18 Secrets Your Health Insurance Company Is Keeping from You

From intentional billing mistakes to the truth about your "out of pocket" limit, here's what you need to know from a healthcare insider.

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1. Business first, people second

When it comes to dealing with your medical insurance company, forget the touchy-feely commercials and go with your head. “Don’t buy the advertising hype. Health insurance execs don’t run around hugging babies, comforting parents, and playing with puppies,” says Sarah O’Leary, the CEO and Founder of Exhale Healthcare Advocates, an advocacy group for healthcare consumers. “The primary function of multi-billion dollar insurance companies is to make more billions for themselves and their investors.” This means that when you deal with your insurer, you need to remain objective and check your emotions.

2. We have a financial interest in your good health

Staying healthy is good for you, obviously, but it’s also good for your health insurer. Insurance companies have a vested interest in your continued health, so that you’ll require fewer costly services. “They push wellness programs so that you stay out of hospitals, thus costing them less money to insure. They want you to quit smoking so that you don’t get cancer because it’s very expensive to treat, not so that you live longer,” O’Leary explains. Fortunately you can both win in this scenario, so make sure you’re taking full advantage of all the new preventative and wellness programs available to you. Check out these low-cost or free preventative programs available to everyone.

3. Full coverage doesn’t mean you’re fully covered

When you talk about your insurance “coverage,” think less “blanket” and more “Swiss cheese,” O’Leary says, adding that every single plan they’ve analyzed, no matter how expensive, has a list of exclusions, co-pays, and co-insurance that aren’t paid for by the plan. “When you see the number for your ‘annual out of pocket limit,’ it’s based on what the policy says it is obligated to cover, not how much you might actually potentially have to pay for your entire care,” she explains. “There simply is no such this as 100 percent coverage.” (Got Medicare? Here’s everything you need to know about your coverage.)

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4. We’ll only tell you what we cover, not what we don’t

Insurers have a set list of pre-approved services for patients and, O’Leary says, it’s a lot shorter than you think. Most people understand that over-the-counter drugs, out-of-network treatments, and elective surgeries aren’t covered, but many people don’t realize that there are plenty of drug treatments, procedures, hospital stays, and therapies that even though your doctor prescribes them are still not included in your plan—meaning those costs come out of your pocket as well, she explains. And often you don’t know they’re not covered until the bill comes back in full, to you.

5. It’s on you to know your real healthcare “number”

You may think that knowing your deductible and monthly fee is all you need to plan your healthcare expenses, but this will leave you way over budget,  O’Leary says. Instead, you must consider the cost of prescription medications you take, any non-emergency tests or procedures you have scheduled for the upcoming year, and any chronic conditions that affect you—in addition to the annual premiums and the deductible. And that’s not even accounting for emergency situations which can be as expensive as they are terrifying. Want to save even more? Check out our 5 top tips for saving on insurance.

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6. Just because a hospital or office is “in-network” doesn’t mean all its doctors are

Think you’re covered because you took the time to make sure your hospital or doctor’s office was approved as being in your network? It’s not that simple. Individual providers, labs, tests, specialists, and others that work within the facility may still be out of network. “We recently had a patient who went in for a non-emergency procedure to an in-network hospital. A few weeks later, he received a $6,000+ medical bill from the anesthesiologist who was, unbeknownst to the patient, out of his insurer’s provider network. The insurance company refused to pay it even though the patient thought he was safe using an in-network provider,” O’Leary says. “The kicker? The insurer rejected his appeal claiming he should have known better.” It’s tedious but important to ask every single person you work with—from the staff to the labs to the imaging centers—if they are also covered by your insurance. (Need more proof? Check out this outrage that ended up in a nearly $1 million medical bill!)

7. We will deny an expensive claim that we should cover, just to see if you notice the mistake

Insurers like you best when you don’t cost them much, and so some companies have an unofficial (or even semi-official) policy to automatically reject high-expense claims that ought to be covered. Many patients won’t know they can contest it or won’t understand the charges, and so will assume the bill is factually correct, paying thousands that they don’t legally owe,  O’Leary explains. “You might ask, ‘How do they get away with it?’ First, the burden of proof is on the patient who rarely wants to take on the insurer. Second, the insurer typically says, ‘Oops! Computer error!’ if they’re caught,” she explains. “It has to be widespread fraud before it becomes important enough to pursue by the government.” This means that it’s your job to be your own best advocate. Always call about denied claims and have them explained to you step by step. (Here are 10 more wildly overinflated hospital costs.)

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8. Just because your doctor writes you a prescription doesn’t mean you can fill it

Expensive medications for treatment of certain cancers, diabetes, liver disease, and a host of other maladies can cost patients tens to hundreds of thousands of dollars if the insurer does not cover the drugs. But even if the drugs are covered, the insurer might try to stall in urgent cases to see if the patient has enough money to pay for the drugs rather than wait on the insurer’s approval, she says. Another sneaky stalling tactic? Requiring you get “pre-certification” or do certain other (less expensive) therapies first.

