Health insurance 101

February 3, 2012 12:46 PM

I have health insurance for the first time... what do I need to know?

I just got health insurance through my school. I've never had my own health insurance -- since coming off my parents', I've always paid out-of-pocket. I don't understand how health insurance works. What's the best way to understand the things that everyone knows about it?

posted by DoubleLune to health & fitness (11 answers total)

I'd say the first thing you need to figure out is what kind of plan is it? Catastrophic only? HMO? PPO? Traditional indemnity (unlikely). That will affect your choices of doctors, and how you would go about paying your bills (co-pays, or possibly in some cases how much you will have to pay upfront before the insurer pays you back).
posted by Calloused_Foot at 12:50 PM on February 3, 2012

Make sure you learn the difference between in-network and out-of-network doctors.

Same with how they handle specialists. Some require a referral submitted ahead of time, others don't.
posted by spinifex23 at 12:51 PM on February 3, 2012 [1 favorite]

Find out if the plan has an annual deductible (the deductible is the amount you pay each year before the medical plan begins to pay for expenses) and what the co-insurance is (Once you have paid that deductible, the plan pays a percentage of the remaining covered medical services). I used to be on a plan that had a $200 deductible, and after that, my plan paid 90% and I paid 10% until I reached my out of pocket maximum for the year- I didn't realize this at first, so it really confused me the first time my doctor's office sent me a bill for services that were part of my deductible. Now I'm on a plan with no deductible that covers 100% of in-network charges (in exchange for a much, much higher monthly premium).
posted by ThePinkSuperhero at 1:01 PM on February 3, 2012

There really are so many different kinds of plans that there's no one-size-fits-all answer to this question. Does your school not have a counselor of some kind who can sit down and walk you through this?

If you got a brochure of some kind explaining the plan and are just confused by specific terminology, you could give us some examples of the things that are confusing you and we could perhaps help. But otherwise it's really shooting in the dark.
posted by yoink at 1:24 PM on February 3, 2012

For services, you will get billed for copays, deductibles, etc. If these bills are too high for you to pay off at once, be very proactive and call the billing depts of the various providers and work out a payment plan. It can be very low, but they need to hear that you are committed to making regular payments. If you do not do this, you will have collection agencies on your tail.

Usually all it takes is one call, and a lot of stress will be avoided.
posted by Danf at 1:48 PM on February 3, 2012

The times I've had health insurance through school I've always had to go through student health services. In general I just used them, but if I wanted to see a specialist I had to first see someone in student health for a referral.
posted by mandymanwasregistered at 1:54 PM on February 3, 2012

If you'd feel comfortable doing it, you'd probably get much better answers if you told us some details about your new health insurance plan. Usually you get a one-page description when you sign up--letting us know whether it's an HMO, PPO, POS, or HDHP plan would be helpful, as all of those work somewhat differently. Also telling us what the deductible, copayment, and co-insurance are for your plan are would help us give you better advice.

However, here's the 1,000-foot view of health insurance:

1. Like other types of insurance (say, car insurance), you pay a monthly premium to be insured and this protects you from having to pay for everything yourself in the event of illness or emergency. Like car insurance, paying a premium doesn't mean that every cost is taken care of--just like your car insurance won't pay for regular oil changes or gas, health insurance generally doesn't cover every expense related to your health. You need to understand what the "covered benefits" are for your plan. Regular health insurance usually covers things like doctor visits, lab tests (sometimes only if your doctor can show they are "medically necessary"), x-rays, hospital stays, and urgent care or ER visits. It may or may not cover prescription drugs, you definitely want to figure that out. It will almost never cover things like dentists, optometrists, or glasses. Student plans are notorious for excluding things like maternity coverage or coverage for injuries sustained while playing a college sport. You probably want to know that before taking up intramural rugby!

2. Also like other types of insurance, you're generally expected to pay part of the cost of your care, especially in the beginning. A deductible is the amount that you have to pay during the year before insurance starts covering any part of your medical costs; this can range from a few hundred bucks to several thousand. Co-insurance means that your insurance company promises to pick up a certain percentage of the cost of medical care, but you are responsible for the rest (for example, insurance pays 80% and you pay 20%). Copayments are a set amount (like $20 for a doctor visit, or $500 for an ER visit) that you have to pay regardless of the total cost, and insurance picks up the rest. Generally, insurance policies usually have both a deductible and coinsurance or copayments; in other words, you may have to pay in full for the first few doctors visit and then after that for only a portion. You'd almost never see coinsurance and copayments at the same time, usually it's one or the other. HMOs usually have copayments, while PPOs have a mix of copayments and coinsurance for different types of care.

