10 Tips on Avoiding Major Health Insurance Traps

FALLING VICTIM TO “BALANCE BILLING”

Imagine a scenario where you have superb health insurance but then receive an enormous bill, maybe costing thousands of dollars, such as after a hospital stay. Balance billing could be the culprit. This is when a provider bills the insurer the difference between the provider’s charge and what insurance pays.

“Even though PPO plans cover out-of-network providers, the insurance companies do not have contracts with these out-of-network providers,” said John Seltzer, CEO of J. Seltzer Associates, an employee benefits consultancy. “As a result, these providers are not required to accept the insurance companies’ allowances as payment in full.”

Unfortunately, the burden then falls onto the insurer. This can be quite costly as it’s not subject to the limitations of the deductible, coinsurance or out-of-pocket limit.