VantagePoint: Decoding the Confusing World of Health Insurance for Patients

VantagePoint: Decoding the Confusing World of Health Insurance for Patients

At Vantage Mental Health, we’re on a mission to advance community well-being by providing and supporting transparent and accessible mental health services. We understand the many barriers that prevent individuals from seeking mental health services; difficulty finding a provider with availability, stigma, and most commonly, the cost of care. We’re focused on breaking down all three of these barriers on the daily by building and growing a diverse team of mental health professionals, speaking out to end the stigma around mental health treatment, and empowering our clients with knowledge, tools, and resources to understand how their care will impact them financially. 

If you've ever found yourself scratching your head over a medical bill or feeling overwhelmed by insurance jargon that feels like it may as well be a foreign language, you're not alone. Our goal with this blog is to help demystify the complex world of healthcare costs and insurance benefits so you can not only start your journey to better mental health with confidence and clarity but have an easy-to-understand reference guide to help you navigate your whole healthcare journey. 

Understanding Your Type of Plan: High Deductible or Copay Plan 

High deductible health plans (HDHPs) were developed in the early 2000s to help reduce the overall cost of healthcare in the United States. The idea was that if clients had more “skin in the game,” they would make wiser healthcare choices. With these plans, you pay lower premiums but have to cover the first several thousand dollars of healthcare expenses out of pocket. The goal is that you might end up spending less on healthcare overall. These plans are often paired with a Health Savings Account (HSA), which is designed to help pay those out-of-pocket costs using pre-tax income. However, you must decide how much money to contribute to your HSA. 

While this concept has some benefits, and it has indeed reduced healthcare costs at a national level, several significant problems have emerged. 

Many people end up spending less on healthcare because they receive less care. It remains nearly impossible to shop around for healthcare services and find a better deal, so instead, people often postpone or forego care altogether. If individuals were overspending on unnecessary healthcare, this model might work well, but in reality, most of us just want the care we need. Few people find joy in making unnecessary trips to the emergency room. 

The true cost of a high deductible health plan is the premium plus the amount you should be contributing to your HSA. Unfortunately, many people don’t choose to fully fund their HSAs, and because HSA contributions are typically made throughout the year, a large medical expense early in the year can leave you with a substantial bill. 

Healthcare is intended to protect us from the significant financial burdens of medical expenses. High deductible plans, however, often feel like a gamble—hoping that you can make better choices and reduce your costs. But that isn’t the purpose of insurance. A deductible of $3,000 to $10,000 (or more) is still a large sum for most people and can be an overwhelming burden. Meanwhile, insurance company profits have soared because they are taking on less responsibility for the cost of care, contributing to the growing problem of medical debt. 

Understanding Fee Schedules and Charges: It's Not What You Think 

All medical offices have what is commonly referred to as a “Fee Schedule”.  You can essentially think of a fee schedule as a service menu, or a price list. There are two types of fee schedules, a “Self-Pay” fee schedule and an “Insurance” fee schedule. Self-pay fee schedules list the charge for each service that will be billed to a client who has either a) opted not to use their insurance or b) does not have insurance. Self-pay charges are often lower than those billed to insurance companies to account for typical adjustments (more to come on adjustments below!). Insurance Fee Schedules list the amount that is billed to your insurance provider but is not the same dollar amount you and/or your insurance end up paying for the service. Wait- say WHAT?!  

For clients using their health insurance, that initial charge is more of a starting point than a final demand. When your medical provider sends it to your insurance company, it goes through a process called "adjustment." The result is the "allowed amount.” Let’s break it down… 

When you receive medical care from a medical provider or group that is “in network” with your insurance plan, it means there is a mutual contract in place between the provider/group and your insurance company. In that contract, there is a table that outlines a list of contracted rates, or the “allowed amount” that the insurance provider has agreed to reimburse for each service and the provider or group has agreed to accept. When medical providers sign an insurance contract, they are legally obligated to accept the allowed rate for a service and cannot charge the patient for the difference. The difference is called an “adjustment”, which ultimately is a discount for the patient.  

To put it simply, if you opt out of using your insurance or do not have insurance, expect to pay the “Self-Pay” rate for a service. If this causes financial hardship, ask your provider if they offer a sliding fee scale, which may reduce your financial responsibility based on your income and family size.  

If you choose to use your insurance, first, always make sure the provider is in-network! You can do this by calling the number on the back of your insurance card and speaking with a customer service representative. Don’t let the charge amounts scare you, work with your provider to understand what services you’ll receive and ask your insurance provider the allowed amount for each service as well as any copay responsibility. This will give you a better idea of any potential out-of-pocket costs you may incur.  

It's also important to work with a provider you trust. At Vantage Mental Health we realize that insurance is overwhelming and complicated, and we don’t like dealing with it either. However, it is the best way for most patients to access care, and so we are committed to doing our best to helping our clients navigate this. When you see a provider at Vantage Mental Health we always check your insurance before your visit to make sure your information is entered correctly in our system, ensuring your claims are processed properly by your insurance and you don’t receive any surprise bills We also know which insurance networks we are in network with, and In the case we are not in network with your insurance, will work with you to find a solution.  

