How does a health insurance company determine what claims they will and will not cover?
UPDATED: Mar 8, 2011
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Asked March 8, 2011
Every insurance company uses a set of guidelines to determine how procedures and conditions will be classified. Even if you are told that you do not need prior authorization for a procedure, it may turn out that the insurance does not cover that procedure after the fact, or will only pay for a portion of the bill. The reason for this is that the exact details of the procedure may change during the treatment, expanding beyond the treatments initially thought to be covered, or the costs associated with treatment become higher than the limits set by the insurance company.
Each health insurance plan is different, and the plans are based around a set of risks and health patterns that show up in any group of people. Group plans do not exclude a person because of a particular health risk when it insures the other members of the group, and the group cannot be excluded on the basis of a single person's health requirements. Group plans tend to have higher premiums and relay a portion of the costs back to the insured person, but they have a wider acceptance range than private insurance.
Private health insurance is sometimes very strict about who they will insure. While a physical and drug testing are not required for most group policies, private insurance will usually want these tests as a method of determining whether to accept you for the policy. Another example is that private health insurance companies may exclude a person based on health risks such as being a smoker.
The only way to find out what is and is not covered on a particular health care policy is to read the policy. Even though insurance is regulated at the state level, health insurance companies have the versatility to establish guidelines that offer the best care for the lowest costs, and that may mean that there is a great deal of difference between the policy written by similar health insurance providers.
Answered March 8, 2011 by Anonymous