Insurance is complicated. Surprise bills are all too common. Let’s look at six things to help you avoid surprise bills.
1. Enroll a Newborn Within 30 Days
Most plans will cover a newborn under the mom’s plan for the first 30 days. But coverage for the baby ends after 30 days. To continue your baby’s coverage, you must enroll him or her as a dependent on your insurance plan. If you don’t, you’ll have to pay 100% of all the baby’s medical costs until the next open enrollment period. That coverage probably won’t be effective until the following January.
Read your plan document or summary of benefits to learn your plan’s specific enrollment requirements, including when the newborn must be enrolled. To avoid surprise bills, make sure those requirements are part of your new parent checklist.
2. Follow the Birthday Rule
The birthday rule is an important, but often overlooked rule that can impact whether or not your child’s medical claims are paid.
If a child has medical coverage under both parents’ medical plans, the birthday rule determines which plan is primary. In other words, the plan that pays first. Under the birthday rule, the parent whose birthday occurs first in the year has the primary plan. For example, if the mom’s birthday is in April and the dad’s is in July, the mom’s plan is primary.
When a plan is primary that means all claims must be submitted first through that plan. Only after the primary plan has processed the claim should the bill be submitted to the second plan. If you submit claims first to the non-primary (second) plan, the insurer could deny payment. Or if they pay the claim, they may later reverse payment causing you to have to pay the bill that they once paid.
3. Know that COVID-19 Cost-Sharing Waivers are Ending
Early on in the pandemic insurance companies were waiving co-payments for COVID treatment. A study in August found that nearly 75% of the largest insurers were no longer waiving cost-sharing for COVID treatment. Read my post for more details about this trend and just how costly it can be for you.
4. Understand Cost Differences between Telehealth and In-Person Office Visits
There are two things to know about coverage for telehealth visits. First, the pandemic caused many insurers to begin covering telehealth visits. Some, but not all, insurers are now dropping that coverage. Find out from your insurer if they still cover telehealth visits.
Second, if you do have telehealth coverage, ask what your co-payment or co-insurance amount is. Under some plans you don’t pay anything for a telehealth visits. To avoid surprise bills, make sure you know how much you’ll be expected to pay before your telehealth appointment.
5. Beware of Catastrophic Plans
Health insurance is expensive. We’re all looking for the best priced plans. But be careful when considering catastrophic plans. These plans may entice you with low premiums. However, they have very high deductibles and limited coverage once the deductible is paid.
In addition, you can’t use your premium subsidies to reduce the cost of catastrophic plans. Read by post on the American Rescue Plan to understand just how much the premium subsidies might save you on traditional plans with better coverage.
If you’re considering a catastrophic plan because you’re young and healthy, make sure you have the money to pay the deductible and high co-pays. Because if you have an emergency and need medical care, the insurance company won’t pay any of your bills until your deductible has been met. The amount they’ll pay after that is much less than traditional insurance plans.
6. Timely Enrollment for Medicare Part B
Medicare Part B covers eligible non-hospitalization costs. You have to pay a monthly premium for the coverage. Unless you have other creditable coverage (more on that in a moment), if you don’t sign up for Medicare Part B when you’re first eligible, you will likely have to pay a penalty. Specifically, you will pay an additional 10% each month for every 12 month period you missed.
For example, if you were eligible to enroll in May 2018, but didn’t enroll until July 2020, you will have to pay a 20% penalty each month. That penalty continues for as long as you have Medicare Part B coverage.
What is creditable coverage? It is coverage that is at least as good as Medicare coverage.
You can use this fact sheet from the Centers for Medicare & Medicaid Services (CMS) to help you determine when you should enroll in Medicare.
Following any of the six tips that apply to you will help you avoid surprise bills. And that’s always a good thing to do!