New Healthcare Calculator Tools Help Clarify Out-of-Pocket Costs

As of January 1, 2023, health insurance companies must offer cost calculator tools to insured members. These tools will help people know upfront what the out-of-pocket costs are for tests, procedures, or prescription drugs.

Key takeaways:
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    Understanding the out-of-pocket cost of medical care is often challenging.
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    Now, insurance companies must provide a cost calculator tool so insured members will know how much they’ll owe before undergoing medical treatment.
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    The medical cost calculator tool is phase two of a federal Transparency in Coverage rule finalized in 2020.
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    The rule gives consumers the pricing information they need to make informed healthcare decisions.

Navigating health insurance can be a complicated process. It often leaves people guessing how much a medical procedure, test, or treatment will cost after co-pays and deductibles.

However, that is changing as new federal requirements outlined in the Transparency in Coverage final rule come into effect. The rule was released in 2020 by the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury. It stems from the Improving Price and Quality Transparency in American Healthcare to Put Patients First executive order issued in 2019 by President Trump.

The final rule is rolling out in three phases.

The first phase began on July 1, 2022, and requires most group health plans and issuers of group or individual health insurance to post pricing information for covered items and services. This information is available as machine-readable files on public websites. However, downloading or reading the files may be challenging without specific technology.

To help rectify this, the second phase, which came into effect on January 1, 2023, requires insurers to create an internet-based price comparison tool. This calculator tool includes information on cost-sharing responsibilities for an initial list of 500 covered items, services, and prescription drugs.

The tool must be internet-based, which means it must be made available on insurance companies’ apps or websites.

The calculation tool is required to allow insured members to search billing codes or descriptions of procedures and compare costs between in-network and out-of-network providers. It also informs insured members about deductibles or other out-of-pocket expenses and lists factors that might change what they will have to pay.

In addition, insurance companies must provide cost estimates in paper documents upon request.

This healthcare cost estimator tool differs from the health insurance cost estimator tools found on most insurers’ websites. Those calculators allow people to compare plan prices before they purchase a plan. In contrast, the new tools help people who already have a health plan determine how much specific medical treatments, prescription drugs, or procedures will cost.

Starting January 1, 2024, the third phase will require the cost estimator tool to list all covered items, services, and prescription drugs.

However, the final rule doesn’t apply to some plans, so insured members should check with their health insurance company to verify if their plan is included.

How to Find the Medical Cost Estimator Tool

Accessing the cost calculator tool varies by the insurance company. Some companies have easily accessible downloadable documents to help people navigate the tool — while other companies’ tools are more challenging to find.

Insured members should be able to find a resource page on their insurer’s website that has a link to estimate costs. Then, they can search for procedure descriptions, such as “chest X-ray,” enter prescription drug names and dosages, and their healthcare provider’s name or facility.

Alternatively, the Centers for Medicare & Medicaid Services (CMS) suggests looking for the insurance company’s machine-readable files. If the machine-readable file is difficult to access on the plan’s website, they recommend using a search engine to search for keywords like machine-readable files, transparency in coverage, in-network rates, and out-of-network allowed amounts, along with the plan’s or insurance company’s name.

The CMS also recommends contacting the insurance company directly if an insured member still can’t access the calculator tool or machine-readable files.

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