What does your health insurance cover?

For many Americans, it’s open enrollment time, the period your employer give you to make changes in your health insurance coverage. You may not understand your insurance very well, but you have to understand this one important fact: your health care providers know even less about your insurance than you do. Most doctor’s offices have a sign that says something like, “Your insurance is your business.” There is know way for your doctor’s office to know all the details of all the different insurance plans.

Each state has different rules, and each part of the country differs in what kind of health plans predominate. In some areas, non-coverage is so common that it almost doesn’t matter what you know, other than the location of a free clinic. But for those of you looking at new or existing health plans, you must read through the documentation, especially the summaries that tell you what is and isn’t covered.

For example, many plans cover a yearly preventative physical. Many do not. If you don’t tell your doctor whether or not preventative services are covered, you may end up with an unexpected bill. Preventative physicals are often covered without a co-pay, but most other visits do have a co-pay.

Your plan will include a glossary, but some terms deserve special attention.

A deductible generally refers to a yearly amount you pay before your insurance kicks in. Your insurance may have a fairly low deductible, say $200.00. Let’s say your new plan starts January 1 and on the 3rd you have a bad cough. You go to your doctor, get examined, get an X-ray and some blood work, and a prescription. The entire service may come to somewhere around $350.00. You would have to pay for the first $200.00 of the bill, and then your insurance would cover the rest, and any other services for the rest of the year. Unless.

Unless you have an out-of-pocket requirement. Some plans may require you to pay for, say, 20% of your costs even after you’ve met your deductible.

To make things even more confusing, some services may not count toward your deductible. Arghh!

One of the popular types of plans meant to defray the cost of coverage is the high-deductible plan. These plans cost much less, but require you to pay a large amount of your costs before the insurance kicks in. These deductibles tend to run in the 1000-3000 dollar range, but there’s a lot of variability.

It’s also important to follow your plan’s network of physicians and hospitals. You plan may pay for most of your services in network, but none at all out of network. To make it even murkier, you may make a choice that sounds logical, but that your plan charges more for. As an example, a friend of mine broke her arm while out of town. She figured that, rather than go to an emergency room and incur a huge bill, she would go to an urgent care center. Oops. It turns out that her insurance would have covered the ER visit, but doesn’t cover out-of-network urgent care.

All of these terms float in an acronym soup: PPO, POS, HMO, PBM, PPA…

Does this all seem a bit confusing? Imagine what your doctor’s office is dealing with—billing dozens of different companies in different ways, never being sure what will or won’t get paid.

I know my non-U.S. readers are going to shake their heads in wonder at the “system” we’ve stumbled into here. Many of the cost-savings ideas are really “cost-shifting” maneuvers. My practice is a very small business—about seven employees. This doesn’t give us much leverage in purchasing a plan for our workers. Low-deductible plans may be out of our price range. High-deductible plans shift the cost of services to the patient, supposedly making them better health-care consumers, reducing waste and costs. In reality, of course, it just makes people avoid the doctor, but that is the idea behind “moral hazard”—if the patient’s wallet is at risk, rather than the insurance company, then the patient will make more economical choices…supposedly. Most sick people are not perfect rational actors.

Well, that’s it for now. Read your choices, and choose wisely.


  1. My grandmother just got super fast quadruple bypass surgery, all covered by St. OHIP (Ontario health insurance plan). There was no wait whatsoever.

    On the other hand I know a guy who had some sort of fracture in his ankle recently, and couldn’t get the walking cast boot – They charge for it, and he didn’t know that before he went to get the prescription filled. He couldn’t afford it. He had to get the prescription changed to a plaster cast. It took two and a half weeks, meanwhile his ankle is ultra painful and he couldn’t work.

    On an unrelated note, I would like to take this opportunity to gripe about how the old and wealthy slurp up all the health care.

