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Co-pay rising: Five health insurance myths

Whoever came up with the saying “The devil is in the details,” must have been thinking about health insurance at the time.

The industry is full of nuances and exceptions that can quickly lead to denied claims and unpaid medical services. Unfortunately, many of us only find out the painful truth about our coverage once we get sick. Below are five commonly held myths about health insurance – and the facts to debunk them.

Myth #1:If I have medical insurance, all services will be covered.

The Facts: Never assume that all bases are covered just because you have health insurance. If you live in a state in which medical insurers are not mandated by law to cover certain services or are allowed to exclude people on the basis of pre-existing conditions, a person with medical insurance is in effect uninsured for certain types of care. On the Georgetown Health Policy Institute’s Web site you’ll find a map of the United States. Click on your state to access a wealth of information, including your health care rights.

People are also often startled to learn that a doctor’s visit won’t be covered if the physician is not in their insurance plan’s network. The best way to avoid this problem is to call your doctor’s office to confirm that he/she accepts your insurance. Reading about prior authorization policies in your insurance provider’s handbook is also particularly important: failure to gain approval before using certain services can mean the insurance company will not pay the medical charges. If you still aren’t clear about the policies, call the insurer to discuss your questions.

Myth #2:Insurance premiums are the most important financial consideration when choosing a health plan.

The Facts: Most people consider only the premiums, or monthly payments, for medical coverage when deciding on a health plan – but it is important to consider co-payments (the portion of medical bills patients must pay once the deductible has been met and insurance coverage kicks in), co-insurance (coverage using two or more insurers), and caps on coverage, to determine the true costs of health insurance.

Most plans also have a lifetime spending cap on each kind of service, and some have annual caps as well – a fact that surprises many people. Once the limit for a particular service has been reached, you are no longer insured for that service.

Myth # 3:The only people wiped out by medical expenses are the uninsured.

The Facts: Although people without medical insurance are more vulnerable to financial hardship than the insured when they become ill, having coverage does not shield individuals and families from medically-related debt.

Myth #4: You can’t successfully fight a claim that has been denied.

The Facts: Bills from your insurance company and hospitals often conflict with the actual insurance policy. A lot of legitimate errors are made in billing, which is why consumers should never take the denial of coverage at face value.

Often, a phone call to the insurance company questioning the denial will resolve the problem. If a phone call doesn’t work, you can initiate a formal internal appeals process, which most health plans have. Also, most states offer an external appeals process – a review by an impartial third party – if the insurance company’s internal process doesn’t resolve the dispute.

Ask your insurance company to explain why your claim was denied, and also request an underlined copy of the policy outlining the rationale behind the denial. An explanation of your benefits is required by federal law. Hospitals are also required to provide patients with an itemized bill. Request a letter from your doctor saying the service was medically necessary, and ask your physician and/or hospital to place a hold on your bill while you appeal.

If you have employer-sponsored health insurance, you can ask the human resources department for help. Companies that are self-insured (meaning they fund their own health insurance plan) have a lot more clout when it comes to persuading the insurance company to pay-up.

Myth #5: As long as a hospital is in my insurer’s provider network, all inpatient services are covered.

The Facts: Confusion about provider networks leads to financial headaches for most insured people. Just because the hospital where you have surgery is in your insurance company’s provider network does not mean that all doctor visits, lab tests and other services are covered. Any doctor’s visit or service provided by someone not in the provider network will result in a bill.

If you know you’re going to be in the hospital, ask a lot of questions ahead of time, including who will be treating you during your stay. If possible, designate a friend or family member to oversee financial matters and ask about all charges, bills and services while you’re in the hospital.

If you have a healthcare question you’d like help answering, please send your query to Lisa at lisa@writtenarts.com.

Lisa Zamosky is a writer specializing in health care and a former executive who worked for years in the health insurance industry. Visit her online at writtenarts.com.

E-mail Lisa at lisa@writtenarts.com.

Follow Lisa on Twitter: twitter.com/lzam