By Lisa Zamosky
The details of our health plan’s policies can be confusing. As a result, many of us carry misperceptions about our coverage and the type of services we’re entitled to that can end up wreaking havoc on our finances.
Here are three commonly held myths about health insurance that you would be well served to ditch.
Myth #1: If I have health insurance, all of my medical services will be covered
The Facts: Although insurance certainly offers us greater access to medical care and protection against financial ruin, the sad fact is that even people with coverage are vulnerable to medical bills.
In fact, according to the nonprofit Atlanta-based credit counseling agency, CredAbility, medical debt is a growing cause of personal bankruptcy in this country; about 20% of people who sought financial counseling in 2010 and 2011 did so because of medical debt.
Taking action: Taking steps to understand your health plan in advance of seeking care can go a long way toward helping you avoid costly mistakes. Make sure your doctor or hospital is in your insurer’s network, know which services you’re eligible for and which you are not, and understand the rules you need to follow, such as gaining prior authorization before going to the doctor or scheduling surgery. Each of these steps can help you avoid denial of payment.
Myth #2 –Insurance premiums are the most important factor when choosing a health plan based on cost
The Facts: No doubt, in recent years you’ve seen your healthcare costs rise. In fact, a recent report by the Commonwealth Fund found that employer-based insurance premiums rose by a whopping 50% between 2003 and 2010, and that workers’ share of those costs rose by 63%.
In addition, more Americans are switching to high-deductible health plans, which offer a lower monthly premium, but also require you to pay more money out of your own pocket for medical bills before your insurer pays for a dime’s worth of care.
According to the Employee Benefit Research Institute, about 16% of those with private insurance were enrolled in a high-deductible health plan in 2011, up 2% from the year before. And those numbers are only expected to rise.
Taking action: Focusing on monthly premiums alone when deciding which health plan to choose will give you a false impression of your total out-of-pocket medical costs.
In addition to premiums, the amount of your deductible, co-payments, co-insurance and caps on coverage need to be considered when figuring out the true costs of health insurance and to prepare for the possible medical expenses that lie ahead.
Myth #3: As long as the hospital is in-network, all services during my inpatient stay are covered
The Facts: Just because the hospital where you have surgery is in your insurance company’s provider network does not mean that all of the doctors you’ll see, lab tests you’ll be given and other services you’ll receive during your stay are. Any doctor or service provided by someone not in the network while you’re hospitalized will result in a bill. The problem, however, is that we often don’t have a choice about which doctors treat us in the hospital.
Taking action: If you know in advance that you’re headed for a hospital stay, ask a lot of questions in advance of both your doctor and hospital administration, including who will be treating you and what tests you can expect. Be clear about the fact that you expect their assistance in making sure that you are treated by providers who accept your insurer’s rates.
Since it’s nearly impossible to stay on top of what’s happening on your own while you’re hospitalized, it’s also a good idea to put a friend or family member in charge of your financial well-being and to ask a lot of questions about the doctor visits and tests being administered.
What beliefs have you held onto that got you into financial trouble? Share your experience in the comments section below.