  2. Hi Guys,
    I’m sorry this is not on Insurance, but finding this blog may be a God send for me.
    I’m glad I found this site. Especially glad because there is an attorney here who hates the denialists as I do. I am a scientist who only learned these denialists quacks were still around a few months ago. Since then I have become quite frustrated with their attitude and disregard for the truth. The reason I am so glad I found an attorney with this denialist interest, is because I was wondering recently about the possibility of filing a lawsuit against these guys to shut them up for good. I know they will scream about Freedom of Speech, but hasn’t the Supreme Court already ruled that the Safety of the General Public supercedes Freedom of Speech? Example, a person can not shout “fire” in a crowded place. Should that precedent not extend to these denialists spouting lies and misleading people into not taking potentially life saving medications and getting HIV tests?
    Please let me know about the legal aspect of shutting them up for good.
    J. Todd DeShong
    A Satirical Look At A Serious Subject

  3. Of course, the most economical choice is not getting sick in the first place. By shifting the burden of payment onto the patient, they are forced to become more responsible. Before they get appendicitis or pneumonia, they’ll have to ask themselves, “Can I really afford to do this? Is it worth it?”

    Sarcasm aside, I think for-profit health insurance is frankly immoral. The sooner we scrap this “system” the better. But as long as we’re stuck with it, primers like yours are very useful.

  4. I had high-deductible health insurance for a while. Hated it. Hate, hate, hate. Thankfully I’m on a PPO I like now. Well visits are covered, making my entire family more conscientious about yearly physicals!

    As a coda to our leaving the hated high deductible plan (did I mention I hated it?), the provider had a telemarketer call us to administer a survey to gauge how we liked the plan. I couldn’t contain my laughter. “Honestly?” I asked. She gamely replied that there’s a Customer Comments section in the survey and she was more than happy to record my true feelings. With that encouragement, I gave a detailed and colorful accounting of everything I hated about the plan, citing specific examples, while she gleefully took notes. We were both giggling by the end of the call.

    I’m sure my venting to Big Insurance had no bearing on policy whatsoever, but it sure made me feel better. If there is a Heaven for telemarketers, she has earned her place in it!

  5. speedwell

    Folks, we had open enrollment at my company back in October. I normally don’t sign up for the “savings account” where they take money out of your paycheck pre-tax and reimburse you for out-of-pocket medical expenses, but a little bird told me to do it this year. Guess what… right after I did it, not two weeks later, my doctor diagnosed me with insulin-resistant diabetes. Since for some unknown reason my insurance does not cover test strips (a long-term gripe of mine since family members deal with this expense), I can at least reimburse myself with “cheaper” money.

  6. Our flexible benefit plan comes with a debit card–no claims filing needed, no out-of-pocket up front expense, no waiting for reimbursement. However, every 3 months, there’s a letter requesting all the receipts to be faxed to the company. Annoying that.

    Also, be careful. If you have a car/motorcycle accident, many places will just flat out refuse to see you without a large dose of cash. They won’t take either insurance–and forget the stupid claim number the vehicle insurance gives you, you’re wasting your time. They won’t take the health insurance because you might have personal injury insurance and then the health insurance won’t pay until they figure out who is primary. When The Girl wrecked her scooter recently, our PCP wouldn’t see us b/c she doesn’t have the facilities/xray machines/etc. to do that sort of thing ($25 copay), the urgent care center (normally a $30 specialist copay) just flat out refused to see us unless we paid in cash (~$500) so we ended up at the ER ($100 copay). It cost the insurance company more money than either the PCP or the urgent care would have. Stupid system. Stupid, inefficient, labyrinthine, obtuse, opaque, ineffective, wasteful, miserable system.

  7. Wow, I’m so glad I’m british. I know the NHS is a long way from perfect, but you guys have a completely insane system there.

  8. Sometimes the savings the insurance company expect from a high deductible and increased reticence of patients to go to a doctor don’t materialize. Or they can backfire.

    A patient may wait until the problems get painful and debilitating enough to justify the high deductible. Small, easy to treat, medical problems becoming much more complicated and expensive to treat.

    The kicker for me in insurance is that the insurance company has all the cards and enough slop in their system to play your case and situation any way they want. In part because they can work the definitions of terms like ‘preexisting condition’ and ‘adequate treatment’ to mean anything they wish.

    All this made worse because the person making the call over the phone has no actual medical training or liability. The HS dropout who punches in the wrong code and announces to the doctor that the treatment is not needed can’t be sued and often doesn’t know, or care, enough to even lose sleep over the injustices they commit.

