3 Ways Your Health Insurance Company Is Scamming You
This post explores how insurance companies can trick you into making decisions that are detrimental to your health, how most Americans don’t realize it, and the ways you can protect yourself.
There's no doubt about it: The U.S. healthcare system has its fair share of problems.
There are so many issues, in fact, that a whole book can be written about them (and has been! It's called America's Bitter Pill).
But one area that tends to be overlooked is what happens when you receive care from a healthcare provider. Once you have a diagnosis, insurance companies are all too happy to charge you a fee for the privilege of paying your bill. You see this on all the time. A patient goes to their primary care doctor for their annual exam, and the doctor decides they need some tests done. The patient happily obliges because they know this is just part of getting their annual checkup and will “catch an early problem” before it becomes detrimental to their health.
What insurance companies do not tell you is that those same tests can be quite costly. In fact, they can cost more than the annual visit itself! Patients don't realize this when they agree to it, and because it is a new test that may show an early problem, your insurance company will most likely charge you a fee for it.
This is where my "how to" post kicks in.
How Insurance Companies Trick You Into Getting Something You Don't Need or Want: #1: Out-Of-Network Care And Extra Charges [PART 1]
So chances are if you read this blog, you have some sort of healthcare insurance plan .
But how much of that insurance do you really know? Do you know what your plan covers, and how it will help you pay for the treatment that your doctor recommends?
A lot of people don't, and if you are one of those people, you're not alone. In fact, a recent survey from Gallup revealed that only 18% of Americans could correctly answer four questions about their healthcare insurance plans. The other 82% either got answers wrong or didn't understand the difference between health insurance and the plans.
Are you one of them? Don't worry, we can fix that.
In this post, I'm going to walk you through how your insurance company may be tricking you into getting more (or less) healthcare than they should.
3 Ways Getting Care Can Be A Scam: #2: Out-Of-Network Care And Extra Charges [PART 2]
Earlier in this post, I mentioned that one way your insurance company may be tricking you into getting unnecessary care is by charging a "copay" for an annual checkup.
To give you an idea of what a copay is, here's an example:
Let's say you visit a doctor for your yearly exam (see how we keep using that word?) and the doctor tells you that you need to have some tests done for your annual checkup: "Blood pressure, cholesterol, and EKG." Not only will it cost $100 each (the primary care doctor's fee), but if you go through with the tests it will cost you at least another $600 ($200 for each test). That adds up to $700.
What your primary care doctor may not tell you is that they are out of network for your insurance. This means you have to pay for all of the tests out of pocket, and at a much higher rate than what your deductible or copay would have been. This can add up to quite a bit more: For our example, let's say the actual cost for each test is $1,000 (which is much more than Medicare rates charge). That means you just spent another $3,000 on healthcare that you didn't have to pay for if you had visited an in-network doctor.
The only way to avoid this is to look up the doctors you are thinking of visiting before you go and make sure they are in your insurance network. However, if they aren't, be aware that you may have to pay more and ask your doctor if there is an alternative treatment.
3 Ways Getting Care Can Be A Scam: #3: Flexible Spending Accounts & Annual Caps [PART 2]
You most likely have a flexible spending account (FSA), but do you know how it works? Let me give you an example of one from the perspective of the healthcare insurance company. Imagine it's January 1st and your employer has allocated $2,000 for employee healthcare for the year.
At the end of the year, if you didn't go over that amount (let's say it was $3,000) your insurance company gets to keep the money. If you did go over that amount (let's say it was $5,000) they're probably not going to pay you back because if they did they wouldn't make any money. It's in their best interest to have as little paid out as possible.
What many people do not realize is that there is a penalty for using your FSA in one year and then taking more the following year to make up for it. But before I explain it, let me ask you this: Would you rather have $1,200 in the bank right now or a credit card bill that's going to be due in 14 months? If you said you'd rather have the $1,200, then that's exactly what your health insurance company wants to hear.
Your FSA is a medical savings account (MSA), and while many people use it correctly and are able to get money back at tax time, there are also people who take more than they should.
Conclusion
Now that you have an idea of why insurance companies can be trying to trick you into getting what you don't need or want, let's conclude this post by answering some questions:
Do you know your insurance company's network? Do you know how healthcare is covered in your plan? How much of the costs of healthcare are paid by insurance companies? How much should a patient spend on their healthcare per year? Are there any other issues that apply to you personally that may be tricking the health insurance companies in their practices? If so, how can they be fixed?
The answers are below.