What Health Insurance Doesn't Cover

Most health insurance plans leave a good amount of the cost of healthcare to consumers. Out-of-pocket expenses may include premiums, coinsurance, deductibles, and copays. Consumers also need to pay for services insurers may not cover or cover at a lesser amount, such as some infertility treatments, out-of-network doctors at network hospitals, nursing home care, and elective procedures.

Cost Sharing in Health Insurance

Insurance companies over the last few decades have increasingly used “cost-sharing" to encourage their customers to use healthcare services more carefully. This means consumers are responsible for a portion of the bills for their care. However, this shift has led to consumers shouldering more of the burden of healthcare costs often leading to debt and lower usage of health services.

Out-of-pocket medical expenses account for a significant share of debt and bankruptcies in the United States. As of the second quarter of 2021, 58% of bills that are in collections and on people's credit records are medical bills. 1

A recent national survey found:

• 23 million people (nearly 1 in 10 adults) carry significant medical debt. Approximately 16 million people have over $1,000 and 3 million people owe a medical debt of more than $10,000. ²
• Middle-aged adults are more likely than young adults to have significant medical debt. ²

Out-of-Pocket for Covered Services

Even for those services covered under a health insurance policy, the consumer can be on the hook for significant cash outlays. Costs associated with health insurance may include:

• Premiums – The cost of the health insurance policy. It can be paid fully by the consumer, fully by the consumer's employer, or shared between the two.
• Deductible – The amount a consumer must spend before receiving any coverage under their policy, besides preventive care. For example, if the annual deductible is $1,000, the consumer must pay $1,000 in medical bills before their insurance company will pay anything toward health care bills, unless the care is covered by preventive care.
• Coinsurance – The consumer's share of a covered service (after meeting the deductible amount). This is usually a percentage of the cost of the service, often 20 percent. For example, if the consumer has met their deductible and they get a bill for healthcare for $500, the coinsurance is $100, and they must pay that. The insurer pays the additional $400.
• Copayments – Sometimes rather than paying coinsurance, a consumer must pay a flat fee for a service. For example, if a policy requires a $20 copayment for doctor's visits, the consumer's out-of-pocket cost for the visit is $20, once they have met any applicable deductible. The insurance plan pays the remainder at a rate agreed upon with the provider.
• Out-of-Pocket Maximum – This is the maximum dollar amount of health care bills a consumer would need to pay in a calendar year. This figure includes deductibles, coinsurance, and copayments, but it does not include premiums.

For more information about out-of-pocket costs, see rising premiums, deductibles, and the impact on your budget.

Affordable Care Act (ACA) Required Services

Currently, the Affordable Care Act requires all insurers selling on the healthcare marketplace to cover certain services without limits on the amounts these services cost. The services, however, may still be subject to deductibles, coinsurance, or copayments. All health insurance policies must provide coverage for:

• Ambulatory patient services (outpatient services)
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care³

While the list seems comprehensive, there are still coverage limitations even within these mandatory categories. For instance, insurers may pay less for brand-name prescription drugs than for generics. Insurers will pay more for services at an in-network facility than at a facility not in-network. If in doubt, contact your insurer.

Non-Covered Services

Finally, there are some services most health insurance plans will not cover, even if the consumer has met the deductible and other out-of-pocket costs.

Long-term care, such as that provided in a nursing home, may not be covered by health insurance (including Medicare), unless it follows a covered hospital stay. The national average cost of such care was $6,844 per month for a semiprivate room in 2016.⁴

Experimental or alternative treatments that the FDA has not approved will not be covered.

Some additional health expenses not covered by insurers include⁵:

• Hearing aids
• Infertility treatments, including in vitro fertilization
• LASIK surgery to correct vision
• Acupuncture and other alternative therapies
• Weight loss programs
• Private nursing
• Vaccines for travel
• Cosmetic surgery
• Doctors who are out of network, even if they perform services at an in-network facility.

What Health Insurance Doesn't Cover: The Consequences

A recent study found that two-thirds of people who file for bankruptcy cite medical issues as a key contributor to their financial problems.⁶ To avoid a medical-related bankruptcy, make a point to budget for your healthcare costs as much as possible and ensure you know what your health insurance covers – and what it does not cover.

Managing Healthcare Costs with CareCredit

If you are looking for an option to help manage your medical bills, consider healthcare financing with the CareCredit credit card. The CareCredit card can help you pay for the care you want and need and make payments easy to manage.* Apply today and use our Acceptance Locator to find a provider near you that accepts CareCredit. Continue your wellness journey by downloading the CareCredit Mobile App to manage your account, find a provider on the go, and easily access the Well U hub for more great articles, podcasts, and videos.

Author Bio

Kristin Driver is a Digital Writer with CareCredit. She specializes in writing about health care, finances, and pet care. Her work has been published by Cedars-Sinai, UCLA Health, Stanford Health Care, Risk & Insurance, Modern Health Care, Risk Insider, CIO Review, and more.

Our Expert Reviewer

Patty Caballero and her team of consultants together have more than 35 years of health insurance knowledge working for some of the biggest health insurance companies in the US. She has knowledge in building brands and strategic initiatives to help consumers better understand their health benefits.