but they pay $110.00. You need to cough up $20 for a co-pay. Simple.

Co-insurance – Similar to above, only you are required to pay a percentage of the bill instead of a fixed amount.

Out of pocket maximum – I think this is the number one thing that throws people for a loop. They meet their deductible of $3000.00, they come for PT and after a few weeks they receive a bill for $510.00. How did that happen? They have a 30% co insurance and an out of pocket maximum of $5000.00. So they paid a $3000.00 deductible, but now they have $2000.00 to pay in percentages of bills, which if the co-insurance is much more than 10%, it adds up quick. Once they have paid $5000.00 out of pocket, they will enjoy 100% coverage, but not until this time. And honestly most people, unless they have major surgery, never meet their out of pocket maximum.

So there is a lot to think about when you are choosing an insurance plan – and when you are sitting at the dining table trying to pick the best plan for you and your family, it is difficult. It’s not until you are in the thick of it that you may truly understand what all of this means, and then it is usually too late. Deciding whether having a lower deductible or lower bi-monthly payment is hard. Sometimes, paying more up front for the lower deductible is a wash – you pay $2000 more a year in premiums to get your deductible $2000 lower. Well that only works if you USE the insurance, otherwise you have essentially wasted your money unless you are buying piece of mind “in case” someone gets ill; but not many of us can afford piece of mind at that rate.

The best advice I can offer is to sit down with a Human Resources specialist at your place of employment, or with an insurance specialist, and have them explain the individual policies to you. There are a ton of moving parts – are you healthy, are you overweight, do you have dangerous hobbies, do you have kids, does your spouse have access to policies that may be better or less expensive than yours, should you all be on one employer’s policy or should some family members be on one and others on another? What is the right amount of money to have in your HSA? The list goes on and on and on. Make sure you know what you are buying, and remember, you are buying the policy. Buyer beware in the health insurance market – make sure you are getting the best policy for your money. We spend more time deciding what car to buy than we do health insurance, and health insurance costs a lot more than most of our cars!

To see what insurances WE accept – click here or call 878-5002 and click on insurance information