The U.S. healthcare system is a mix of private insurance, employer plans, Medicare, Medicaid, and safety-net programs. Even for people who have used it for years, the vocabulary and the rules can be confusing. This guide covers the terms and steps that come up most often.
Know your coverage
Before any non-emergency care, confirm:
- Whether the provider or hospital is in-network for your plan
- Your deductible, copay, and coinsurance for that service
- Whether a referral is required from your primary care clinician
- Whether prior authorization is required before the service is scheduled
Referrals, prior auth, and formularies
- A referral is your primary care doctor's permission for a specialist visit
- Prior authorization is the insurance company's advance approval for a procedure, imaging study, or medication
- A formulary is the list of drugs your plan covers, sorted into tiers
If a medication is not on the formulary or a service is denied, you have the right to appeal.
When a claim is denied
- Read the denial letter carefully — it will list the reason and the appeal deadline
- Ask the provider's billing office to resubmit with corrected coding if the denial is administrative
- File a written appeal with the insurer within the stated window
- If the internal appeal is denied, request an external review — every state has one
Get help
- Every hospital has patient advocates and social workers — ask
- State Health Insurance Assistance Programs (SHIPs) help Medicare beneficiaries for free
- Marketplace Navigators help with ACA plans
- Legal aid organizations help with wrongful denials
Key takeaways
- Keep every explanation of benefits (EOB), denial letter, and appeal in one folder
- Never assume a service is covered — verify in writing
- You always have the right to appeal
- A patient advocate is free at almost every hospital
Source: Centers for Medicare & Medicaid Services (CMS).