    Of course the doctor or patient can appeal. Given enough time and effort it all might get straightened out. Not that the insurance company has any motivation to help it get straight. They make money increasing premiums and denying services. For them clerical incompetence, dyslexic data input ,and unnavigable automated phone systems are ways of making money by denying payment and services without having to actually deny payment or services.

    Reminds me of a trick from the old navy. When the water got scarce the water barrel would be hoisted up to the crow’s nest. Anyone with a thirst between when regular rations were issued would have to climb up to drink.

    Insurance companies have long known that if they make their system slow, frustrating and generally painful to deal with people will shy away from asking for coverage of even things they are clearly entitled to.

  9. See what people fail to understand is that with a socialized healthcare system, it’s essentially the same as insurance in the sense that we all pay into a risk pool. The only difference is that the provider has no incentive to deny care, and that it becomes a much larger entity. It’s not without its problems but it remains a superior means of access to healthcare. Meanwhile the only people turning a profit are the doctors and they actually work for the money.

    Then again who am I kidding? I think access to healthcare is a right and not a privilege. My Firefox spell-checker doesn’t even think it’s a word.

  10. Perky Skeptic –

    Nope, it didn’t do a damn thing, except possibly entertaining your telemarketer and her co-workers. For a short while I worked for a firm that does such surveys (until I got an inner-ear injury that fucked that and my much more lucrative handy-business for a while), their bread and butter is doing the same thing for utilities and AAA. The utilities would occasionally send reps to buy us pizza (so “survey technicians” would actually show) and talk about why we were doing these surveys. The time it happened while I was working there, I got to talking with one of the reps, who happened to smoke. I asked him if they really did anything with the opinions they gathered – especially the complaints. He admitted they didn’t – that those portions of the surveys were totally PR. The only aspects of the surveys they used, were those relating to billing methods and how aware customers were of the sorts of things the utilities do for the communities they serve. And the latter was mostly to figure out where they should actually make donations and where it doesn’t matter.

    None of these companies actually give a shit about your complaints – or your compliments. They just want your money and to spend as little as they can get away with. But since their calling, they’re happy to provide the catharsis of letting you vent and pretending they actually care.

  11. Good post, informative as always. I do have one small nitpick though:

    “There is know way for your doctor’s office to know”

    The first know should be a no.

  12. Ramel – “Wow, I’m so glad I’m british. I know the NHS is a long way from perfect, but you guys have a completely insane system there.”

    Made all the worse because if the insanity gets to us mental health services are even less well covered by the insurance companies.

    I am always struck by the number of Brits and Canadians who will complain about their medical systems. The usual issues, many of which are shared by anyone with typical insurance in the US – long waits and lack of choice of doctors being the first to come up – are always sore points. But, almost without exception, I have yet to find anyone who is part of a national health care system who would even think about giving it up.

    At the suggestion that they might go back to a private pay system typically the the wording of the response is not a mild “no” so much as “Hell no”.

    People complain. People in national health care systems complain about them like soldiers complain about the food. Mostly because it is an easy subject and it gives them something to say. Such systems can always be improved. But, how many of those people with national health care want to give it up? Very few.

    One day the US will grow up and have a national health care system.

  13. Health care delivery: Ur doin it rong.

  14. Thee Erin

    Uh oh. Are you really asking your readers to shed a tear for doctors over their “never being sure what will or won’t get paid.” I hope that’s not your underlying purpose here.

    Because there IS a way for most doctors to know all or most of the details of different insurance plans, even the practices with “about seven employees.”

    It’s called READING. The kind of reading I’m referring to is of the same type that physician tort reformers use to become selfishly adept at explaining evidentiary collateral source rulings.

    Please avoid this “poor me” sentiment. You are not holding the short stick on this one.

    Given a choice, which of the following would you rather be?

    A.) a provider with an insurance reimbursement problem for having treated a sick patient


    B.) the sick patient with insurance issues rendering a greater than average chance of becoming even sicker

    See what I mean?

  15. Anonymous

    See what I mean?


  16. Great information! A lot of people don’t know what their insurance does for them. this is great to get more info about it.

  17. Seems to be great information,includes
    full details about Health Insurance. Thanx a ton for leaving such useful information. :):):)

  18. LanceR, JSG

    Deborah the SpamBot! Aargh.

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