Why Isn’t This Covered? How Insurance Decides

Dec 24

Written By Bonnie Coburn

Insurance would cover a spaceship before they’d cover this inhaler!

You’re driving.

The GPS is on.

Wind in your hair.

Jamming to your favorite song, singing at the top of your lungs.

You are loving it!

You are obeying the speed limit, you’re in no hurry.

You’re not doing anything sketchy, you’re cruising.

You follow the directions exactly.

Two weeks later, you get a bill in the mail.

There’s an unflattering photo of you behind the wheel, mid-off-key chorus, along with a note that says you’re being charged a Toll Fee… for a toll road you didn’t even know you hit.

No signs.

No warnings.

Just a surprise.

That is what “I thought this was covered?” can feel like.

In healthcare, patients are expected to follow instructions, not anticipate hidden costs in contracts they haven’t seen.

Insurance decisions don’t happen in one place, by one person, or with one simple rule.

They happen at the intersection of several rule books, layered on top of each other, and they don’t always play nice together.

When something isn’t covered, it usually isn’t because someone made a judgment about you or your care.

It’s because the rules didn’t line up.

The Factors That Decide Coverage

To understand why insurance says no, you have to understand what is actually in play.

1. The Benefit: “Is This Even Included?”

Every insurance plan defines entire categories of care it will not cover, no matter how helpful or reasonable they may be.

These decisions are made long before you ever need care or make a doctor's appointment.

Think of this as “Is this road even on the map?”

If the benefit isn’t there, nothing else matters.

2. The Medical Policy: “Does This Situation Meet the Rules?”

If a service is part of your plan, then the insurance asks: Does this specific situation meet our definition of “medically necessary”?

This is where clinical decision-making and reimbursement logic quietly diverge.

Insurance company medical policies lay out:

Which diagnoses qualify
How severe it must be
What treatments must be tried first

Physicians’ clinical decision making asks: “What does the patient need?”

Insurance company reimbursement asks: “Under what exact conditions, in what sequence, with which code, and whose problem is it if it doesn’t work?”

A treatment can be reasonable, appropriate, and commonly used, and still not meet the policy criteria.

From the patient's perspective, this is confusing, because the care makes sense, you’re following the doctor's directions….but the rules don’t align.

Think of it as: You’re allowed on the road if you have prepaid the toll fee plan, but only at certain times, in certain weather, and if you’ve entered from the correct ramp.

3. The Coding: “Can the System Understand What Happened?”

Healthcare doesn’t run on conversations or context.

It runs on code. Every visit, test, procedure, and prescription must be translated into standardized codes so the insurance system can process them.

Those codes are what connect:

The care that happened
The benefit that exists
The medical policy rules

If the codes don’t line up correctly, the system may not recognize what actually happened, even if the care itself was appropriate.

From a patient’s perspective, this is invisible.

From the system’s perspective, it’s everything.

Two visits that feel identical to a patient can be treated very differently by the insurance based on things such as:

The diagnosis that was used
Which procedure code was used
Where the service was performed
How the service was described

This is where small technical details can turn into big financial consequences, without anyone intentionally doing anything wrong.

Think of it as: The toll scanner can only read what’s on the tag. If it can’t read it correctly, the system assumes you didn’t pay.

Doctors make decisions based on clinical needs and real people.
Insurance systems process those decisions as member IDs, codes, and policies.

That difference matters, especially when coverage decisions don’t line up with care.

👉 For more details on this process, see: Cracking The Code

4. The Payer Type Rules: “Which Rulebook Applies?”

Not all insurance follows the same rules. Different laws, budgets, and requirements govern different payers. That directly affects what they can and can’t cover (or will and won’t).

For Example:

Medicare covers what’s explicitly allowed under federal rules
Medicaid coverage varies by state and available funding
Employer-sponsored plans cover what the employer chooses to include
Marketplace (ACA) plans must cover essential benefits, with limits

This means a service can be:

Covered under one type of insurance or plan
Partially covered under another
Completely excluded under a third

Same care.
Same provider.
Different outcome on what is covered.

To patients, it feels random (and unfair). In reality, it’s contractual and tied to regulations.

If the benefit isn’t there, or
The medical policy criteria aren’t met, or
The coding doesn’t align, or
The payer’s rules don’t allow it,

Then the insurance says no.

Think of it like this: You have two cars on the same road, following the same GPS, obeying the same speed limit, but only one of them has a toll pass.

👉 For more details on the rulebooks, see: Who Pays For What (Parts 1 and 2)

The Patient Pays The Price

The part that hurts the most is that patients are doing precisely what they are supposed to be doing.

Following the instructions of their doctor.

Trusting the experts.

Showing up, taking the medication, getting tests, and scheduling the follow-up appointments.

And they are the ones at the end holding the bill.

From the patient's perspective, the situation seemed simple, the care made sense, the guidance was clear, and the decision felt necessary.

