Paying Medical Bills Before You Meet Your Deductible: A Simple Tip to Help You Avoid Overpaying

Have you ever been asked to pay hundreds of dollars at a doctor's office simply because you haven't met your health insurance deductible?

Many patients assume the amount requested at check-in is exactly what they owe. In reality, that amount is often only an estimate and may not reflect what your insurance company will ultimately allow after processing your claim.

In this episode of Take Care, Melody Mulaik shares a real-life story from her husband's recent dermatologist visit to explain how deductibles really work, why provider charges and insurance allowed amounts are different, and how you can avoid paying more than necessary before your insurance has finalized your claim.

Whether you're covered by employer-sponsored insurance, an ACA Marketplace plan, or another commercial health insurance plan, this practical episode will help you become a more informed healthcare consumer and avoid unnecessary out-of-pocket costs.

What You'll Learn In This Episode:

• What a health insurance deductible actually means
• Why the amount a medical office requests isn't always your final responsibility
• The difference between billed charges and insurance allowed amounts
• How insurance companies calculate what counts toward your deductible
• A simple strategy to reduce the risk of overpaying before your claim is processed
• What to do if you've already overpaid a healthcare provider
• Why reviewing your Explanation of Benefits (EOB) is one of the most important steps before paying your balance

Timestamps:

00:36 Don't Assume the Office's Estimate Is Final

01:03 Understanding Health Insurance Deductibles

01:42 Billed Charges vs. Insurance Allowed Amounts

02:34 What Actually Applies to Your Deductible?

03:00 How to Avoid Overpaying Your Medical Bill

03:48 Why Paying Half First Can Save You Money

04:07 Getting a Refund If You Overpaid

04:35 What Every Patient Should Remember 

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Transcript

Melody 0:11

Hello everybody, and welcome to this episode of Take Care. For this episode, I'm going to lean into a personal story that my husband recently experienced. So he went to the dermatologist last week to get some things taken care of. And as he was leaving, he knew he had met his deductible, and so did the office staff there at the dermatology offices. And they basically said, "You know, you haven't met your deductible, so here's the amount of money that you owe." And so they told him he owed $400, and he paid the $400. Okay? On the surface, you might say, "Well, that's what they said I owed. Was it appropriate?" Well, immediately, as he's telling me this story, I started asking a lot of questions. And I said, "Well, well, what did they charge you? What was actually the charges for the visit?" And he said, "Well, what do you mean? They told me I owed $400." Well, there's a difference, right? So when you have commercial insurance, so you have again, doesn't matter, any of the insurance company, big insurance, non-Medicare that you have, you have a deductible. Yes. Whether that's five hundred, a thousand, two thousand, again, you might have a high deductible plan. Doesn't matter, but you have an amount of money you have to pay. But what's important to keep in mind is that that deductible is based on the amount that is negotiated between the insurance company and that particular provider. And what I mean by that is, let's say that $400 example from him. If their charges were $400 for his services, that is not what that insurance company is going to pay. They have a negotiated rate, what they call an allowable. And if they charge $400, it's very possible that his insurance company may have said, "Okay, I see that, but based on what you're charging me for a visit or a mole remove," whatever the service, they might say, "We only allow $240." Well, the allowable is the amount that gets applied to the deductible. It's not the total charge. So that's a really important distinction, and something for anyone as you're looking at making sure you're paying the correct amount towards your deductible. That you understand what would your insurance company have paid if it was their responsibility to pay versus your responsibility to pay. And the only way that you know that, I mean, granted, the physician office or hospital could reach out to your insurance company and say, "I'm about to bill you this." The insurance company says, they haven't met the deductible, but they're communicating back to your doctor's office what would they have paid so that they can share that with you. So you might say, "Well, how would I know all this?" Well, there's a couple things you can do. One is anytime I've been in a situation where I'm going to get my services, you know, usually more towards the beginning of the year. And they say, "You haven't met your deductible yet, and the amount you owe us is X," let's say it's seven hundred dollars. Again, I'm just making up a number. What I will typically do is say, "I will pay half of that today, and then once you have filed with the insurance company and we know the exact amount that I owe, I will pay the remainder." And typically, this is not ever an issue. So you're paying something. I'm not saying that you should push back and say, "I'm not going to pay anything until you hear from the insurance company." But it is a reasonable response to offer to pay half of that amount. Because you may have other visits or other testing going on that are also going to be submitting information to your insurance company or claims to your insurance company. And each individual physician group doesn't know that, and they understand that they're in line, so to speak, to get particular payments. So it is reasonable for you not to pay that full amount that you're being asked to pay, even though you haven't met your deductible. Because again, you want to make sure you're not in a situation where you're overpaying and then you're having to get your money back. Now, if you do overpay, they absolutely owe you your money back, and they owe you your money back in a timely fashion. But sometimes that can be a little bit of a challenge to get. Some physician practices are excellent at reviewing things on a monthly basis. They get any credits that are owed back to a patient back to them very quickly, but other ones are not as quick. If you're like me or anybody else, you don't want somebody else holding on to your money. So what is the moral of the story in this situation is if you haven't met your deductible and an office, physician, hospital, whomever, is asking you for money. It's appropriate to pay a portion towards what they're asking and then wait to see what your insurance company would have allowed so that you make sure you're not in a position of overpaying. I hope that tip is helpful for you as you navigate through making sure you're paying for the things appropriately, whether you've met your deductible or not. Until next time, take care.