The reason for surgery determines who pays.
The framework for reconstructive and cosmetic surgery is an easy way to understand covered vs. non-covered services and limited vs. premium insurance.
There are three words: Bad, Good and Better that determine the reason for surgery and coverage. In short, changing something from bad to good is reconstructive whereas changing something from good to better is cosmetic. Covered services generally stop at good.
Some employers are starting to include services that have traditionally not been covered [ie. fertility services] because they enhance the quality of life. That’s why it is worth understanding the framework to better understand how the healthcare system works.
Reconstructive vs. Cosmetic Surgery
1/ Reconstructive Surgery
Reconstructive surgery is done to restore the body to “expected” function and/or appearance. The idea is that something is “bad” resulting from an event such as an accident, injury, illness or birth defect and it needs to be fixed in order to return you to “good” health.
An example is breast reconstruction following a mastectomy. It’s not necessary to sustain life, but it restores the body to expected appearance. Breast reconstruction is a pretty clear cut example but there are times when coverage is not as clear. There are different degrees of bad.
As a general rule of thumb, conditions that are slightly less than perfect will likely not covered unless it is contributing to or causing another qualifying medical condition. Reconstructive services are covered expenses under comprehensive insurance policies and government programs. It may not be covered under a catastrophic policy.
Reconstructive surgery is considered a qualifying medical expense for Healthcare Savings Accounts [HSA]. HSA enables you to pay with pre-tax dollars and save you 20-30%.
2/ Cosmetic Surgery
Cosmetic services are done to enhance your appearance or more broadly, improve the quality of life. The idea is that the body part is already “good” because it looks and functions as expected. Surgery or another cosmetic treatment would just make it “better”.
An example is breast augmentation. It’s not necessary to sustain life but for some, altering the size or shape may enhance the quality of their life.
Cosmetic services are not covered by insurance and are not considered a qualifying medical expense for a HSA. If it was covered or considered a qualifying medical expense, the cost of healthcare would likely skyrocket. So if you’re planning to have cosmetic services or any other healthcare service that only enhances the quality of your life, budget accordingly.
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