Insurance Plans: Understanding Your Options 

Private Insurance 

• Think of it as a membership where you pay a monthly fee (premium) for healthcare benefits. 

• Private insurance is obtained one of two ways, through an individual’s (or their partner or parent’s employer), or purchased on the open market (this is what we refer to as “MNsure” here in Minnesota)  

• You may need to pay a certain amount (deductible) before the insurance starts covering costs. 

• After meeting your deductible, you might share costs with insurance (coinsurance) or pay a fixed fee for services (copay). 

Medicaid 

• For those who need financial assistance, Medicaid provides essential health coverage. 

• Coverage varies by state but generally includes a wide range of services with minimal to no out-of-pocket costs. 

• You must complete your state’s application process to determine if you qualify.  

Medicare 

• Once you reach 65, Medicare becomes your primary health insurance option. 

• It comes in different parts: Part A (hospital), Part B (medical), Part D (prescription drugs), and Part C (Medicare Advantage plans). 

• Your Medicare Part B is what will be used for outpatient mental health treatment.  

Coordination of Benefits 

• If you have more than one insurance plan, they work together to ensure comprehensive coverage. 

• One plan becomes primary (pays first), and the other becomes secondary (covers remaining eligible costs). 

• Individuals with private insurance may be eligible for a secondary Medicaid plan that covers additional costs not paid by your primary insurance. This all depends on your income threshold.  

Key Terms to Know 

Knowledge is Power! Knowing what each of these terms means by simple definition will empower you to make informed decisions about your care!  

Deductible 

• The amount you pay for covered, in-network health services before your insurance starts to pay. All medical costs, regardless of if they are with a different office or provider, will count toward your deductible.  

• Example: if you have a knee surgery at the beginning of the year and hit your deductible, your insurance will cover all your other medical services throughout the year regardless of provider or specialty, except for any copay or coinsurance responsibilities.   

• Most insurance plans have both individual and family deductible amounts, and with some plans, these are embedded while others are not. If you are not sure if your deductibles are embedded, it is best to reach out to your insurance provider for clarification.  

Coinsurance 

• After your deductible, you and your insurance share costs.  

• Example: You receive a $100 service from your medical provider, and your insurance plan offers 90%/10% coinsurance. Insurance will pay $90, and you will be billed the remaining $10.  

Copay 

• A fixed amount you pay for certain services, like $20 for a doctor's visit or $50 for a specialist. Some mental health visits are considered “office visits” and some are considered “specialist visits”, depending on the health plan.  

• If your insurance card lists two different copay amounts, call them to clarify which copay to expect for your therapy or psychiatry visits.  

• Your healthcare provider is contractually obligated by your insurance provider to collect copays, and in most cases the amount is due at the time of service.  

Charge 

• The initial price listed on your medical bill before insurance processing. 

Allowed Amount 

• What your insurance company and medical provider or group have agreed upon is a fair price for the service.  

Adjustment 

• The difference between the charge and the allowed amount.  

Write-off 

• The portion of the bill that's forgiven and you're not responsible for paying (this is the same amount as the adjustment).  

Patient Responsibility 

• The amount you're expected to pay, including deductibles, coinsurance, and copays. 

Out-of-Pocket Maximum (OOP Max) 

• The most you'll pay in a year for covered services. Once reached, insurance covers 100% of covered services. 

Out-of-Network Care: Proceed with Caution 

Receiving care outside your insurance network can lead to higher costs: 

• Your insurance may pay less or nothing for these services. 

• You might face a higher deductible or coinsurance. 

• You could be responsible for charges above what your insurance considers reasonable . If a provider is out of network, they do NOT have a mutual contract with your healthcare provider. This means charges will not be adjusted (discounted) like they are for in network providers.  

Empowering Yourself: Becoming an Informed Patient 

1. Know Your Plan: Familiarize yourself with your insurance documents. If your insurance is offered through your employer, attend any pre-open enrollment meetings or webinars to best understand the options offered to you, or work directly with your HR team to understand your plan offerings.  

2. Ask Questions: Don't hesitate to contact your insurance company or medical providers for clarification. When in doubt, ask. At Vantage, you can expect we will always take the time to help you understand your bill.  

3. Keep Records: Maintain a file of all your medical bills and insurance communications. 

4. Review for Errors: Mistakes happen. If something looks incorrect, speak up. 

5. Utilize Preventive Care: Many plans offer free preventive services – take advantage of them! While they may not feel needed at the time, preventative care can help identify and proactively treat issues, not only having a positive impact on our long-term health but saving you money too!  

Remember, understanding your healthcare benefits is confusing for everyone! It might seem daunting at first, but with each bill and claim, you'll become more confident in navigating the system. 

By arming yourself with this knowledge, you're taking control of your healthcare journey. You're not just a patient – you're an informed consumer, capable of making the best decisions for your health and your wallet. 

So take a deep breath, and remember: when in doubt, ask questions. In the world of healthcare, being proactive about understanding your benefits can lead to better care and fewer surprises down the road. 

Woah- that was a lot! If you’re already feeling overwhelmed with information, follow us over on our social media pages where we will be sharing this information in bite-sized snippets over the next week that you can save and refer back to in the future!