Understanding Your Health Insurance and Cost Sharing
Your health insurance company will not pay all your covered healthcare expenses. You’re
responsible for paying part of your healthcare bills even when you have health insurance.
This is known as cost sharing because you share the cost of your health care with your
health insurance company.
To clarify one point of potential confusion, “covered” does not necessarily mean that the
health plan will pay for the service in its entirety. It means that the service is
considered medically necessary and is something that your health plan will pay for if
you have met your cost sharing obligations, which include deductibles, copayments, and coinsurance.
The three basic types of cost-sharing are deductibles, copayments, and coinsurance. Some
health plans use all three techniques, while others may only use one or two. If you don’t
understand your health plan’s cost sharing requirements, you can’t know how much you’ll have
to pay for any provided healthcare services.
Deductible is what you are required to pay each year before your health
insurance coverage begins to fully pay its share. For example, if you have a $1,000 deductible,
you must pay the first $1,000 of your healthcare bills (for services that count toward the
deductible, as opposed to being covered by a copay) before your health insurance starts paying.
Once you’ve paid $1,000 toward your healthcare expenses, you’ve “met the deductible” that year
and you won’t have to pay any more deductible until next year (note that if you have Original
Medicare, your Part A deductible is per benefit period rather than per year).
Copayments are a fixed amount—usually much smaller than your deductible—that
you pay each time you get a particular type of healthcare service. For example, you might have
a $40 copayment to see a healthcare provider. This means each time you see the healthcare provider,
you pay $40 whether the healthcare provider’s bill is $60 or $600. Your insurance company pays
Coinsurance is a percentage of the bill you pay each time you get a particular
type of healthcare service (it's not the same thing as a copayment; a copayment is a fixed amount,
coinsurance is a percentage of the cost). Coinsurance applies after you've met your deductible but
before you've met your out-of-pocket maximum.
Out-Of-Pocket Maximum is the point at which you can stop taking money out of
your own pocket to pay for deductibles, copayments, and coinsurance. Once you’ve paid enough
toward deductibles, copays, and coinsurance to equal your health plan’s out-of-pocket maximum,
your health insurer will begin to pay 100% of your covered healthcare expenses for the rest of
the year. Like the deductible, the money you have paid toward the out-of-pocket maximum resets
at the beginning of each year or when you switch to a new health plan.
No Surprises Act
What is the No Surprises Act?
The No Surprises Act is a federal law that took effect January 1, 2022 to protect people
covered under group and individual health plans from receiving surprise medical bills when
they receive most emergency services, non-emergency services from out-of-network providers
at in-network facilities
Surprise balance billing happens when an out-of-network medical provider sends a patient a
bill for their services, beyond whatever amount (if any) the patient’s health insurance
paid. Surprise balance billing refers to two types of situations in which the patient has
little to no control over whether they’re treated by an out-of-network provider:
Emergencies. The general rule is to go to the closest emergency room. This
may or may not be in-network, and it may or may not have out-of-network providers caring for
patients. But the patient is not in a position to determine whether the care they’re receiving
is in-network. Under the No Surprises Act, the consumer protections also extend to hospitalization
immediately following emergency room care, until the patient can safely be transferred to an
Non-emergency situations in which the patient goes to an in-network hospital
but is unknowingly treated by an out-of-network provider. For example, you might
choose an in-network hospital for your planned surgery, but not realize that the radiologist
or anesthesiologist or assistant surgeon isn’t in your insurance network. In some cases,
you might never interact with this provider at all.
In those scenarios, it was quite common for patients to receive an unexpected (surprise)
balance bill for the care that they unknowingly received from a medical provider who wasn’t
in their insurance plan’s network.
Can patients still receive balance bills under the No Surprises Act?
Yes, depending on the circumstances. The No Surprises Act doesn’t apply to situations in
which a patient chooses to use an out-of-network provider (as opposed to situations in which
the patient had no choice or was unknowingly treated by an out-of-network provider at an
in-network facility). So, if a person goes to an out-of-network facility or doctor in a
non-emergency situation, balance billing can still be expected, and a health plan’s normal
rules for out-of-network coverage would be used.
And in limited non-emergency situations, out-of-network medical providers can ask patients
to waive their rights under the No Surprises Act. In that case, if the patient signs a form
indicating that they agree to the out-of-network charges, they can still receive a balance
bill. And the out-of-network medical provider can refuse to provide treatment if patients
don’t waive their balance billing protections.
For more information about your rights under federal law, visit the Maine Bureau of Insurance
website at https://legislature.maine.gov/statutes/22/title22ch401sec0.html.