Medical Coding and Billing: Levels of Insurance Coverage

As a medical coding professional, it is important to understand various insurance coverage levels. The more the individual contributes to the cost of medical insurance, the better the coverage. Say, for example, that an employer offers different tiers of coverage:

  • Tier 1: The employer offers first-tier coverage to the employee at no cost, but each doctor visit carries a $50 copay obligation, and the plan has a $2,000 major medical deductible. After the employee meets the deductible, the plan pays 70 percent of the covered expenses, and the employee is responsible for the other 30 percent.

    Employees who choose this option are gambling that they won’t need to use the benefits too often.

  • Tier 2: This plan may require the employee to contribute $100 per month toward his coverage, but the physician copay amounts are only $25, the annual deductible is $1,000, and the plan pays 80 percent of covered expenses. Employees who choose this option pay more for coverage, but that coverage is slightly more comprehensive.

  • Tier 3: For this plan, the employee contributes $200 per month toward his coverage, but the copay is now $10 for a doctor visit. The deductible is waived, and the plan pays 90 percent of covered expenses. This is really good coverage, but the employee is paying for the additional benefits through the higher monthly contribution.

  • And so on: Depending on what the employer offers, these tiers can be extended to include $0 copayment amounts and $0 deductible plans.

The decision is in the hands of the employee, and so is the gamble. Thus, by increasing up-front costs, the employee is betting that he’ll need to use his insurance. On the flip side, by taking the plan offered at no cost, the employee is betting that he won’t need to use his insurance. In all cases, the options available to the employee depend on what the employer offers.