In recent months stories have been appearing in the news about individuals and families getting “surprise medical bills”. This seems quite self-explanatory, they got bills from medical services received that they were not expecting. Some of these bills were quite sizeable. In one story a woman got a bill for nearly $40,000.
These are not folks that were without health insurance, which is why the story garnered so much public attention and scrutiny. How does someone with health insurance get huge bills? Well, there are actually several ways this can happen.
And, for the record, this is totally avoidable. And I am not talking about a total overhaul of the healthcare system. Though that is one possibility. But, we are dealing with what we can do as consumers in America to avoid getting hit with a bill that could either financially strap us for years or worse, bankrupt us.
I have a Nashville health insurance agency, but I am licensed in 25 states. And I have a pretty good understanding of health insurance in general which is why I write these articles.
There are actually several ways you can end up with an unexpected bill from your medical provider. Most of them involve a lack of understanding of the benefits and coverage provided under your insurance policy. Many Americans are totally in the dark about what their policy does and does not cover.
Let me give you a real-life example. I enrolled in a client late last year on a major medical type of plan. This means that there is a deductible to meet before the insurance company will pay out any benefits. It also means that the plan has a limit to how much the client would have to pay each year towards her medical bills. This particular plan had a separate set of benefits available without having to meet the deductible for things like routine doctor visits, lab work, wellness, etc.
So, she goes for her annual check-up (wellness) and the insurance company covers 100% of the bill. Great, right? It should have been. However, the doctor saw something that he did not like in one of the tests and wants her to go for a more advanced imaging test to make sure there is nothing serious going on.
So she goes and gets the test done and it comes back negative. Yay! She is happy about that and so am I. She is actually a friend of mine and we stay in contact throughout this ordeal which is how I know. A few weeks later she calls me a little upset and perplexed. She got a bill from the hospital where she went for the MRI. It was $4400. She was not happy. But, she was also confused. The initial wellness visit was covered 100% why was this not?
Well, that is 2 fold. One is that once the doctor had a diagnosis to check out the MRI no longer fell under the wellness portion of the plan. Two, she has a deductible to meet. So she will have to pay out of pocket towards the bill until she hits the deductible. In the end, though the insurance company passed on its contracted rate with the hospital to her so she got her bill reduced by 50%. Pretty nice.
So that is one way you can get surprising medical bills when you have insurance. There are several other ways that all have to do with understanding the benefits, exclusions, and limitations of your policy. I won’t go into the myriad of ways just for time’s sake. But, I do want to talk about that young lady that got the $40,000 bill even though she had a good strong health insurance plan through her employer.
She did everything right for her surgery. From getting preapproved for the surgery by her primary care physician, scheduling time off from work to find an in-network hospital where she could get her procedure done. She knew how much her deductible was going to be and she had planned for that as well by saving over several months.
So just like my friend did, she goes and gets her procedure done. Everything goes perfectly fine. She is released from the hospital and she goes home to start her recovery. She starts getting the bills from the hospital as expected and everything seems fine. She is still expecting to only have to pay her deductible. That is until that final bill comes in.
This bill is not like the rest. It is not from the hospital and there is no corresponding documentation from the insurance company like all the other bills. It is from a doctor, one she has never heard of. And when she sees the amount of the bill she is shocked! It is nearly $40,000! That’s almost as much as she makes in a year.
So, of course, she starts making phone calls. And when she finds out why she is indeed responsible for the bills she is not happy. Apparently, the hospital was in the insurance company’s network, but the doctor that performed the procedure was not. Say what? Yes, the doctor was not hospital staff and not contracted with the insurance company. He was an independent contractor brought in by the hospital to fill a vacancy in the surgical staff.
This is not uncommon at all. In fact, there are probably many professionals at any hospital that are not employed by the hospital and are not part of any insurance network. This is one of the most common ways for someone to get a really large bill. The doctors have not agreed to reduce their bills for the insurance companies so the patient gets socked with the full price of the service.
So the debate is whether or not the hospital should have disclosed to the patient that the doctor was not part of her network or if she should have checked on that herself. And the answer is that both things should have happened. She dotted all her I’s but didn’t cross her t’s. I feel that is the hospital is accepting him as an insurance patient that they should disclose to her if anyone servicing her is not in-network. Because to be brutally honest, they would not have even admitted her for elective surgery had she not had insurance they accepted. So they did her dirty by not telling her. That is just my opinion.
But, who would have ever even thought that they would assign her someone, not in the network. A layman would never have even thought would be a thing. That is why I am writing this article to alert folks to what can happen when you are not fully informed.
So the lesson is that you should know fully what your policy covers. If you have doubts then call the insurance company to get your questions answered and ask them where you can find it in writing. Specifically what page it is on in your policy so you can read it for yourself.
As I said before I have a Nashville health insurance agency, but I am licensed in 25 states. So if you have questions about your current coverage please feel free to reach out to me.