It’s a familiar scene. You go the doctor with a rash or sore foot or a chest infection and present your insurance card, only to be told that, even though you are covered, you still have to pay.

This is followed by an explanation of your deductible and co-pay, but the upshot is the same - you still have to put your hand in your pocket and hand over your hard earned cash, from which you’ve already paid your monthly insurance premium.

In some cases, patients pay the doctor up front and then fill out an insurance claim form and get back a cheque that covers all or some of the money spent on the visit to the doctor.

In other instances, the patient hands over the insurance card, the medical facility works out how much the insurance company will pay and then charges the patient the rest on the spot. In yet another scenario, the doctor bills the insurance company, gets paid some of the amount and then the doctor sends a bill to the patient for the remainder.

Figuring out how much you owe and why, can all be a bit of a quagmire.

To work out your potential annual medical expenses, a formula such as this is used: monthly premium + deductible + co-insurance + other costs like co-pay amounts and non-eligible expenses = maximum potential annual costs. Which is all well and good if you know what deductibles, co-pays or co-insurance even mean.

Here’s a fairly simple explanation of how it all works:

Deductibles

Your deductible is the amount of money that needs to be spent before your health insurance pays out any benefits from the policy. In other words, if your deductible is $500 a year, you need to spend that amount up front when you visit your doctor or dentist or optician before the insurance company pays for any of your costs.

Co-payments

The co-pay is a fixed amount that patients are required to pay when they visit the doctor and is often also used when buying prescription medicine.

Co-insurance

Your co-insurance is a percentage amount that is the responsibility of the insured person. For example, a co-insurance split could be 80/20, meaning that the insurance company will be 80 per cent of the treatment or procedure, and the patient or insured person will pay the remaining 20 per cent.

Pre-approval

Many insurance companies require pre-approval or pre-certification is required for certain procedures or treatments. This means that your doctor needs to submit information to the insurance company so the service can be pre-approved. This might include procedures such as outpatient surgery, certain scans and examinations or chiropractic treatments. If pre-certification or pre-approval is not obtained prior to getting the service or treatment, the insurance company could deny the benefit or only pay a certain percentage of it.

If you have health insurance coverage, which you are legally mandated to have, you should have a health insurance card.

Under the law, all medical facilities are obliged to accept these cards or at the bare minimum, check what coverage a patient has.

According to the Health Insurance Law (2005 Revision) and its associated regulations, medical facilities are required, upon verifying the identity of the patient and checking that he or she is covered for the visit, to obtain the payment for that visit from the patient’s insurance company.

“The health-care provider needs to accept the card and verify with the approved insurer that the person/patient has a valid health insurance card with current coverage and benefits that would cover the particular benefits/services that the health-care practitioner is providing to the patient at the time,” explained Health Insurance Commissioner Mervyn Conolly.

He added: “If the health-care provider is unable to verify the coverage and benefits, then they may refuse to accept the card.”

Mr. Conolly said the intent of the legislation is for health-care providers to accept health insurance cards.

“However, it is important to verify the coverage and benefit level, otherwise the health-care provider could incur bad debt, which is difficult to collect once the services are provided and the patient has left the health-care facility,” he added.

If a medical facility refuses to accept a health insurance card without even checking to verify whether the patient is covered, the insured person can file a complaint with Mr. Conolly’s Health Insurance Commission.

“The Commission does receive complaints of this nature and it is acknowledged that the verification of benefits can be a challenge for some health-care providers,” Mr. Conolly said.

To assist with the issue of checking health insurance coverage in patients, the Health Services Authority recently introduced an Electronic Verification and Adjudication System, which can be used by the more than 13,000 CINICO customers in Cayman. The plan is to expand that system eventually to private health-care providers and to other insurance companies.

Most insurance companies require pre-approval or pre-certification is required for certain procedures / services under the Generali Worldwide Plan.

Pre-certification involves the submission of certain information by your doctor to Generali Worldwide in order for services to be pre-approved – the entire process can be initiated with a phone call or email to Generali Worldwide in Cayman or Toronto.

The following services require pre-certification: All hospital admissions, outpatient surgery, treatment for inpatient mental disorders, all scope procedures, MRIs, CT Scans, vaginal ultrasounds and obstetrical ultrasounds exceeding two per pregnancy.

If pre-certification is not obtained prior to the services being rendered, cover for all services (including admission, surgery, scope, procedure and diagnostic testing) may be subject to denial or a reduction in your benefits to 50 per cent.