How to make sense of your health insurance coverage

Ever have this experience? A medical bill arrives in the mail for treatment you thought was covered under your health insurance policy. You call your insurance company for an explanation but find yourself swamped with terms and justifications you barely understand.

Before the frustration sends your blood pressure soaring, here are answers to several common questions about coverage, whether you have private insurance or Medicare.

Which services does my plan pay for?

The key term is “covered services.” This indicates which medical benefits are eligible to be paid by your insurance policy. Each plan differs in how much coverage is provided, but health insurance plans typically help cover the costs of visits to healthcare providers (HCPs). These may include annual physical exams, cancer screenings, routine blood work, or immunizations.

All individual and small-group health insurance packages offered in the Health Insurance Marketplace under the Affordable Care Act (ACA) must offer at least the following 10 essential health benefits (EHBs):

• Outpatient care (the kind you get without being admitted to a hospital)
• Emergency room visits
• Hospitalization
• Maternity and newborn care
• Care for mental health issues and substance use disorders, including behavioral health treatment, counseling, and therapy
• Prescription drugs
• Rehabilitative devices and services for temporary or chronic conditions
• Lab tests
• Preventive services (which may depend on a few factors, such as your age, sex, medical history, and the state where you live)
• Certain services for kids, such as dental and vision care

Keep in mind that the exact amount of coverage will vary from plan to plan. (Large group plans, such as those offered through employers, don’t have to cover all of these items, but many of them do.) If you have questions about your benefits, call your insurance company or contact your company benefits representative and ask which services are partially or fully covered.

How can I tell which providers are in- and out-of-network?

HCPs and hospitals who are labeled in-network have agreed through a contract to accept a discounted rate under your plan. Any HCP or facility that is considered out-of-network does not have a contract with your insurance company. Receiving their services will result in a higher cost for you, which could be either a percentage of the bill or the entire bill.

It’s important to note that additional costs from an out-of-network provider will not factor in to your annual out-of-pocket maximum. In short, the out-of-pocket maximum is the amount of spending on health care you must make each year before your health plan starts to cover services at 100 percent (more on this below).

To verify if an HCP or medical facility is in-network, you can either call the HCP’s office directly, call your health plan or visit their website and search their HCP directory, or consult with a health advocate (if your employer offers this service).

How much will I pay for services?

The first thing you will typically have to pay for health coverage is a premium. This is a monthly fee that you pay to keep your insurance, whether you use the services or not.

From there, there are typically three health insurance costs that you pay out-of-pocket, which means you must pay them in addition to the premium:

• A deductible is a set amount of medical costs that you must pay during each year before your insurer begins to cover your expenses. Once you have paid the amount of your deductible in a year, you have “met” or “reached” your deductible.
• Coinsurance is the percentage of the cost for a medical service that you will owe once your deductible has been reached. Your health insurance company will pay the remaining portion.
• The copayment (or copay) is a set fee you pay each time you visit a healthcare facility or fill a prescription.

The out-of-pocket maximum is the most money you will be required to pay for covered services—including deductibles, coinsurance, and copayments—during a policy period, which is usually one year. These amounts tend to increase over time. For example, the out-of-pocket limit for plans in 2024 on the Health Insurance Marketplace is $9,450 for an individual and $18,900 for a family.

Where can I go for help?

After you have a medical visit, you will likely receive a bill or statement from your HCP. Your health insurance company will also send an Explanation of Benefits (EOB) by mail or electronically. This document summarizes:

• The latest services you have received
• The total amount of money billed by the HCP/facility
• The amount your health insurance covered
• The amount you will be responsible for paying

If you have any questions about your EOB, your benefits, or would like to obtain an estimate of upcoming expected charges, you can contact the customer care center of your insurance company. If you purchased your health insurance through an agency, you can also contact a broker at the company. In order to understand your overall rights and protections, HealthCare.gov, the website of the Health Insurance Marketplace, has outlined the current laws regarding health coverage.