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Overview
Video Play Time: 18:51 min
- Introduction (0:00 – 1:32)
- Premium (1:32 – 2:10)
- Deductible (2:10 – 3:56)
- Out-of-Pocket Maximum (3:56 – 4:53)
- Co-pays vs. Co-Insurances (4:53 – 10:00)
- Co-pays (5:03 – 6:25)
- Co-insurances (6:25 – 10:00)
- Visit Limitations (10:00 – 14:09)
- Covered Services vs. Approved Services (14:09 – 15:46)
- Prior Authorization (15:46)
- Review and Conclusion (18:12 – 18:51)
Amplify OT Resources
- Article – How Health Insurance Impacts Occupational Therapy
- Podcast – Insurance and How it Impacts Our Plan of Care
This Lesson’s Handout
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Lesson Content
Responses
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There is a huge gap in consumer awareness/education (especially for seniors) re: covered vs approved services. Oftentimes patients/spouses will say they called the MA plan and are told OT is covered, but then don’t understand why as clinicians we are sometimes the bearer of bad news that services may not be approved or were denied.
I couldn’t agree more! It would be so frustrating in acute care to try and explain this situation and unfortunately is causes some folks not to trust us when it’s the insurance plan they shouldn’t trust…
I do not really understand what a deductible is, why are we paying out of pocket for a covered service before coverage kicks in? Is this referring to the fact it is a new service being received or your health insurance isnt fully your health insurance yet? (sorry I think I worded that weird, but does that make sense?)
Jordyn, this is a great questions and I wish I had a satisfying answer for you. Unfortunately, per usual it comes down to money. Insurances primarily use a deductible to mitigate financial costs and “moral hazards”.
The “moral hazard” piece argues that having a deductible gives people “skin in the game”. So, because the beneficiary (insured person) has a deductible, it incentivizes them to use services wisely and keep themselves healthy vs perhaps engaging in risky behavior because of the lack of financial consequences for risky behavior. Many different insurances have deductibles such as car insurance or home insurance where you have to pay a certain fee before the insurance coverage kicks in. (For example, I had to pay $500 for our car insurance deductible when I got into a car accident as a teen. The argument being that if there wasn’t a deductible, I might drive in a more risky way.) Of course, the other side of this argument is that a deductible prevents beneficiaries for seeking needed services and thus resulting in more expensive care long-term and poorer health.
The financial hazard piece is pretty much what it sounds like. It helps reduce costs for the insurance company and shares more of the cost with the beneficiary. So, it reduces out of pocket risk for the insurer and increases revenue to cover services. This is why if you have a higher premium insurance you over have a lower deductible and vice versa. It is all about cost sharing.
The pros and cons of high-deductible plans is actually a current debate in Congress!This article highlights some interesting conversations around the role of deductibles in health care. https://www.politico.com/news/2023/08/18/lawmakers-high-risk-health-plans-00111735
Once your health insurance is activated you are fully ensured. The purpose of health insurance is partially to make healthcare more affordable but primarily to protect against large unexpected healthcare needs. This is why some health young adults go without health insurance because they don’t feel like the get the full benefit of insurance since they never need enough care to spend down their deductible. (I am not an advocate of not having insurance because after working in Acute I know how quickly we can find ourselves in unexpected health situations, it’s just one way some think about insurance).
Your premium does not go towards your deductible. The general idea of premiums and other out of pocket payments that go to your insurer is that you are kind of paying into a pool of money to be used to pay for healthcare. So some years, you may use far less than the amount you pay in and other years you may use more than you pay in. This is part of why the ACA wanted to require everyone to have health insurance – the idea being that it would bring down costs for everyone if everyone is paying in and then hopefully when you need care, then it won’t bankrupt you.
Does all of that make sense? Not sure if that is a satisfying answer but let me know if you have any other questions!