Healthcare in the United States can be very expensive. Without insurance, Healthcare.gov estimates an accident leading to a broken leg can cost up to $7,500 to fix, and an average three-day hospital stay can reach up to $30,000.
With the addition of the Affordable Care Act (ACA), access to affordable health insurance increased, giving more Americans agreat way to reduce unexpected medical costs to a more reasonable amount. In fact, the U.S. Census Bureau says roughly 91% of all Americans are now covered by some form of health insurance.
But simply having health insurance doesn’t solve everything. There are always services and procedures your health insurance plan may not cover, which can ultimately leave you holding substantial medical bills.
In this blog, we’ll go over what health insurance does and doesn’t cover, why a health plan might not pay, and how to supplement a group health plan to cover excluded services.
What does health insurance cover?
Before the Affordable Care Act, health insurance providers on the individual market often excluded certain types of coverage from their plans. Benefits offered could vary drastically from plan to plan, leaving consumers not knowing what to expect when switching from one health plan to another.
Now there is significantly more standardization of insurance plan benefits. All plans on the health insurance Marketplace are required to offer ten essential health benefits, including services like preventive care, mental health and behavior health, and pediatric services.
However, according to the ACA, specific services within each benefit category may vary by state. Meaning your plan may not cover the same services that another plan covers.
When you reach your annual out-of-pocket limit for these essential health benefits, your plan will cover 100% of their cost. Annual or lifetime maximums on the amount of money the insurer will pay for the services covered by the essential health benefits are prohibited.
If you have a health insurance program like Medicare, the coverage is divided into parts. Medicare Part A generally pays your hospital inpatient costs, while Medicare Part B helps pay for doctor visits, preventive services, lab tests, medical supplies, and more.
What doesn’t health insurance cover?
The ten essential benefits cover many healthcare needs, but there’s no requirement that a health plan must cover other additional services. If you’re looking to switch to a new health insurance policy, there could be several services you think are covered, but they’re not.
Outside the ten essential benefits, an insurance company determines what kinds of services they want to cover. These decisions are based on the company’s understanding of the types of medical care most patients need and what they can offer while still remaining profitable.
Understanding your health coverage plays a big part in how much you’ll pay out-of-pocket, including your deductible, coinsurance, and copay. It can also help you determine if you need to purchase supplemental health insurance.
Let’s look at three popular healthcare services often not covered by standard health insurance plans.
Adult dental and vision services
Under the Affordable Care Act, dental coverage is considered an essential health benefit for children. But adults aren’t quite so lucky. In the past, some people had health, dental, and vision insurance bundled into one plan. But now, most medical insurance plans don’t cover dental or vision insurance unless otherwise stated.
If you want dental or vision coverage, you’ll most likely have to purchase a supplemental insurance policy that includes one or both of these services. But before you buy a plan, know that they typically don’t have any caps on out-of-pocket costs.
Despite a growing need for fertility benefits, costly fertility care remains inaccessible to many. Only 19 states have passed fertility insurance coverage laws in recent years. Most health insurance plans will cover infertility diagnostic testing, but a wide range of fertility treatment services usually aren’t fully covered by insurance companies.
The quickest way to determine if your insurance plan covers fertility treatment services is by reviewing your health plan’s summary of benefits. If your insurance policy excludes infertility treatment and all related services, it’s safe to assume any services you need for your treatment won’t be covered.
Weight loss surgery
Weight loss surgery, or bariatric surgery, is a set of surgeries that can cause weight loss by restricting the food your stomach can hold, which results in weight loss. The majority of standard health insurance plans don’t include bariatric surgery coverage.
While access to healthcare has improved for many within the last few years, weight loss coverage isn’t yet standardized. Bariatric surgery isn’t considered a life-saving treatment. Therefore its inclusion in your health benefit can vary tremendously depending on the plan you select.
What are the reasons why a health insurance plan won’t pay?
If your physician recommends a specific prescription and your health insurance doesn’t pay for it, you’ll be left to pay the full bill out of pocket. When a claim like this happens, it’s easy to get fed up. However, before you turn to an angry phone call, see if one of the three below common occurrences is the reason why your health plan won’t pay.