I experienced this personally during a long, frustrating diagnostic process. After months of daily hives, food reactions, and constant pain, my doctor recommended food sensitivity and allergy testing.

The test gave answers.

It also came with a $2,000 bill.

The testing wasn’t covered, even though, in my mind, it helped avoid far more expensive care down the line.

Another frustration is that the system assumes that you know the rules and have read all the fine print. But as a patient, you just want to freaking feel better and get some answers.

And when something isn’t covered, the patient becomes the one who has to figure out what went wrong, translate confusing explanations, and often pay for it.

This is why people stop trusting their insurance, the bills, and the process. When you follow directions, obey the rules, and still get penalized, confusion and avoidance are a natural response.

A big reason this feels so confusing comes down to one very common misunderstanding:

The difference between something being covered and something being paid.

A Big Misunderstanding: Covered vs. Paid

One of the biggest sources of frustration in healthcare comes down to a simple assumption.

If something is covered, it will be paid.

I hear you, this seems logical.

It just is not how insurance works.

When insurance says covered, it doesn’t mean:

Free
Inexpensive
Automatic
Guaranteed

It means the service exists on your plan.

Think of it as permission. You are allowed to take this road.

“Paid” depends on whether all the rules were followed.

Deductibles and coinsurance
Network status (in or out of network)
Prior authorization
Medical policy criteria
Coding and documentation
Payer-specific rules

Miss one of the requirements, and the payment can change, or disappear entirely.

Think of “paid” as being processed correctly and clearing all checkpoints.

You didn’t just take the road, you entered at the right time, with the right pass.

Once you understand that difference, a lot of frustrating bills start to make sense, and some exclusions start to feel both predictable and some… well, absurd.

Common Categories of “Not Covered”

Some services aren’t denied because the rules weren’t followed. They’re excluded outright, no matter how helpful, appropriate, or life-changing they may be.

These exclusions are written directly into benefit plans, long before a patient ever needs care.

(The examples below are ones I’ve seen personally. Your coverage depends entirely on the specific benefit plan you have.)

Fertility (Deeply personal, life-changing for some families, financially…. optional)
Weight loss medications (insurance agrees obesity is a medical condition, but we aren’t paying for it)
Vision & hearing aids (seeing and hearing are nice-to-haves, obviously)
Adult dental (because apparently, teeth are a luxury item after 18… some of my kids just started consistently brushing their teeth at that age!)
Long-term custodial care (turns out insurance can be great at emergencies… and terrible at aging)
Chiropractic / Physical Therapy (we support healing, just not too much)
Out-of-Network Care (you were unconscious, but we expect you to choose a hospital in your network)

When something falls into one of these categories, it does not matter how necessary it is or felt, how strongly it was recommended, or how common the service is. If it is excluded in the benefit plan, the insurance isn’t really weighing your individual situation; it’s following their rulebook.

The Policy & Pricing Layer

By the time a patient gets care, most coverage decisions have already been made.

They’re developed in the plan documents, and the benefits when you choose your insurance plan during open enrollment, when you wish to come with a crystal ball… or at least a Magic 8 ball.

This is the layer most patients never see, but it explains why so many coverage decisions feel rigid and impersonal.

So why don’t they cover more?

Insurance plans typically don’t decide coverage one service at a time. Insurance companies are a business.

They are built by:

Estimating budgets
Estimating risk
Selecting benefit categories
Deciding what to include, limit, or exclude

Additionally, insurance companies often play the game of follow the leader.

Even for people who are not eligible for Medicare (e.g., those over 65), their insurance coverage is likely quietly influenced by Medicare.

But why? Medicare is the largest payer. They set national standards, and often define what is “reasonable” and “necessary.”

Many commercial plans will use Medicare as a foundation, especially for what is not covered, and build upon it.

Coverage decisions are deeply influenced by cost predictability. Services that are expensive, ongoing, difficult to standardize, or hard to limit are likely to be controlled or excluded.

Insurance companies want to manage risk across thousands or millions of members (patients).

That doesn’t make you feel better, I get it, but I’m here to try and explain why it’s happening and why certain services seem to always be on the chopping block.

Understand more in detail:

👉Who Pays For What? Parts 1 and 2

What You CAN Do When Something Isn’t Covered

1. Ask Why, and Ask for It in Writing

Before anything else, get clarity.

Ask your insurance company:

The exact reason the service wasn’t covered
Whether it was excluded by benefit or denied by medical policy
The specific policy or rule they used

Why this matters:

Excluded benefit → usually not appealable
Medical necessity denial → often is appealable

If you want help understanding plan language, this may help:
👉 Understanding Health Plans
👉 Copay, Coinsurance, Deductible — Oh My!

2. Appeal (Even If You’re Tired and Skeptical)

Many people assume appeals are pointless; they are not! Appeals can succeed!

