Why do I still have to pay when I have insurance?

“Why Do I Still Have to Pay When I Have Insurance?”

Wendy Winn, PT, OCS

I’ve said it before and I’ll say it again: “Health Insurance Companies are not ‘health care’. They are for-profit companies looking to make money off of your dependence on the broken healthcare system in the US.”

Wondering why your insurance company doesn’t cover much? Because they are a for-profit business. For them, not for you.

Here are some costs to consider when thinking about the insurance system in the U.S.:

Cost to Employers:

The average employer cost to provide basic medical insurance to their employees has risen roughly 6.5% in the past year alone. “The average costs that U.S. employers pay for their employees’ health care will increase 6.5 percent to more than $13,800 per employee in 2023, up from $13,020 per employee in 2022, according to professional services firm Aon.” Because of the tight labor market, employers need to be competitive. Unfortunately, larger companies with greater buying power for insurance often secure lower costs (think bulk purchasing) and smaller or mid-size companies end up paying more towards their employees’ plans. This burdens smaller businesses.

Cost to Consumers:

It’s no secret that consumers also pay more for care. Because insurance companies are unregulated, they can quite literally pay (or not pay) whatever they want. There is no “standard” that they pay for services. Proven to be the ultimate loophole for insurance: the “allowed amount.” Next time you receive an explanation of benefits, please look at the “allowed amount.” This amount varies plan to plan, even under the same insurance company. This amount is not determined by medical necessity. It is quite literally whatever the insurance company decides without rhyme or reason. They might say they have a “system” for determining this, but will never ever reveal that “system,” to you or to us. Seems crazy right?

Two more concepts related to allowed amounts:


In our business, we have seen deductibles anywhere from $100 to $20,000. This is the amount you as a consumer must pay upfront before your insurance coverage even kicks in, that renews every year (usually on January 1).  Even though you are paying for insurance, this cost exists on top of that. Further, it’s not the actual amount you pay that goes towards your deductible, it’s often a percentage of, you guessed it, the allowed amount. So your actual money is not going towards your deductible.

Percentage coverage:

When you look at your plan, mainly for out of network coverage, you might see something like “70/30%,” implying you as the consumer are responsible for 30% of costs. This may be true, but it also may mean that they will cover 70% of the “allowed amount,” leaving you with the balance.

Example for out-of-network coverage:

You spend $300 at therapy and submit this receipt to your insurance company.

If you have a deductible, say $4000, the insurance company will not cover this cost. They might put the allowed amount, less your percentage, towards your deductible. Say they “allow” $65 for that code (which we never can know beforehand), and with a 70/30 plan, they will put $45.50 of that $300 towards your deductible. In order to meet this deductible, you will have to go to therapy 88 times in one year and pay $300 per session. (However, you probably only have a visit limit also, say 30 per year, so this is impossible.) And then, the insurance company will cover $45.50 per session, not $210 that you might expect. This is the system in which the consumer will pay a monthly premium but will never actually “get” their insurance benefits. 

Cost to Healthcare Providers

The largest challenge Custom Performance has faced is a true shift in our business model. We used to bill insurance and get reimbursement to cover our costs. That is no longer the case. Because of “allowed amounts” growing significantly lower and more unpredictable since 2019, we can no longer afford basic overhead. This is why many doctors now can no longer afford to “take “ insurance. We have stopped billing some companies because we were seeing reimbursements as low as $30. It’s not sustainable to operate in New York City with these numbers.

In 2023, we began to collect payment upfront from clients and now have to wait for customer’s insurance companies to reimburse us to determine the cost for each client. From a customer service perspective, this stinks. It introduces insecurity in the process, but we have no choice. Each client has a different plan and each plan is uniquely volatile in payment. If one thing remains constant, it is that reimbursement in general from insurance companies is down. 

From 2019 to 2022, the average cost reimbursed from insurance to us is down 50%. Yes, half. 

While this paints a bleak picture financially, I advise becoming an educated consumer. Health insurance does not need to be taboo. It is confusing (in my mind intentionally), but it doesn’t have to be. As someone who sees this day in and out, I’m happy to explain the process and walk you through questions. The only way to change this process is through a shift in consumerism – educating yourself and shifting your expectations to meet your personal needs. Bottom line: Do not rely on a privately held company to make your decisions about your health.

By Wendy Winn, PT, OCS

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