The reason for surgery determines the answer and coverage.

Coverage is one of the big challenges in revamping the healthcare system. The framework for reconstructive and cosmetic surgery came to me this week as an easy way to explain 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. Cosmetic surgery is not one of those quality of life benefits. However, it is worth understanding the framework to better understand how the healthcare system works. 

Reconstructive vs. Cosmetic Services:

1/ Reconstructive Services

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. Conditions that are just mildly bad may not be covered. 

Reconstructive services are covered expenses under comprehensive insurance policies and government programs. It likely isn’t covered under a catastrophic policy. However, 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 services

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 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, the cost of healthcare would likely skyrocket. So if you’re planning to have cosmetic services or anything else that only enhances the quality of your life, budget accordingly.

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