Surprising Things Not Covered by Health Insurance

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.


Breaking the Law

Person smoking drugs in a pipe

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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 yourself 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.

Illegal acts exclusions generally apply to claims that unintentionally result from the commission of an illegal act (drunk driving, for example). But medical marijuana is an example of a situation in which the prescription itself is not covered due to a quagmire over its legality. Medical marijuana is legal in much of the U.S. as of 2020, but it's technically still illegal under federal law. So it's not covered by health insurance, even if it's prescribed by your healthcare provider and legal in your state.


Travel Vaccinations

Closeup of unrecognizable pharmacist placing bandaid on customer's arm
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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.


Prior Authorizations Do Not Guarantee Payment by Health Insurance

Person getting an MRI

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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 an approved prior authorization is not the same thing as an approved claim. Here's an example of a prior authorization clause from Cigna:

"A Prior Authorization is not a guarantee that the services are covered. A Prior Authorization is a determination of medical necessity and is not a guarantee of claims payment. Claim reimbursement may be impacted by various factors including eligibility, participating status, and benefits at the time the service is rendered."

All insurers generally have some sort of similar language in their summary of benefits and coverage. In most cases, a pre-authorized service will end up being covered by your health insurance, although you'll have to pay whatever cost-sharing is required under the terms of your plan. But it's important to understand that prior authorization is not a guarantee of coverage, and the claim could still be denied after it's submitted to the insurer.


Incorrect Hospital Admission Status: Observation Status vs. Inpatient Status

Black adult patient lying down on bed hospitalized looking away to the window
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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: Inpatient or Observation.

Observation patients are technically outpatients, although they stay overnight or even longer in a hospital room just like inpatients. In general, if your healthcare provider 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.

On the flip side, if you're placed in observation status while you're in the hospital, you might be responsible for a larger share of the bill than you would have been as in inpatient. This is particularly important for Medicare patients, since inpatient hospital care (covered under Medicare Part A) has one deductible that covers up to 60 days in the hospital, while outpatient care (covered under Medicare Part B) has a 20% coinsurance with no cap on out-of-pocket costs.

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.


Nursing Home Care

Senior woman playing Ludo game
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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 custodial home health care yourself if you don’t have long-term care insurance or qualify for Medicaid coverage (the majority of nursing home residents do qualify for Medicaid, which pays for custodial care once a person has depleted nearly all of their assets).

This doesn’t mean that Medicare and health insurance companies won’t ever pay for a stay in a nursing home. 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.

7 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Reger, Alex. Office of Legislative Research, Connecticut General Assembly. Illegal Act and Drug and Alcohol Exclusions in Health Insurance Policies

  2. DISA Global Solutions. Map of Marijuana Legality by State.

  3. Cigna. Prior Authorization Services.

  4. U.S. Centers for Medicare & Medicaid Services. Skilled nursing facility (SNF) care.

  5. Kaiser Family Foundation. Medicaid’s Role in Nursing Home Care.

  6. U.S. Department of Health & Human Services. State Medicaid Programs.

  7. The New York Times. Still No Relief in Sight for Long-Term Needs.

Additional Reading

By Elizabeth Davis, RN
Elizabeth Davis, RN, is a health insurance expert and patient liaison. She's held board certifications in emergency nursing and infusion nursing.