Many of us assume that if you have health insurance, your health care costs are either covered or at least partially paid. Unfortunately, this is not always the case -- this is where health insurance exclusions come into play. A health insurance exclusion refers to anything the insurance company will not cover, ranging from a type of drug to a type of surgery. These exclusions can vary from plan to plan, and it's essential that you get to know your plan's exclusions.
Common Health Care Exclusions
The subject of pre-existing conditions is always a hot one. A pre-existing condition is a condition for which you have received medical care before the first day of coverage on a new plan. Legislative changes in the past decade have made it easier for those with pre-existing conditions to receive health care. However, many plans still have waiting periods for people with pre-existing conditions.
One of the main types of exclusions comes up with hospital stays. Use of the hospital room phone or TV, extra pillows and sometimes even Band-Aids are commonly excluded from insurance coverage. Hospital fees can be high, so it's important to be familiar with your plan's exclusions.
Home care and private nursing expenses are some of the most common excluded expenses. According to the Centers for Disease Control, more than 1.4 million patients using home health care, with the average patient needing at least 60 days of treatment [source: CDC]. Without any coverage, these health care expenses can add up fast.
One surprise may be the exclusion of coverage for patients with behavioral or learning problems, like dyslexia and ADHD. These are commonly excluded because these conditions usually require care that can last for several years. However, recent awareness of these conditions, especially ADHD, has caused many plans to only partially exclude them and cover many of the drugs needed to manage these conditions.
Not surprisingly, cosmetic surgeries are often not covered. These surgeries include elective nose jobs, face lifts, tummy tucks and the like. However, some cosmetic surgeries -- those done in response to a medical problem -- are usually covered. These surgeries usually include breast reconstruction after a mastectomy, a nose job to fix a deviated septum and skin grafts for burn patients. Recently, insurance companies have started to consider circumcisions elective because their health benefits are under question. Sex-change surgery isn't often covered because most plans don't consider it medically necessary. Abortion is also generally excluded because the political impact of including the procedure could outweigh the health consequences of excluding it.
Alternative and complementary medicine is often not covered by health insurance. Alternative medicine is used in place of conventional medicine, and complementary medicine is defined as treatments and procedures that are used together with conventional medicine. These types of medicine include acupuncture, acupressure, yoga, massage and biofeedback.
Finally, most health insurance plans do not include dental or vision care. These services are included in separate policies. However, many plans will cover dental or vision care that is required because of an accidental injury. Therefore, be sure to check with your insurance company before paying out of pocket for that chipped tooth.
Your plan may exclude more than this basic list, so check and double-check your list. You might find that some drug benefits are excluded. In the next section, we'll discuss the most common drug exclusions.
Drug Benefit Exclusions
All health insurance plan have a drug formulary, or list of covered medications. Obviously, drugs not on that list are excluded, but the exclusions may include services and miscellaneous fees related to drug benefits.
Many excluded drug benefits are in the cosmetic or nontraditional category. Drugs used for purely cosmetic purposes (like hair-growth stimulants and supplements for clear skin or strong nails) are usually not covered. Ditto for nontraditional drugs, like food supplements and experimental medications, and drugs that are used to abort a pregnancy.
There are also some nonmedication exclusions in this category. For example, many workers stand in one position for hours, which can cause damage to the back and legs and result in more serious complications like deep-vein thrombosis. But insurance usually doesn't cover supportive garments and back braces.
Most of these exclusions happen in both fee-for-service and managed-care plans, but there are differences.
Exclusions by Plan
Fee-for-service plans, or indemnity insurance, reimburse a set percentage of your health expenses and give you the freedom to select providers and hospitals. With this freedom often comes a higher monthly premium. Also, this type of insurance focuses more on the sick patient than on preventative care. Because of this, preventative care, such as annual physicals and "well" baby checkups, is often excluded.
HMOs and PPOs are the most popular types of managed-care plans. These plans are restrictive in terms of freedom of choice, but they're also usually much cheaper than other insurance plans.
Managed-care plans have more of a focus on preventative care, so physicals and the like are not excluded. Cosmetic surgery, experimental drugs and alternative medicine, however, are usually excluded.
Check out the links on the next page to learn more about health insurance exclusions.
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More Great Links
- Solve Your Problems.com: Health Insurance Exclusions. http://www.solveyourproblem.com/insurance/health_insurance_exclusions_not_covered.shtml
- NAIC: State's Insurance Department Web Sites. http://www.naic.org/state_web_map.htm
- MMC: Insurance Basics, Exclusions in Coverage. http://mmc.healthinsurance.com/hi/web/basics/individual/Exclusions.aspx
- Quotit.net: What's Not Covered? http://www.quotit.net/resources/terms_health2.htm#covered
- FreeAdvice.com: Exclusions and Limitations. http://insurance.freeadvice.com/insurance_help.php/108_119_127.htm
- U.S. Department of Labor: Pre-Existing Condition Exclusion. http://www.dol.gov/elaws/ebsa/health/glossary.htm?wd=Preexisting_Condition_Exclusion
- CDC: FASTATS, Home Health Care. http://www.cdc.gov/nchs/fastats/homehealthcare.htm