There's also something called the maximum out-of-pocket that you'll hopefully not get ill or injured enough to hit. That's the dollar amount that you have to pay in a year before your insurance steps in a picks up all of the costs for any covered services, and you don't have to pay copayments or coinsurance any more. It's usually fairly high.

You can't really influence your deductible much, but you often can influence the size of the copayment or co-insurance amount by selecting "in-network" doctors, hospitals, and labs rather than "out-of-network" providers. (This is true for PPO and POS plans; for an HMO plan, going out-of-network means they will not pay at all.) This is why people talk about wanting to find an in-network doctor. You can usually find a list of doctors or practices who are in-network on your insurer's website.

3. A secondary benefit of health insurance from #2 that many people don't realize is the negotiated discount you're getting. That means that a doctor who usually charges $150 per visit will only charge you $80, because your insurer has made that lower rate a requirement of participating in the network. This means you're getting some value from insurance even when you're still paying out-of-pocket because you haven't hit your deductible for the year yet. Note that to get this benefit, you need to be going to an in-network doctor. That's one more reason why it's a good idea to find a doctor who participates in your plan, and to call them up to see if they're accepting new patients and if you can set up an appointment for your next Pap smear. (I assume you're a woman--Pap smears are always the first visit I've set up with a new doc, just because I need them regularly and they're always covered.) Becoming the patient of a doctor who accepts your insurance makes life easier because then if you have an urgent issue, like a UTI or broken wrist, you know exactly where to go and you don't waste time trying to figure out who to go see.

4. Knowing what type of insurance you have is important in understanding whether you need a referral from a primary care doctor in order to see specialists. If you have an HMO or POS plan, usually you have to pick a primary care doc who you'll see for all your care, and that person has to give you a referral to any specialists. (If you don't get a referral, it's not covered and you might not get the discounted rate.) If you have a PPO or HDHP plan, usually you don't need a referral--you can go see a specialist directly. Typically there is a trade-off in terms of cost and freedom--HMOs tend to be cheaper, because you have less choice in who you see; PPOs are more expensive but you can see almost anyone.

5. Under the new health reform law, some types of basic check-ups are required to be covered by all health insurance policies and they have to be free to you (the insurance company has to pay the whole bill, even if you haven't met your deductible). You can see the list of things using the links on this page. The most relevant ones for me have been Pap smears and flu shots (very nice to have my annual visit be free), but other ones may be more relevant to you depending on your age. The nice thing about this is it gives you a low-cost way to make that first appointment with an in-network doctor, so you can become a patient of someone who takes your insurance. Depending on what your new doctor/new practice's hours are like, I might also recommend searching around for a nearby urgent care center that you know takes your insurance--it's really unpleasant to try to figure this stuff out once you actually NEED to see someone, so it's worth it to figure out beforehand where you'll go when that happens.
posted by iminurmefi at 2:11 PM on February 3, 2012 [3 favorites]

Read your entire plan. They should have sent you a booklet - read it. Every single page. Then call them and ask questions about anything you don't understand.

It is not your doctor's office's responsibility to know your plan - it is yours. Read it before you go to the doctor again, and read all the explanations of benefits you get sent after the appointment.

Iminurmefi has a great overview, but you still need to read your plan's booket in detail.
posted by peanut_mcgillicuty at 5:25 PM on February 3, 2012

Drill it into your brain that just because you have insurance and just because you took care of the copay does NOT mean your financial obligation is over. You will likely receive a bill for what insurance didn't cover up to several months after the procedure/appointment/test.

That has been the hardest thing to get through my brain because by the time the bill comes around I forget that had the test or appoimtmet in the first place.
posted by HMSSM at 8:33 PM on February 3, 2012 [1 favorite]

Also - if a concern, make sure to check how your plan covers mental health treatment, such as Psychiatrist and Therapist visits, in-patient treatment, etc. It may be quite different than how they'd handle a physical concern.
posted by spinifex23 at 10:43 PM on February 3, 2012

If your plan offers a free annual checkup, there may be a checklist of things that are covered in that visit. Anything not on that list could be considered Not Eligible and you will be responsible for payment in full. For me, a thyroid test and a vitamin D test cost over $600. If I had gotten them at a doctor visit to specifically address symptoms that required those tests, they would have been covered. But because I requested them as part of an annual checkup, they were not on the checklist and therefore not covered in any way - no discount, no payment from Health Savings Account, nothing.
posted by CathyG at 10:38 AM on February 4, 2012