How Does Health Insurance Work?


Determine Eligibility

There are basically two types of insurance. Government insurance comes in the form of Medicare, Medicaid and Tricare insurance. Medicaid is administered by the state and based on annual income. Medicare is administered by the federal government and is reserved for those 65 and over. The age is 65 years of age. Tricare is administered by the federal government and was created for active members of the military and their families. Private insurance is all insurance not administered by the government. Eligibility requirements vary but are usually offered through an employer.

Find Participating Providers

Every insurance program has a network of providers that choose to provide services via the network. Providers include doctors of all specialties as well as institutions such hospitals, nursing homes, home health agencies and a host of institutions licensed to provide medical care. Beneficiary is the name given to people by the insurance company who are enrolled to receive care in their particular organization. Insurance companies give beneficiaries a list of providers who will provider services to them.

Ask About Payment Requirements

Some insurance companies require upfront pay from the beneficiary for certain types of care. This payment is called a co-pay and may go towards a larger deductible required by the insurance company. This may apply to government and private insurance. Beneficiaries should inquire about services such as doctor visits and hospital stays.

Make an Appointment

Find a provider within the specified network and schedule an appointment. The receptionist will ask for basic information to schedule the visit. He or she will also ask for unique ID numbers given by the insurance company.

Verify of Coverage From Insurance Companies

After arriving for an appointment, a receptionist may ask for a copy of insurance card. Once the card is copied on the front and back, the receptionist will call the insurance company to ensure that the beneficiary is still eligible and verify for which services they are eligible.

Receive Care From Provider

Once the services are verified, the beneficiary will go in to receive care from the provider. The provider will assess the patient and suggest follow up appointments with specialists if necessary. In some cases, an insurance company may require that the primary care physician provide an official referral.

Submission of Claim by Provider to Insurance

The office manager or billing rep will submit a claim to the insurance company. The claim contains basic demographic and ICD-9 information, which is coding that describes the beneficiary’s condition as well as procedures that were performed. This claim may be on a standard claim form or one specified by the insurance company. It is sent electronically or mailed to the insurance company.

Follow up on Claim

Claims usually pay within 30 to 60 days. The office manager will follow up with the insurance company if payment does not occur in a timely manner. The insurance company may send explanation of non payment prior to follow up.

EOB is Sent to Beneficiary and Provider

An Explanation of Benefits is sent to the beneficiary and the provider outlining what was paid to who and any remaining amount that is due to the provider by the beneficiary.

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