What Health Insurance Covers
"No worries, I've got health coverage," whispers the burglar under his breath, while balanced on a third-story ledge. Except he doesn't. That would fall (pun intended) under "illegal conduct," one of the many and varied general exclusions that health insurers have in place to keep ambitious policyholders from gaming the system.
Most people have only a nebulous idea of what their policies cover, which isn't exactly a healthy way to go through life. If you're going to commit something to memory, better your coverage details than the lyrics to a song or the dialog from a movie.
Next time you're feeling bored, open the benefits booklet you received the last time you bought health insurance. What's that you say? You threw it out? Or it's buried under a pile of papers? Ask for another copy. Considering that your life might hang in the balance, it's probably worth it. You'll find that the list of exclusions extends well beyond the infamous pre-existing conditions.
SEE: Understanding Your Insurance Contract.
What Is and Isn't Covered?
A standard policy covers doctor visits on a regular schedule, and likely incorporates a nominal fee – say, $30 a visit, three times annually. Add pharmaceutical discounts, and that's all most people use their policies for. You pay less than you otherwise would for the checkups and the drugs, but factoring in the premiums, you probably end the year a few hundred dollars behind.
Most people gladly accept that trade-off, reasoning that if they were to suffer something traumatic and expensive, they'd be covered up to their policy's maximum. You'd like to think that a catastrophic injury or illness – a broken leg suffered under honest circumstances, or perhaps H1N1 – will be covered, but will it?
The insurers' lists of general exclusions are the result of thousands of man-hours, if not man-years, of in-house attorneys cutting off every possible legal challenge before it happens. They range from the esoteric to the surprising. Health club memberships, for instance. At least one stingy policyholder must have attempted to file a claim for his gym dues, because it's in there – succeeding hearing (aids) and preceding hypnosis ("Does not cover services related to hypnosis, whether for medical or anesthesia purposes"). (For additional reading, see Services That Health Insurers Often Decline.)
Some of the general exclusions are understandable: if you're going to be admitted to a hospital for a necessary procedure, your insurer isn't going to pick up the tab for personal laundry services or a TV in your room. (That's in there, under convenience/luxury/deluxe services or equipment. It includes items such as wheelchair sidecars and fashion eyeglass frames.) Artificial conception? Sorry, you're on your own. Which stands to reason, as childlessness is more of a familial status than a medical condition. Convalescent care? Only if your insurer's medical policy decrees that it's "normally" received for a specific condition.
Cosmetic services is a big one that can easily fall into the category of "Wait, are you sure that isn't covered?" Under most circumstances, you'll have to pay for your own face-lift, botox injections, breast augmentation and rhinoplasty. (God help you if you think you want all four. Besides, a big nose adds character.)
Anything ordered by a court is the patient's problem, or possibly the court's. Certainly not the insurer's. That includes genetic testing, among others. Routine eye examinations aren't typically covered, nor anything related to obesity: no laparoscopic gastric bypass surgery, no commercial weight loss programs. Any complications from bariatric surgery that result in an extended stay aren't covered, either.
You'll also pay out-of-pocket for experimental/investigative procedures. Your insurer would rather not incur risks that it doesn't know the potential downside of, thank you very much. Kobe Bryant's platelet-rich plasma therapy (which appears to be working wonders, at least in the short run) isn't approved for use in the United States, let alone covered by insurance.
It's astonishing how many people will go for a regular dental checkup, find out they're due for a deep cleaning and two sets of x-rays, assume that "everything's covered," and get an unpleasant surprise at the checkout desk, adding insult to infirmity. Again, leaving things to chance is a great way to punch holes in your net worth.
The Bottom Line
Understand that the couple hundred dollars a month you pay for coverage isn't all-encompassing. "Coverage" is a vague concept that needs to be qualified and quantified. Just like most things in life.
A prudent man would agree that obtaining any kind of health insurance is a far better idea than crossing your fingers and hoping that you never get sick nor injured. However, general exclusions exist, and they are, by necessity, more plentiful than the inclusions. See above, the part about reading your benefits book. Doing so might not literally save your life, but it'll certainly help your finances. (Also, check out Top 10 Life Insurance Myths.)