Get the facts: Why am I being billed for care I received?

• Understanding why a doctor or hospital sends you a bill — even when you have health insurance — can help you feel more in control and reduce the risk of receiving an unexpected bill in the future.

• When an in-network doctor or hospital bills you, it’s often because you have not yet met your deductible, or your health plan requires you to pay coinsurance for the service you received.

• It’s understandable if you’re questioning why you have to pay for the full cost of most of your care until you’ve met your deductible, but it’s important to keep in mind that a deductible doesn’t negate the value of your health plan.

• To help avoid unpleasant billing surprises, find out if a service or procedure is covered by your plan and whether you’re responsible for paying a deductible, copay or coinsurance. Your health plan might offer tools to estimate the cost of your care, and you could consider shopping around to see if you can save money by choosing a different doctor or hospital. 

It seems like practically everything is more expensive these days. Whether it’s everyday necessities like groceries and clothes or big-ticket purchases like a house or car, the sticker price is almost always higher than it was just a few years ago. 

With so many of us feeling financially pinched, any unexpected cost can be stressful. And healthcare is a common culprit because of the way our healthcare system works. It’s not always easy to figure out what care will cost you in advance. This leaves many people wondering if they’ll get a bill after a doctor appointment, procedure or hospital visit – and worried about how they’ll pay it.

Understanding why a doctor or hospital sends you a bill — even when you have health insurance — can help you feel more in control and reduce the risk of receiving an unexpected bill in the future.

When a doctor or hospital bills a patient, it’s typically for one of the following reasons:

• You haven’t yet met your deductible.
• Your health plan requires you to pay coinsurance for the service you received.
• The claim your healthcare provider submitted to your health plan wasn’t approved.
• You received care from a provider who doesn’t participate in your health plan’s network.
   

You can find more information about claims denials and out-of-network providers in separate articles, but if one of the first two scenarios applies to you, read on to better understand why you received a bill and what your next steps should be.

In most cases, the cost of care is split between you and the organization that sponsors your plan. The plan sponsor depends on the type of health insurance you’re enrolled in:

• Medicare: The federal government through the Centers for Medicare & Medicaid Services
• Medicare Advantage: The private health insurance company that offers the plan you chose
• Medicaid: Your state government through its Medicaid agency
• Commercial (i.e. insurance offered through work): Your employer
• An individual plan sold on a state exchange: The private health insurance company that offers the plan you chose
   

While plan sponsors pay for the vast majority of people’s healthcare costs, they usually require the people enrolled in their plans to share in those costs by paying a deductible, copays and/or coinsurance.

It might seem unfair that plan sponsors don’t pick up the full tab, but the idea of cost-sharing was born out of a real problem in our healthcare system — rapidly rising costs. The primary reason healthcare is so expensive is because healthcare providers — hospitals, doctors and pharmaceutical companies — have been charging higher and higher prices, a trend that’s persisted for decades.

Those rising costs have strained plan sponsors’ ability to afford to continue offering healthcare benefits. Requiring plan members to spend some of their own money to pay for the healthcare services they use accomplishes two goals:

• It means more funds are available that plan sponsors can use to lower healthcare premiums.
• It discourages unnecessary and wasteful use of the healthcare system. The general idea is that by requiring people to spend some of their own money on healthcare, they’ll be more likely to get care only when it’s truly needed. Paying out-of-pocket costs also encourages people to shop for care, which can potentially lead to considerable savings because the price for many services can vary dramatically from one provider to the next. An MRI, for example, can cost hundreds or even thousands of dollars less depending on where it’s provided.
   

Check out this article to learn more about why premiums and out-of-pocket costs have been going up for so many people in recent years.

If you’re enrolled in a health plan with a deductible, your coverage for most types of care won’t kick in until you’ve reached the amount of your deductible. For example, if your plan has a $2,000 deductible, you’re responsible for paying the first $2,000 of your healthcare costs. The exception is preventive care, which is covered 100% even before you reach your deductible. So you shouldn’t be billed for things like an annual physical.

It’s understandable if you’re questioning why you have to pay for the full cost of most of your care until you’ve met your deductible, but it’s important to keep in mind that a deductible doesn’t negate the value of your health plan.

• Health plans with deductibles typically have lower monthly premiums than plans without deductibles, so you’re saving money on your premium payments every single month. If you’re in good health and only see the doctor occasionally, choosing a high-deductible health plan often makes good financial sense.
• A plan with a high deductible still provides the peace of mind that comes with knowing your out-of-pocket costs are capped as long as you get care from in-network providers. Your plan’s out-of-pocket maximum protects you from having to pay the full cost of your care if you should experience a major health issue like a heart attack or become seriously injured in a car accident. The care required in those types of situations can potentially lead to hundreds of thousands of dollars in bills from doctors and hospitals. Most Americans quite simply couldn’t afford to pay those bills, but thanks to their health plan, they never have to.
• Many preventive care services are covered 100% even before you’ve reached your deductible. So you won’t be billed for things like an annual physical or well-woman check.
   

If paying for your care until you hit your deductible is a significant source of stress for you, consider the following tips:

• If your plan gives you the option to sign up for a health savings account (HSA), make sure you take advantage. You can use the funds in your HSA to cover the costs of care incurred before you’ve reached your deductible. Not having to use your credit card or checking account can take a lot of the sting out of receiving bills from your doctor or hospital.
• Switch to a plan with a lower deductible if one is available to you. The tradeoff is that you’ll pay a higher monthly premium, but that may be worth it to you to have the additional certainty of knowing what your costs will be.

Coinsurance is one of the cost-sharing tools health plans often use. Unlike a copay, which is a set dollar amount you pay at your doctor’s office, coinsurance is a percentage of the cost of care that you owe when you receive certain services.

Depending on the type of care you receive and how much your provider charges, the coinsurance amount can potentially be fairly high. For example, if your doctor orders an expensive series of lab tests and your coinsurance amount is 20%, you could receive a bill for several hundred dollars.

To help avoid these types of unpleasant billing surprises, follow these tips:

• Before you receive care, find out if a service or procedure is covered by your plan and whether you’re responsible for paying a copay or coinsurance. UnitedHealthcare members can find this information in the Benefits and Costs section of the member portal or mobile app along with a cost-estimator tool. Members can enter the type of care or service they’re planning to get, and the tool will show them an estimate of what they’ll pay based on their actual plan benefits. Check if your insurer offers similar resources. You can also call your health plan, and a member services representative can answer your questions.
• It’s common for providers in a given area to charge drastically different rates for the same service. This, in turn, means your coinsurance amount can vary dramatically as well based on the provider and setting you choose. So if you get a case of sticker shock from seeing your estimated payment for upcoming care, consider shopping around to see if you can save money by choosing a different doctor or hospital.
   

Getting a bill you weren’t expecting can be frustrating and stressful, but you don’t have to figure it out on your own. The member services representatives at your health plan can answer your questions, help you understand your options, and in some cases, work to resolve the payment dispute.

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