Health Insurance

Sometimes I think explaining the Holy Trinity is far easier than explaining how health insurance works.

Truly, I spent the greater part of the morning on the phone with Blue Cross Blue Shield of Texas trying to figure out what they mean by “maximum out-of-pocket” a.k.a. “co-insurance stop loss.”  It seems rather simple and indeed something that should be self-explanatory and work in favor of the insured.   The easy definition is as follows:

“Coinsurance is expressed as a percentage or pair of percentages generally with the insurer’s portion stated first. The maximum percentage the insured will be responsible for is generally no more than 50%. Coinsurance indicates how an insurer and an insured will share the costs of a bill that exceeds the insurance policy’s deductible up to the policy’s stop loss. Once the insured’s out-of-pocket expenses equal the stop loss the insurer will assume responsibility for 100% of any additional costs.”

What this nice definition fails to mention is that the out-of-pocket expenses are only considered up to the what the insurance company (in our case BCBS) accepts as an “allowable amount” for the medical expense.  If the insured on a PPO goes in-network for a medical procedure, the “allowable amount” for the procedure is agreed upon by the provider (e.g. the doctor) and the insurance company well in advance.  The insured meets the deductible, pays their portion of the co-insurance, and reaches the stop loss without paying unreasonable amounts of money.  HOWEVER, if the insured goes out-of-network (as we did for Adam’s surgery since the doc was the only one in a reasonable driving distance to do this procedure) all bets are off.  The provider can charge what s/he wants. The insurance company, at best, will only still pay the allowable amount for an in-network doctor which is in our case was only 1/5 of the actual cost of the procedure.  AND the deductible, co-insurance, and stop loss (if there is one) is ONLY applied to that “allowable amount,” not the total charges.   The insured can get “balance billed,” as we did, and pay the entire portion the insurance company does not pay.

At the end of the day it all really stinks. But it’s far better than socialized health care.