1. What you need isn’t a covered service of your health plan
When a health plan denies a claim or refuses a pre-authorization request because a service isn’t covered, it’s saying your policy doesn’t cover that particular health service—no matter what the circumstances may be.
If you feel like your health insurance company is wrong, check your policy details carefully to confirm. If you have employer-sponsored health insurance, you can check with your company’s benefits specialist to see if the service is truly covered or not.
2. You got care from an out-of-network provider
If you have a health maintenance organization (HMO) plan or exclusive provider organization (EPO) plan, your coverage is likely limited to your health plan’s in-network providers. Therefore, your health insurance won’t pay the full bill—or may not pay at all—if you use an out-of-network provider.
If you’re requesting pre-authorization for an out-of-network provider and it was denied, you can re-submit the request using an in-network provider instead.
However, if you’ve already received care and your health plan won't pay, you may have to prove that no in-network providers could provide the service you needed. Similarly, you might have luck if it was an emergency and you had to go to the nearest provider available to receive the service.
3. Your health plan doesn’t think the service is medically necessary
If your claim or pre-authorization request is refused due to medical necessity, your insurer may not believe you need the specific healthcare you’re requesting and won’t pay.
If you receive a medical necessity denial, you should enlist your physician for help. If your healthcare provider has recommended a specific prescription drug or medical service for a reason, they'll be able to explain that to your insurer.
In these cases, the insurer may approve the procedure or work with your physician to approve another more reasonable approach.
How to supplement a group health plan to cover excluded costs and services
Now that you understand more about health insurance coverage, you may be wondering where this leaves you if you’re an employer looking to help your employees cover the costs that aren’t fully paid for by their insurance. Offering private insurance, or employer-sponsored health insurance, is a great way to care for your employees. But it can be costly, and clearly it doesn’t cover everything.
A good route to go is supplementing your group health insurance with a health reimbursement arrangement (HRA), such as an integrated HRA, or a health stipend. These two benefits help your employees pay for services and out-of-pocket expenses that your employer-sponsored group health insurance doesn't fully cover.
We’ll dive into each benefit below to give employers a better idea of how they work.
If a business already offers a group health insurance policy, an integrated HRA, also known as a group coverage HRA (GCHRA), is a strong option to offset gaps in coverage.
The integrated HRA is a tax-free health benefit arrangement for employers of all sizes designed to supplement a group health policy. Using the GCHRA, employers set a budget-friendly reimbursement allowance for employees to use on a wide range of out-of-pocket medical expenses.
Once a purchase is made, the employee submits proof via a receipt or invoice. If the expense is approved, they are reimbursed for the cost up to the set allowance amount. Employees can’t exceed the allowance that you have set.
Unlike the popular health savings account (HSA), any unused HRA funds stay with the employer when an employee leaves a company. In other words, the funds are use it or lose it—like a flexible spending account (FSA).
An integrated HRA is a great way for employers to offer their employees financial assistance to help them cover any services excluded by their group plan. It also gives an employee the ability to have more freedom and control to make the healthcare decisions that will work best for them.
With a health insurance stipend, the employer offers a fixed amount of money to their employees every month to help them pay for out-of-pocket medical costs. The funds are usually given regularly, such as weekly or monthly, and can be easily administered by adding the employees’ paychecks as extra taxable income.
There are several advantages to offering your employees a health stipend. Firstly, stipends are a highly flexible benefits option for businesses. They have fewer regulations than HRAs, so they’re simpler to manage.
Employers simply decide how much money they want to offer, and the employees pick the healthcare services they want to spend it on.
Also, if you have a lot of employees that receive premium tax credits, they can be given a stipend without having to waive their credits since the stipend functions as added wages.
Understanding health insurance can be complex. While the majority of basic services may be covered, specific services you might need for your personal health could be just out of reach. And if you don’t have enough out-of-pocket cash to pay for the healthcare you need, your health insurance plan may not be a strong enough benefit.
If you’re an employer looking to supplement your group health insurance plan to cover more out-of-pocket medical costs for your employees, then a GCHRA or a health stipend can make your health insurance work for you. Reach out today to a PeopleKeep personalized benefits advisor, and we’ll give your group health plan a boost.