“You are covered” does NOT mean you are covered. Most people think this means that the insurance company will pay this in full but it doesn’t. It means they will pay for part of the “allowable” charge. Of course this allowable charge is usually half of what the doctor actually bills you. For example, if the doctor charges you $200, and the allowable charge is only $100, and the insurance company pays 60%, then they will pay $60 and you pay out of your pocket $140. Many people think the insurance company will pay the entire $200 but they don’t. When my dad had his stroke, he qualified for in home physical therapy and they were told it was “covered” under medicare. Again, they thought this meant it was fully paid for. After checking into it, I found out that medicare only pays a certain amount of money and the patient is responsible for the rest.
Even auto insurance has the same kind of language. When my daughter was in a car accident, which was not her fault, she was happy because she was “covered.” Even though her van was totaled, she thought she would get a replacement for it. Imagine her horror when she was told that the insurance company would only pay her face value of the van (after prorating it for the year etc.) and did not even get enough money to buy a new used vehicle. Even though she was “covered,” she had to get a loan to get a new car.
Now you wonder why we even have insurance but think about the costs if you didn’t have it. Is it worth having? It depends. I like to think so in case something catastrophic happens like the time our house caught on fire or when I had to have surgery. I still had to pay a lot but not like I would have if we didn’t have the insurance. Sometimes we know something is “covered” but if we file the claim it will make our insurance premiums go up which in turn would cost more than if we just paid for whatever we need ourselves.
The bottom line (or what I want my students to know): Before you agree to any medical procedures, find out how much it will actually cost you. I have had the dentist call the insurance company to find out what they will pay for what is charged and how much it will actually cost me in the end. This keeps me from being surprised when I get the bill. Before I file a claim on my homeowners or car insurance, I find out how this will affect my premiums. Remember: “covered” does NOT mean covered.
Photo credit: Russell Proctor’s insurance by olivander