Confused about what you owe after a doctor’s visit? Understanding your medical expenses and your health insurance isn’t always easy at first, but once you break everything down, it’s a fairly simple process. One part of the process that you should know about is insurance reimbursement and what it means for your wallet.
What Is Reimbursement Insurance?
Insurance reimbursement is the money paid to a healthcare provider to cover the expenses of the services provided. The provider could be your family doctor, the hospital, a diagnostic facility, etc. This repayment is charged by the healthcare provider after a medical service is completed.
For most people, a health insurance provider or government payer, such as Medicare, will pay a portion or all of the healthcare costs. However, there are several factors that determine what you pay as the insured—the policies of your insurance provider, the health plan you have, the medical clinic or professional you went to, and what you’ve already paid throughout the year can all affect how the money is reimbursed.
How Does Insurance Reimbursement Work?
The system of reimbursement works like this: once you’ve visited your doctor or had another service fulfilled, like a scan or bloodwork, then the healthcare provider will bill your insurance provider. The insurance provider can then either reimburse you as the insured party or pay the provider directly for services performed. The insurance provider will do their own negotiating with the healthcare provider for payer reimbursement rates. Some hospitals or providers may not agree to work with certain insurance companies if they won’t pay a certain minimum.
Keep in mind here that “coverage” doesn’t necessarily mean the insurance provider will make the full reimbursement—it all depends on the cost of the service and the conditions of your health insurance policy. For a lot of medical services, your insurance may cover a larger portion of the expense, but you as the insured are still obligated to cover the copayment or coinsurance, which should be outlined in your insurance plan and official contract.
Also keep in mind that, when you do receive a bill, it should clearly state the name of the service, the total cost of the service, and the money you owe of that total cost.
Beware of Balance Billing
If a healthcare provider, clinic, or hospital accepts your insurance for a service, the terms of what the insurance will pay have already been agreed upon. This means that you shouldn’t be charged with additional costs outside of a co-payment or co-insurance—unless you were informed about what you owe beforehand. If you are surprised with a bill from your healthcare provider in this type of circumstance, this is called balance billing, which is illegal in typical situations.
Now, some things aren’t covered by your insurance at all. For certain services or procedures, your insurance won’t offer any reimbursement, which makes it an out-of-pocket expense that is entirely your responsibility. This is also the case if you go to a provider outside of your network, especially if there is a provider that can offer you the medical help you need that is included with your network. In a case like this, your healthcare provider could bill you additional costs beyond what your insurance offers.
What’s The Difference Between Coverage and Reimbursement?
The standard practice is to pay the healthcare provider after the service is provided or performed, which is why the payment is referred to as a reimbursement. Coverage is simply the costs that will be taken care of by your health insurance provider given that the service meets all the stipulations of your coverage plan. For example, many insurance plans offer full coverage for a yearly check-up to your primary care physician, meaning the insurance reimbursement will be billed to your health insurance provider and they will make the necessary payment.
How To Know What Insurance Is Right For You
Trying to navigate your health plan options can be overwhelming, especially when you aren’t sure what key factors you should be aware of. Here are three factors to consider if you’re trying to determine what kind of insurance or plan is right for you.
Healthcare insurance is meant to make your life less burdensome in the face of emergencies or other health crises. While some plans are excessively expensive, you also want a plan that will actually meet your needs—otherwise, you’ll be pouring money into an almost useless money pit.
Make sure the price of your plan matches the benefits. If you have a large family, a more expensive family plan makes more sense. You’ll likely meet your deductible with more people and have access to services you normally wouldn’t be able to afford for multiple people.
Co-pays & other out-of-pocket expenses
If you haven’t met a certain set deductible, you’ll be paying out-of-pocket until you do, which can add up with high-deductible plans. Certain healthcare plans also have more expensive co-pays than others, and more expensive monthly premiums for some private health insurance. Make sure you understand just what will be required of you, both what you’ll pay to have insurance and what you’ll be responsible for in different circumstances.
Health reimbursement arrangements (HRAs)
Health reimbursement arrangements (HRAs) are a more non-traditional type of health insurance that allows employers to provide non-taxed reimbursements to employees for certain medical expenses that are eligible. This account-based health plan can help with making out-of-pocket payments, monthly premiums, etc, and is designed to be used in tandem with individual health insurance coverage. Employees that offer HRAs are empowering their employees to have more control over their coverage and their finances, which should be the ultimate goal of insurance.
HRAs are just one example of additional (and sometimes atypical) options you have that you may not even know about. Finding the right coverage, the right policy, and the right provider to adequately provide reimbursement insurance can take some research, but there’s an ideal health care plan for you, your family, and your personal circumstances.
Insurance is all about protecting the people and the assets you care about—but there’s even more to learn about when it comes to de-risking your life. HNI specializes in reducing the costs and the risks in your life so that you can be more in control of your insurance. Contact us today to own your risk and become more independent than ever!