9. We are not your cheapest option for prescription meds

“Many plans don’t give patients any drug benefits, even on generics, until you reach your deductible, which is often in the thousands of dollars,”  O’Leary says. Instead of just accepting your insurance company’s lousy offer, she recommends using websites such as blinkhealth.com and goodrx.com to shop around for the best price for your medication in your area.

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10. Your medical bill almost definitely has a mistake

Up to 80 percent of all medical bills contain errors, according to a recent study done by Medical Billing Advocates of America. There are two main types to look for: Medical bill coding mistakes are when the healthcare provider puts in the wrong code, causing the insurer not to pay the claim, or the insurer reacts incorrectly to a correct code. Medical billing errors are when the biller sends duplicate bills, charges multiple times for the same item, inputs the wrong cost for the item, doesn’t account for the payment by the insurer, or other mistakes. The only way to make sure yours are correct? Go through every bill (no throwing out envelopes unopened!), read every line, and keep your own records. Call immediately when you spot a mistake. And don’t forget to use these 11 insider tips for lowering your medical bill.

11. Balance billing is our best friend—and your worst enemy

You’ve likely heard of $100 Band-aids and $500 cotton balls showing up on medical bills. This happens thanks to a sneaky practice called “balance billing.” Here’s how it works: Hospitals have an arbitrary cost setting mechanism called a “charge master,”  O’Leary explains. It sets the prices for the items and services provided by the hospital, is often wildly inflated from item to item, and varies by hospital. Then your hospital charges your insurance company that price, let’s say $500 for an aspirin. The insurer only pays back $20 for that aspirin. Instead of simply accepting the $20, the hospital holds you responsible for the difference of the inflated cost of $280. “Balance billing is at least unethical and often illegal,” she says. “Savvy patients demand detailed, itemized bills from their providers and check them carefully for errors.” For more info: Why a hospital bill costs what it costs.

12. You shouldn’t pay your bill promptly

That “due by” date? Nonsense, according to O’Leary. “Healthcare providers now send bills well before your insurance company has decided what part of the claim they will pay. The average person would think you owe that bill and should pay it,” she says. “Don’t! First, the cost is probably wildly inflated. Second, you need to know what the insurer is going to pay first before you do anything.” Her advice? Don’t pay a dime until you get an EOB (Explanation of Benefits) from your insurer that explains your claim and how much they are paying.

13. You can ask us for a manual review

Not sure if your bill is correct or not? It’s within your rights as a patient to ask both the insurer and the healthcare provider to do an internal manual review of both the medical bills and the claim to check for errors, O’Leary says. They often catch their own mistakes.

14. It’s never too late to negotiate a bill

Many patients think once a bill has gone to collections it’s game over, but that’s not true, O’Leary says. “Call the healthcare provider first, not the collection agency, to see if you can negotiate directly with them. They have much more of an interest to negotiate the debt down than the collection agency,” she explains. If you’re dealing with debt exceeding $2,000, it’s worth the money to hire an independent expert health advocate, she adds. Look for one that charges only a small up front fee and no more than 25 percent of anything they are able to save you. And make sure you know these 13 things debt collectors won’t tell you.

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15. Don’t trust the “patient advocate”

The “patient advocate” assigned to you in the hospital or the case worker at the insurance company may be nice and friendly but they are not working for you, O’Leary says. “They work for the ones who stand to profit from your case,” she adds. “Always keep that in mind when dealing with them.”

16. You can shop around for a better deal

Patients often think that medical fees are set, but just like any other business, costs for goods and services can vary widely. “Shop around the cost of exams, tests, procedures, medications, nursing facilities, and imaging centers before non-emergency events,” O’Leary says. “The price of an MRI on one side of Main Street can be $500, and $2,500 on the other. Healthcare pricing, as a rule, is arbitrary. Even the pharmacy you choose can be the difference in hundred of dollars annually.” She adds that it’s important to negotiate the price of everything up front, before you walk into a doctor’s office or to a lab. (Pssst… Here are 50 more secrets hospitals don’t want to tell you.)

17. You don’t have to sign all the forms to be treated

Part of being a patient is signing stacks of forms, most of which you barely read much less understood. This is a mistake, O’Leary says. Look for any “blank check” clauses on intake forms—it’s the part that reads, “I will be responsible for all costs not covered by insurance.” Instead, she recommends crossing it out and writing, “I will be responsible for all costs that are medically necessary, that are not the responsibility of my insurer, are competitively priced, and that I am made aware of prior to treatment if they are not part of standard operation procedures.”

18. We care about our likes on social media too

If nothing else works, you can shame your insurer or healthcare provider online, O’Leary says. “If you’re being wronged by a healthcare provider or insurer, take to social media. Companies do care about their public reputations a great deal,” she says. You can Tweet or Facebook from your personal account, leave ratings on public sites like Yelp, or look for groups like the “Healthcare Wall of Shame” on Facebook.

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