Why do I have out of pocket expenses even though I have insurance?

The issue of payment and billing in medical practice has been the subject of much debate both politically and socially. While in some countries medicine is socialized and all the payments are made by the government, in other countries there is no form of insurance and patients have to pay for all their care out of pocket. In United States, we have a combination of the above, as well as admittedly quite a bit of chaos.

Perhaps the most common out of pocket expense for most patients with medical insurance is copays. In an effort to cut costs, insurance companies have diverted some of the cost of each visit to the patient in the form of a copay. Additionally, some economists believed that by making the patient responsible for a small amount for each visit, they might cut down on the number of unnecessary or marginally necessary doctor’s visits. The amount of copay varies from insurance to insurance, and even within the same insurance company based on the level of insurance that you have purchased. The copay also varies if you are seeing your internist, versus a specialist or an emergency room visit.

The copay system is built in financially into the cost analysis of the insurance companies. Doctors are obligated by contract to charge you exactly the copay proscribed by your insurance company. Although some doctors offices might give the courtesy of waiving the copay for you, this is in violation of the contract with insurance companies, and it may result in termination of the contract between the doctor and the insurance provider.

Some insurance companies print the amount of copay you should pay on your insurance card, making it easy for everybody to figure out exactly what you owe during each visit. Otherwise, your best bet is to find out ahead of time what is the amount of copay for your insurance, and to have this ready during your doctor’s visit.

The second issue that can lead to out of pocket expenses is the idea of deductibles. Many insurance companies institute an initial out of pocket expense for each patient per year. This could range from a few hundred dollars to a few thousand dollars for patient per year. The amount of this deductible again varies from insurance to insurance, and also within each insurance company based on the level of insurance that was purchased. Some insurances even have different deductible system for visiting your primary doctors versus a specialist versus having surgery. Unfortunately, there is no good way of tracking how far along your deductible payments you are at a given time before most doctor’s visits. For most insurances, the protocol is to send a bill to your insurance company after you come for doctor’s visit. Only when the billing is bounced back from the insurance company due to unmet deductible does everybody find out that there is an outstanding balance. For most patients this happens during the first couple of months of each calendar year, when a new deductible is applied. Once the doctor’s office finds that a specific appointment fell within the deductible zone, the office needs to then charge the patient directly for the amount.  Unfortunately, this system leads to quite a bit of extra paperwork as well as unpleasant surprise for the doctor’s office and the patients.

Another source of billing the patients has to do with authorization for tests and surgeries. Many insurance companies require doctor’s offices to pre-certify certain tests such as CT and MRI scans, as well as any elective surgery that is to be performed. Clinical information is given to the insurance company to certify these elective procedures based on standard of medical care. Occasionally, although the doctor and patient both agree that the certain tests or procedure is necessary, insurance companies do not agree, and there is a problem with pre-certification. This can lead to unexpected billing to the patient if the procedure has already been performed.

Another surprising factor is that occasionally even if pre-authorization is obtained for certain tests or procedure, authorization does not necessarily mean payment. Occasionally, insurance companies might agree with you that based on clinical information certain tests or procedure is necessary, however it is their policy not to pay for that test or procedure. Most of the time, this is found out after the procedure has been performed, and the billing bounces back from the insurance company due to lack of coverage.

Another source of billing the patients would be out-of-network benefits. Many insurance companies have a certain number of providers whom they certified to provide care for their patients. However, occasionally the patient might want to see a doctor that is not within the network. Some insurance companies provide out-of-network benefits for such visits. There are many different ways of coordinating those benefits to provide payments for these visits. Frequently though, the patient might end up with some kind of responsibility for portion of the payments, which is the difference between what the insurance company helped you with versus what the charges were from the doctor’s office.

It is best to be educated completely about all your benefits and responsibilities from the type of insurance that you have purchased. This will give you the best options of being controlled of any expenses that you may incur during your medical care.

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