IX.

Specific Benefits

Each health plan or insurance policy must define what kinds of medical services are covered by insurance. These policies must also explain limitations or exclusions of coverage for specific services. In addition, insurance policies define the kinds of medical care providers that are covered by insurance. For example, covered providers usually include physicians and hospitals, but the policy’s terms may also include coverage for nurse practitioners, midwives, chiropractors, and naturopaths.

Almost all health insurance plans cover the cost of diagnostic tests, prescription drugs, and other items necessary to provide care in hospitals. Some policies also provide coverage for such things as prescription drugs to be taken outside of hospital settings.

A.

Inpatient Hospital Care

Hospitals provide inpatient care when they admit a patient for an overnight stay. Most comprehensive health insurance policies cover the costs of inpatient care as long as that level of care is considered necessary to treat the patient’s condition.

Hospital indemnity policies pay a specified dollar amount per day of inpatient care, regardless of the cause of the hospitalization. The amount paid by the insurer varies neither with the services provided nor with the expense of those services. The benefit amounts paid by hospital indemnity policies are generally quite low when compared with the typical cost of a hospital stay.

B.

Outpatient Care

Patients who do not require an overnight hospital stay receive outpatient care, which is generally covered by comprehensive policies. Outpatient care could be provided in a doctor’s office, a neighborhood clinic, or in a hospital if the patient is sent home the same day. For example, patients often will come to the hospital the day before surgery so that doctors can perform blood tests. Simple surgeries like a tonsillectomy (a procedure to remove the tonsils) usually can be performed on an outpatient basis. Even very sophisticated surgeries like a cochlear implant (a device used to stimulate the auditory nerve in deaf people) often do not require a hospital stay. To encourage patients to make cost-effective use of the healthcare system, health insurance plans—particularly managed care plans—often include financial incentives to use outpatient services whenever possible.

Treatment of mental illness is commonly performed on an outpatient basis, but insurance coverage is often limited for such services as psychotherapy. For example, private insurers generally pay 80 percent of the cost of most outpatient medical services, but they traditionally limit reimbursement for psychotherapy to 50 percent or less of its cost. Also, many insurers limit their coverage of psychotherapy to a specified maximum dollar amount or to a maximum number of visits.

Many insurance policies will offer coverage of healthcare performed in the patient’s home by an approved medical provider. Home healthcare benefits are generally limited to medically necessary services that are part of a treatment plan prescribed by the patient’s doctor. Some policies also cover hospice care that allows a terminally ill patient to receive healthcare services at home or in an approved hospice center instead of in a hospital.

C.

Emergency Care

Most insurance policies cover emergency care provided in hospital emergency departments, but they generally discourage overuse of emergency room visits by requiring the patient to make a copayment. Health insurance policies also usually offer limited coverage for ambulance transportation to emergency rooms.

D.

Substance Abuse and Alcoholism Treatment

Most comprehensive policies offer limited coverage for treatment of alcoholism and other forms of substance abuse. These policies generally pay a percentage of the cost for treatment performed by an approved facility or counselor, but benefits are usually limited to a maximum amount paid over a specified period.

E.

Alternative Medicine

An increasing number of health insurance policies provide benefits for so-called alternative medicine—that is, for therapeutic practices and treatments that lie outside the mainstream of Western medical care. Policies that cover alternative medicine may provide benefits for such treatments as acupuncture, chiropractic care, therapeutic massage, and naturopathy (treatments that avoid drugs and surgery in favor of natural remedies). Advocates of alternative medical practices believe that they can provide safe, natural approaches to treating illnesses or injuries that conventional medicine has had limited success in curing, such as chronic pain and drug addiction.