Patient Rights Managing Medical Costs Print Surprising Things Not Covered by Health Insurance By Elizabeth Davis, RN Updated July 12, 2019 More in Patient Rights Managing Medical Costs Navigating Your Diagnosis Treatment Decisions & Safety Medical Records Patient Advocacy Healthcare Team Hospital Stay Safety You might not realize these common things are not covered by health insurance. Finding that you have to pay a big medical bill you thought your health insurance was going to pay can be a nasty surprise. Here’s what to watch out for. 1 Breaking the Law Diverse Images/UIG/GettyImages Your health insurance might not pay for healthcare costs you racked up doing something illegal. Known as an illegal act exclusion, if your health insurance policy has one, it means you won’t be covered for healthcare costs caused by your participation in an illegal act. Rack up an emergency room bill for $2,000 when you burned yourself lighting the grill at the family picnic? It’s probably covered. Rack up a $200,000 charge from the critical care burn unit after you caught your hair on fire freebasing cocaine? If your health insurance policy has an illegal act exclusion, that bill will be coming to you. Some states restrict illegal act exclusions, and many states prohibit insurers from implementing coverage exclusions based on the insured being under the influence of drugs and/or alcohol. You can check with the insurance department in your state to find out more about whether insurers are allowed to deny coverage in situations that involve illegal acts. 2 Travel Vaccinations Steve Debenport / Getty Images Getting shots before your exotic foreign vacation? Your health insurance might not pay for your travel vaccinations. While all non-grandfathered health insurance plans cover vaccines routinely recommended for preventative care in the U.S., vaccines for tropical diseases that aren’t a problem where you live are probably not covered by your health insurance plan. Need a tetanus shot because you cut your hand gardening in your backyard? The bill is probably covered by your health insurance. Need a yellow fever vaccine so you can go rafting down the Amazon River? Be prepared to pay for it yourself. 3 Prior Authorizations Do Not Guarantee Payment by Health Insurance Do you think getting prior authorization from your health insurance company for an expensive MRI, CT scan, or procedure, means the insurance company has agreed to foot the bill? Think again. Many health insurance companies require pre-authorization before an expensive test or procedure is done. But, just because your insurance company pre-authorized a test doesn’t mean your insurance company will actually pay for it. Prior authorizations generally include a clause that goes something like this: “This authorization is not a guarantee of payment. Benefit coverage is subject to medical necessity and member eligibility.” This means if the insurance company decides after-the-fact that the expensive test or procedure wasn’t necessary, it can refuse to pay the bill even though it pre-authorized the test or procedure. 4 Incorrect Hospital Admission Status: Observation Status vs. Inpatient Status Hispanolistic / Getty Images Your health insurance might not pay for your hospital stay if you were admitted as an inpatient but your insurance company thinks you should have been in observation status. When you’re put into the hospital, you’re assigned a status. The two most common are inpatient status and observation status. Observation patients are technically outpatients, although they stay overnight or even longer in a hospital room just like inpatients. In general, if your doctor expects you to be in the hospital across at least two midnights, your stay will be considered inpatient. But you won't know which status you’ve been assigned unless you ask. Your admission status is very important to your wallet. If your insurance company or Medicare determines that you should have been in observation status when you were actually admitted to inpatient status, the insurance company can refuse to pay the hospital bill. Sort of a technical foul, observation versus inpatient errors allow health insurance companies and Medicare to refuse to pay the bill. They’ll claim the hospital stay is not covered by health insurance since the hospital broke the rules by admitting you to the wrong status. On the flip side, if you're placed in observation status, since you’re technically an outpatient, you might be responsible for a larger share of the bill than you would have been as in inpatient. Outpatient services usually involve coinsurance and might not bundle services together. So, you could find yourself paying 20% coinsurance on each and every blood test, x-ray, injection, Band-Aid, and treatment you received while you were in the hospital as an observation patient. While the bill for your share of cost for outpatient services might seem outrageously large, think twice before you argue for inpatient status. A health insurer can deny the entire inpatient hospital bill if it determines the care should have been provided in outpatient observation status instead of as an inpatient. On the other hand, if you're going to need to stay in a skilled nursing facility after leaving the hospital, Medicare will only cover it if you spent at least three days in the hospital as an inpatient prior to transferring to the skilled nursing facility. Time spent in the hospital as under observation doesn't count towards the hospital days required to activate Medicare coverage for a skilled nursing facility. Learn more about observation status, how observation guidelines work, and why it costs more. 5 Nursing Home Care SilviaJansen / Getty Images Think your health insurance or Medicare will pay for nursing home care when you’re unable to care for yourself? Think again. Neither Medicare nor private health insurance companies pay for long-term care. You’ll have to pay for your nursing home, assisted living facility, or home health care yourself if you don’t have long-term care insurance. This doesn’t mean that Medicare and health insurance companies won’t ever pay for a nursing home stay. In fact, Medicare might pay for short-term, skilled rehabilitative services in a nursing home (assuming you've spent at least three days in the hospital as an inpatient before being transferred to the skilled nursing facility). But, it won’t pay for long-term custodial services. The key here is why you need the nursing home. If the goal of the nursing home care is rehabilitation, in other words, if you’re trying to regain skills you have a reasonable chance of regaining, then your health insurance company might pay for a nursing home for a short period of time. For example, you might be allowed a nursing home stay after a debilitating stroke while getting intensive physical, occupational, and speech therapy to help you re-learn how to stand up from a seated position, feed yourself, and brush your teeth. If the goal of the nursing home stay is purely custodial care (ie, assistance with activities of daily living, rather than an effort to regain lost skills and return to your own home), then your nursing home stay is not covered by health insurance. There are two notable exceptions. Medicaid, the state-based government insurance program for low-income people, covers long-term nursing home care for low-income people without the assets to pay for their own care. Also, many hospice programs provide an option for nursing home or inpatient hospice center care. But, since hospice services are for terminally ill people with a life expectancy of less than six months, you’re not likely to need this benefit for very long if you qualify for it. The Affordable Care Act included a provision called the CLASS Act (Community Living Assistance Services and Supports program), which would have allowed people to enroll in a public program that would have provided benefits to cover some of the cost of long-term care. However, by the fall of 2011, a year-and-a-half after the ACA had been enacted, the federal government had eliminated the CLASS Act amid concerns that it would not have long-term financial viability. For the time being, people essentially have three options for long-term care coverage: They can use up all of their assets, at which point they will likely qualify for Medicaid coverage, or they can purchase a private long-term care policy, or they can rely on personal funds to cover potential long-term care bills. Relying on health insurance (other than Medicaid), however, will not work. Was this page helpful? Thanks for your feedback! Sign up for our Health Tip of the Day newsletter, and receive daily tips that will help you live your healthiest life. Email Address Sign Up There was an error. Please try again. Thank you, , for signing up. What are your concerns? Other Inaccurate Hard to Understand Submit Article Sources Centers for Medicare and Medicaid Services. Fact Sheet: Two-Midnight Rule. July 2015. Medicare.gov. Skilled Nursing Facility Care. Medicare.gov. Your Medicare Coverage—Long-Term Care. Medicare.gov. Your Medicare Coverage—Skilled Nursing Facility. Centers for Disease Control and Prevention. Recommended Vaccines by Age. HealthCare.gov. Health Benefits and Coverage. Preventive Health Services. Kaiser Family Foundation. Health Care Reform and the CLASS Act. April 2010. Reger, Alex. Connecticut Office of Legislative Research. Illegal Act and Drug and Alcohol Exclusions in Health Insurance Policies. August 1, 2016.