How to Combat Common Struggles with U.S. Health Insurance

Are you paying your insurance monthly premiums without understanding the insurance benefits available to you? Are you suffocated by medical debt or the thought of going into medical debt? Do you struggle to understand insurance jargon? If any of these apply to you, you’re in the majority.

Key takeaways:
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    The U.S. operates on a mixed-payer system where many entities dictate medical cash flow, which confuses consumers.
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    Understanding key insurance definitions, like network, coinsurance, and copay can help you shop for your next plan.
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    Never assume that your insurance will cover something without verifying your plan or speaking with an insurance representative.
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    Familiarize yourself with how to avoid medical debt, so you won’t be in the 6% of Americans with over $10,000 of medical debt.
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    Don’t skip out on preventative care, which can ultimately save you thousands of dollars.

These are some of the many struggles that Americans face in the wake of a failing healthcare system. Learning about the inner workings of insurance can help you overcome these challenges.

Understand the general healthcare system

Approximately half of United States adults believe that their knowledge of health insurance is insufficient. To no fault of their own, the insurance companies that dictate much of the U.S. healthcare system are purposefully puzzling. In contrast with the U.S., 17 other countries have single-payer systems, where one entity (the government) takes charge of all healthcare funding and reimbursement.

In the U.S., many organizations insure, reimburse, and manage healthcare funds, including:

  • Medicaid
  • Medicare
  • Private insurance

Understanding how this funding works and its accompanying cash flow can improve healthcare access, reduce medical financial strain, and increase the timeliness of care. Unfortunately, not having a grasp on your health insurance may negatively affect your health.

Learn the confusing terms and definitions

When signing up for your annual health insurance, you likely ask yourself “is this insurance worth it?” It can be difficult to compare plans as a consumer unless you know what to look for.

Here are some key definitions to help understand what your plan entails:

Premium

How much you pay for insurance on a monthly basis.

Deductible

The amount of money you must pay out-of-pocket before your insurance will start to cover your healthcare costs.

Copay

A flat fee for a specific service (e.g. you pay $20 out-of-pocket for a prescription after you’ve met your deductible).

Coinsurance

The percentage of your healthcare costs you must pay before your insurance will cover your healthcare costs (e.g. you and your plan share the cost. You may pay 20% of the total cost of your healthcare bills, for example).

Prior authorization

A prior approval that your insurance will pay for a specific service and you won’t be solely responsible for the cost.

In-network

A group of providers and hospitals that are contracted with your insurance.

Out of network

A group of providers and hospitals that are not contracted with your insurance.

Out-of-pocket maximum

The maximum amount of money you would have to pay for your healthcare costs in a given year (e.g. your out-of-pocket maximum is $30,000, so your insurance will not hold you responsible for healthcare costs above that range, unless they are out of network, or involve services not covered by your plan).

Don’t make assumptions

Another detriment to understanding health insurance is making assumptions. Here are some of the many assumptions people make about insurance that can end up costing them money:

  • High premiums mean better coverage.
  • Prenatal care won’t cost any money out-of-pocket.
  • Everyone over 65 needs glasses and hearing aids, so Medicare probably covers vision and hearing.
  • Preventative care is free.

The best way to not make incorrect assumptions is to familiarize yourself with your insurance plan language. Consider any potential healthcare needs in the upcoming year and read up on those specific service terms. Do you need ambulance transport often? Have an upcoming surgery? Planning on becoming pregnant? Get curious about your coverage and you’ll likely end up learning something that will eventually save you time and money.

Strive to avoid medical debt

Recent studies show that over half the US population has current medical debt or has had some medical debt in the past five years. About 12% of that population has medical debt reaching over $10,000. Much of this medical debt is a result of predatory financial practices in the U.S. healthcare system. Unfortunately, those stuck with debt are often individuals who don’t know the tricks on how to avoid it and dispute it.

Compare prices

Beginning in January 2021, the U.S. government has a mandate that all healthcare facilities adopt price transparency. This allows consumers to compare the average cost of a specific hospital service with neighboring hospitals. Facilities that don’t comply with this mandate can be reported to the Centers for Medicare and Medicaid and receive a fine. If your local hospital prices aren’t easily found online, call them to request prices.

Know your rights

In non-emergency situations, read the consent forms given to you before signing. According to the No Surprises Act, some of these forms may be optional to sign, and signing them could justify the hospital sending you a larger bill than necessary. Signing these forms also does not give up your right to pursue litigation should you experience malpractice.

Ask for documentation

If you are staying in the hospital non-emergently, ask your attending provider to document each day if staying that day is medically necessary. This documentation would serve as proof to the hospital that you were following the directions of your medical provider while you were in a vulnerable situation. If insurance is not willing to cover some of that hospital stay, you would have documentation that could support getting some of that cost written off by the hospital.

Ask for an itemized bill

Never accept a medical bill that only has the bottom line. By asking the hospital billing representative for an itemized bill, you are holding them accountable for what they charge. The itemized bill allows you to dispute any wrongful or excessive charges.

Ask for charity care options

Nonprofit hospitals are required to have options for charity care and medical bill assistance to continue their tax-exempt status. The type of charity care programs vary widely, so ask your local hospital what is available. Most for-profit and nonprofit hospital systems will also allow you to pay your medical bills on a monthly payment plan, so you don’t have to go into debt or take out a loan to pay for your healthcare costs.

Make preventative care a priority

Many insurance options don’t offer free preventative care. Even if preventative care is a $20 copay, some U.S. citizens are unable to budget for that cost, or the logistics of making it to a medical appointment are difficult. However, even if your insurance doesn’t prioritize preventative care, it doesn’t mean that you shouldn’t.

Preventative care might be the difference between a new medication today versus a chronic disease in a few years. Or a small in-office procedure today versus an invasive surgery down the line. Preventative care truly does save time and money in the long run. If the logistics of medical appointments are difficult, opt for a telehealth appointment. If you need additional resources, ask your clinic to connect you with a community resource specialist, who can help you arrange childcare, transportation, or even time off work.

Health insurance literacy empowers consumers

If you have experienced difficulties with U.S. health insurance, you aren’t alone. The healthcare system wasn’t made to be accessible or simple. But you can start today by learning more about your insurance plan and legislation that affects the status of American healthcare. As the general public becomes more educated about insurance, healthcare policy may start to favor its consumers.

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