Jun 2001 Table of Contents

Please note: This information was current at the time of publication. But medical information is always changing, and some information given here may be out of date. For regularly updated information on a variety of health topics, please visit familydoctor.org, the AAFP patient education Web site.

Information From Your Family Doctor

Understanding Your Insurance Coverage

Fam Pract Manag. 2001 Jun;8(6):43.

Your health insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, drugs and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. These are called “covered services.”

Your policy also lists the kinds of services that are not covered by your insurance company. You have to pay for any uncovered medical care that you receive. Keep in mind that a medical necessity is not the same as a medical benefit. A medical necessity is something that your doctor has decided is necessary. A medical benefit is something that your insurance plan has agreed to cover. In some cases, your doctor might decide that you need medical care that is not covered by your insurance policy.

Insurance companies determine what tests, drugs and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. Your insurance company’s choices may mean that the test, drug or service you need isn’t covered by your policy.

Your doctor will try to be familiar with your insurance coverage so he or she can provide you with covered care. However, there are so many different insurance plans that it’s not possible for your doctor to know the specific details of each plan. By understanding your insurance coverage, you can help your doctor recommend medical care that is covered in your plan.

  • Take the time to read your insurance policy. It’s better to know what your insurance company will pay for before you receive a service, get tested or fill a prescription. Some kinds of care may have to be approved by your insurance company before your doctor can provide them.

  • If you still have questions about your coverage, call your insurance company and ask a representative to explain it.

  • Remember that your insurance company, not your doctor, makes decisions about what will be paid for and what will not.

Most of the things your doctor recommends will be covered by your plan, but some may not. When you have a test or treatment that isn’t covered, or you get a prescription filled for a drug that isn’t covered, your insurance company won’t pay the bill. This is often called “denying the claim.” You can still obtain the treatment your doctor recommended, but you will have to pay for it yourself.

If your insurance company denies your claim, you have the right to appeal (challenge) the decision. Before you decide to appeal, know your insurance company’s appeal process. This should be discussed in your plan handbook. Also, ask your doctor for his or her opinion. If your doctor thinks it’s right to make an appeal, he or she may be able to help you through the process.


This handout is provided to you by your family doctor and the American Academy of Family Physicians. Other health-related information is available from the AAFP online at http://familydoctor.org.

This information provides a general overview and may not apply to everyone. Talk to your family doctor to find out if this information applies to you and to get more information on this subject.

Copyright © 2001 by the American Academy of Family Physicians.
This content is owned by the AAFP. A person viewing it online may make one printout of the material and may use that printout only for his or her personal, non-commercial reference. This material may not otherwise be downloaded, copied, printed, stored, transmitted or reproduced in any medium, whether now known or later invented, except as authorized in writing by the AAFP. Contact fpmserv@aafp.org for copyright questions and/or permission requests.

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