08 Mar The Language of Health Insurance
Most of the clients that we serve are paying for their ABA services via their private health insurance. State mandates have made coverage for ABA more accessible for many. According to the National Conference of State Legislatures, 46 states and the District of Columbia have autism insurance mandates of some sort, meaning that there is a state law that requires some insurers to provide some level of coverage for the treatment of autism spectrum disorder. When families begin pursuing that treatment, they often find themselves needing to learn a second language: the language of health insurance. The terms and paperwork can be intimidating. The team at PLS is here to help our clients understand the basic insurance processes and vocabulary involved with ABA.
With that goal in mind, we have put together this list of simple explanations for the terms that you will likely hear as you navigate the process of getting ABA coverage, with an emphasis on how they are used with regard to ABA specifically. Please note that this is just general advice, and you should always refer to your insurance policy documents as the final authority.
Premium: the amount that you pay, usually each month, for your health insurance plan. You pay this amount whether you use your health insurance that month or not.
Deductible: the total amount that you will pay for some services before your health insurance pays. For example, if your deductible is $1000.00, you may have to pay for the first $1000.00 of ABA therapy before your health insurance will begin paying for the service.
Copay: the amount that you will pay for some services, until you reach your deductible or out of pocket maximum. This is typically a set amount per service. With ABA, you may be charged a $20.00 copay per session.
Coinsurance: after you meet your deductible, this is the amount that you will pay until you reach your out of pocket maximum.
Out of pocket maximum (OOP max): the maximum amount that you will pay in a year as part of the cost sharing plan (copays, deductibles, and coinsurance). Your premiums are not included in the OOP max.
The terms “copay”, “deductible”, “coinsurance” and “out of pocket maximum” all refer to different parts of the cost sharing structure of your health insurance plan, and they are frequently the cause of confusion and stress for parents. Every plan is different, and you should always refer to your plan for final answers, but here is a basic breakdown.
Let’s say your plan has the following cost sharing structure:
$20.00 copay per session
$1500.00 out of pocket maximum
You would pay for the first $1000.00 of services (your deductible). After that, you would pay $20.00 per session (your copayment) and your health insurance would pay for the rest of the session. After you have paid copayments totaling $500.00, you will have reached your out of pocket maximum ($500.00 in copayments plus the $1000.00 deductible that you have already paid) and your health insurance would then pay the remaining services completely.
Similarly, if your plan had a coinsurance instead of a copayment, you would pay the coinsurance amount for each session until the total that you have paid in coinsurance and deductibles meets your out of pocket maximum.
Self-funded plan: a health insurance plan (generally offered by large employers) in which the claims are paid by the employer directly. These plans are not subject to state mandates, and so may choose what services they cover regardless of mandates.
If you are covered by a self-funded plan, you may not have autism benefits, even if there is an autism mandate in your state. But that does not mean that’s the end of the road! Many parents have successfully advocated for their self-funded plan to add ABA and autism coverage. For more information on self-funded plans, and steps to take if you need to advocate for coverage, see the Autism Speaks Self-Funded Toolkit.
Explanation of Benefits (EOB): a summary of charges that were submitted to your health insurance. Typically the summary lists each service and your financial responsibility by date. An EOB is not a bill. You will receive a separate bill from the provider for the amount stated on the EOB. Look at your EOB closely, it lists your responsibilities as part of the cost sharing structure described above.
In network: a provider who has entered into an agreement with your health insurance company to provide certain services at a contracted rate. Your insurance company will prefer that you see an in network provider.
Out of network: a provider who has not entered into an agreement with your health insurance company Many health insurance plans will not cover services provided by an out of network provider; or, will only cover a portion of the costs and you will be liable for the rest.
Single case agreement (SCA): an agreement that an out of network provider can sometimes make with an insurer, in which the patient is treated as if the provider is in network (usually meaning lower copays, and less out of pocket expenses). If your provider works out an SCA, you will get your services with the in network copayments and deductibles.
Letter of medical necessity: a short document stating that ABA is a medically necessary treatment for autism. It is essentially the doctor’s “prescription” for ABA therapy. Many health plans will require this letter as a condition of paying for ABA. PLS collects this letter from every client during intake, and will request updated letters as needed.
Authorization: prior to beginning ABA services, your provider will work with the insurer to get authorization, essentially permission, to provide and bill for the services. The process of getting authorization can be time consuming, depending on your insurer.
One of the benefits of working with a small, local company like PLS is that we are always here to help you navigate the world of health insurance. When questions arise (as they always do!) you have our direct phone number and can speak to someone you know and trust, who will help you to understand your financial responsibilities and any options that are available to you.