What to do when your health insurance doesn't pay for a medical service

Insurance can be complicated, and medical billing can be even more difficult to understand. Most people would prefer to just go to the doctor’s office, have insurance take care of all the payments in the backend, and never think about the bills again. Unfortunately, insurance doesn’t always cover everything. What happens then? Here are the things you should understand about health insurance claims in order to avoid unexpected medical bills, plus a guide on what to do if your health insurance won't pay for a medical service.

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How does insurance and paying for my medical services work?

There are volumes and volumes of books on how insurance and medical billing works. While there are nuances, here’s the basic outline of how it works.

Your health insurance plan offers coverage of certain healthcare services and treatments, and it outlines how much it’ll pay for each service and how much you’ll be responsible for. Provided that you have a managed care plan, which most Americans with health insurance do, your plan will also provide information as to which healthcare providers and facilities are in-network. Always ask to understand what insurance will and will not pay for, and how much they’ll pay for, before visiting a healthcare provider.

After you visit a healthcare provider that accepts your insurance, they’ll typically file a claim on your behalf. Your insurance company already has set rates that they’ll pay out for each type of service, and they’ll pay your provider that amount regardless of how much the provider has listed in their claim.

If your healthcare provider is in-network with your insurance plan, then they’ll simply zero out the balance. If they’re out-of-network, however, whatever the insurance company does not pay for will be billed to you. This is why you may still receive medical bills after insurance pays its portion of your costs.

It’s also possible that the claim will be denied completely and you’ll end up with the entire burden of the bill. If your insurance company decides to deny the claim, it must notify you in writing as to why your claim is being denied, and it must do so in within certain time frames (this depends on the type of claim). It must also provide you with information about the appeals process.

Why would health insurance not pay certain claims, and what can I do?

There are many possible explanations as to why your health insurance company may not pay certain claims. Here are the four main categories of reasons, along with suggested action items:

1. Human error

It’s possible that your insurance company made an error in processing your claim, or perhaps they gave you misinformation that led you to make a doctor’s visit or undergo a treatment that isn’t fully covered. Or maybe your healthcare provider billed your visit incorrectly. One example is when a well-woman visit that is free, preventive care is categorized as a specialist visit to the gynecologist. Medical billing is complex and can be error-prone, so call your healthcare provider and insurance company to try to rectify these errors first, and then go through your insurance company’s appeals process if necessary.

It's also possible that your insurance company required additional information but either your provider did not provide it or the information got lost during processing, leaving your claim hanging. While this may not seem like your fault, the burden is on you to follow up with your insurance company and your healthcare provider to make sure all the information needed is provided and processed so your claim can be paid.

2. The provider is not in-network

While many people think that a healthcare provider accepting their insurance is the same as being covered, it’s actually not. To avoid getting an unexpected medical bill in the mail, you also need to verify that this healthcare provider is in your insurance plan’s network. If a provider accepts your insurance but is not in-network for your plan, it means they will bill your insurance company for the service and then charge the balance of what insurance won’t pay for directly to you. If you have a PPO plan, this typically means paying higher, out-of-network costs. But if you have an HMO plan, you may be stuck with the entire cost of the visit. Note that it’s important to determine whether your healthcare provider is in-network with your specific health insurance plan, as insurance companies can have several plans with different provider networks. Make sure to get this confirmation directly from your insurance company, not via your healthcare provider, as the insurance company has the final word on what gets covered.

3. Bundling

Another type of misunderstanding that can occur is one between your healthcare provider and your insurance company, something known in the medical billing industry as "bundling." Bundling is when a secondary procedure is considered part of a primary procedure. For example, if an incision is required before a certain surgery, your insurance company may “bundle” the two procedures together and only pay out one claim. However, your surgeon may bill the incision and the surgery separately, thus leaving you with the bill for the incision claim. Because these bundling cases are mired in medical billing codes and jargon, it's worth considering consulting a medical billing professional to help you dig through it.

4. Lack of pre-approvals/referrals

Some plans require referrals or other pre-approvals to see a specialist, and if you get your medical care without this pre-approval, it's possible that your insurer will deny your claim. If this is the case, make sure to get a referral immediately so your future visits are covered, and see if your past claims can be reimbursed now that you have a referral. If not, you can appeal via your insurance company's official process.

Most plans will also only cover medically necessary care, and your insurer may deny your claim if they feel the service wasn't medically necessary. If this is your situation, you can ask your doctor to submit a "Medical Necessity" form on your behalf (or any other information requested by your insurance company).

5. Your insurance does not cover the medical service

Lastly, it’s possible that your medical service was simply one that is not covered under your health insurance policy. There are always exceptions, so speak to a representative of your insurance company to understand why your care was not covered and try to appeal it if you feel like an exception should be made.

What are some common medical treatments not covered by insurance?

Coverage varies heavily depending on policy, but most health insurance plans do not cover the following procedures:

• Adult dental care.
• Cosmetic surgery.
• Fertility treatments.
• Long-term care.
• Private nursing.
• Weight loss surgery.

You can find out what is covered by your health insurance plan by reviewing your plan’s Evidence of Coverage (also known as Certificate of Coverage) and speaking with a representative of your insurance company if you have further questions.

What can I do if I’m stuck with a bill that health insurance won’t pay for?

If you’ve already tried appeals and other tactics mentioned above and are still stuck with a medical bill, you can try to fight your bill or reduce the burden through various tactics.

One way is to learn how to negotiate medical bills with insurance and healthcare providers. You can work with them to negotiate an interest-free payment plan, a discount for immediately paying the balance, or another compromise solution that will help you pay your bills without them being sent to the debt collectors and damaging your credit. To help you negotiate, you can use tools such as Healthcare Bluebook to determine the fair price of various treatments in your area. You can also ask and see if there’s any sort of financial assistance program; many hospitals have them.

Another option is to work with a medical billing advocate who can reduce your costs by looking for abusive, fraudulent, and erroneous billing practices. While it may sound outrageous, industry estimates say approximately 80 percent of medical bills have errors. Many medical billing advocates will also negotiate with healthcare providers on your behalf.

Whatever you do, make sure to be persistent but polite, and keep good documentation of your efforts, including the date and contact info of each person you speak with. And don’t procrastinate on having these conversations. Once a bill gets sent to the debt collectors, not only does your credit get damaged, but the bill is also effectively out of your healthcare provider's hands, making it much harder to negotiate.

How can I switch insurance plans?

You have several coverage options.

1. Marketplace/“Obamacare” plan. You can enroll in a Marketplace health insurance plan, also known as Obamacare or Affordable Care Act insurance. See plans and prices here.
2. Medicaid. You also may be eligible for Medicaid, depending on your income. You can see if you’re eligible and apply here.
3. COBRA. If you’ve been laid off recently, you usually have the option of COBRA, where you pay the full premium of the same insurance your employer purchased for you. COBRA is typically much more expensive than Marketplace insurance, but it allows you to continue the coverage you already had. Learn more about comparing COBRA with Obamacare health insurance.
4. Medicare. Once you turn 65, you’re eligible for Medicare. Call us to enroll at (855) 677-3060.

You can enter your zip code below to see if you're eligible for Medicaid or a subsidy to lower the cost of Marketplace insurance.

If you have questions or need help enrolling, you can call us at (872) 228-2549.