Documentation needs to be clarified.
Additional context is provided.
Medical necessity is better explained.
Errors are corrected.

An appeal is more likely to be worth your time when:

**The service isn’t covered as billed, but may qualify with more information**

Sometimes a service doesn’t meet the plan’s rules on paper, but could qualify if:

The doctor provides additional detail
The medical record better explains why the service was needed
An exception to the plan’s rules is requested
The claim was billed incorrectly (e.g., the wrong diagnosis was billed, the procedure code was incorrectly submitted)

Things to know:

You usually have multiple levels of the appeal process; it may need to be submitted and then followed up on.
Timelines are critical; you have a window of time to appeal.
You can request help from your doctor/provider
External reviews are sometimes available and needed
Medical notes matter; decisions are based on summaries and codes, not full clinical context. These details may change an outcome.

Appeals don’t guarantee a win, but it may be worth challenging the insurance company's original decision.

Think of an appeal less as arguing or fighting…and more as asking the system to look again with better information.

Want a step-by-step walkthrough?

👉 No Soup For You! Claim Denials Explained

👉 Appealing Denied Claims: Becoming the Claims Whisperer

3. Ask About Billing Alternatives or Re-Billing

Sometimes the issue isn’t about the care; it is about how the claim was billed.

Ask about billing alternatives or rebilling the claim

Check for errors on your detailed bill/claim (we’re all human, and humans and systems can make mistakes)

Whether the place where the service was performed was covered (E.g., the care may have been covered in an office but not at the hospital).
Same test. Different location. Very different bill.
If there’s a covered alternate treatment (this has to be done prior, but may be a consideration)

If you want to understand how claims flow after a visit:

👉 Your Claims Post-Visit Adventure

👉Check for errors and read your claim and EOB: This is Not A Bill? Reading your EOB

4. Use HSA or FSA Funds

They allow you to:

Pay for eligible services with pre-tax dollars
Cover items insurance excludes (within IRS rules)
Manage predictable out-of-pocket costs

This doesn’t necessarily make care cheaper, but it can make it more manageable.

(Always check eligibility rules; not everything qualifies.)

5. Ask for Cash or Self-Pay Pricing or Assistance

Sometimes paying cash is cheaper than going through insurance.

You can ask for:

Self-Pay Rates
Bundled Pricing (what is the total cost of everything)
Discounts for upfront payment

Assistance Programs: Depending on the service, you may have access to different programs.

Hospital financial assistance programs
Nonprofit or advocacy organization support
Pharmaceutical patient assistance programs

They aren’t always advertised, but they do exist.

For more on avoiding surprise bills and your options:

👉 Before You Pay Your Healthcare Bill

6. Keep records

Document
Calls
Reference numbers
Letters and your Explanation of Benefits (EOB)

Insurance decisions can take time (have you watched paint dry? It’s much faster). Details matter!

The system may be complicated, but you don’t have to navigate it blindly.

Wrap Up

If you take nothing else from this, please take this. You probably weren't wrong or careless, and you likely didn’t miss anything obvious. You followed the directions, and healthcare is really confusing and assumes that patients are speaking the language they use… This was never meant for a patient; it was built for insurance companies to reimburse providers for their services. But patients are left dealing with the outcomes.

Insurance coverage is not decided in the moment you need care; it’s shaped upstream by benefit design, medical policies, coding rules, and payer regulations that rarely line up clearly, but often leave you wishing you had a time machine… and in hindsight, you may have chosen a different insurance plan.

But let’s face it, no one can predict what could happen.

Believe me, I feel this personally.

You don’t need to become an insurance expert.

You deserve a map. One that can show you where those toll roads are.

That’s what I’m trying to build here, helping you navigate a system that is too complex.

Thank you for being with me on this journey, and for continuing to read.

Bonnie

📚 Missed the earlier posts in this series?

Catch up here: https://coviewconsulting.substack.com/

Why I Started CoView: Navigating Both Sides of Healthcare
Speaking the Same Language in Healthcare
Meet the Players: Patient, Provider, Payer
Cracking the Code
Your Claims Post Visit Adventure
This is Not A Bill? Reading your EOB
Who Pays For What? Part 1: Medicare & Medicaid
Choose Your Own Adventure: Commercial Insurance Explained
Copay, Coinsurance, Deductible Oh My!
No Soup For You! Claim Denials Explained
How to Appeal A Denied Claim
Understanding Health Plans
Before You Pay Your Healthcare Bill
Why Doesn’t My Doctor Know What I Owe

What’s Next: The lessons we can carry into 2026

As I look ahead to 2026, a few lessons keep coming up: communication matters more than we realize, denials aren’t always dead ends, transparency only works when it builds trust, insurance terms don’t have to be traps, and behind every claim is a person. Understanding your plan and your options shouldn’t be this hard, but it’s one of the most powerful tools patients have.