Health Insurance 101: How to Avoid Breaking the Bank!

September 9, 2018/Uncategorized

The average American spends almost $10K per year on healthcare.

Want my “Health Insurance 101” info on how to lower that for yourself?

Now, that $10K figure is what the person pays and what their insurance covers, combined, but the number is still twice as much as other developed countries. You have to wonder what exactly is going on here in the ol’ U.S. of A.

I don’t want to turn this into a political post, or make any suggestions of my own. I just want to cover how lack of price transparency (meaning, knowing what the price is going to be beforehand), covers up something SHOCKING:

The huge price difference between hospitals!

One hospital may try and justify the same procedure for 5x the cost!

This doesn’t necessarily mean that the cheaper hospital is honest, while the more expensive one is corrupt. But it also doesn’t mean that the most expensive hospitals are the best. I’ll teach you some strategies for price shopping and balancing quality and affordability in just a minute, but first, to address this whole hospital mystery: of course, some hospitals just have higher overhead costs…because they’re larger or have state-of-the-art equipment in treatment options. But, these hospitals sometimes choose to offset the cost of the state of the art treatment, by charging more for EVERYTHING, even the simple stuff.

I just don’t think that’s right!

It’s not like the best hospital in your state  can put a cast on a broken arm better than the hospital 2 miles away from you — thus, no justification for the tripled or quadrupled price! But that’s why it’s so important to “price shop.” How? Well, your insurance company usually has an app or tool that shows you estimated/list prices for contracted rates they have with various facilities.

Of course, that’s where our healthcare system fails many of us, when it comes to knowing the price ahead of time…

Dr. Cristin Dickerson from Texas makes the good point, when you go to the supermarket, all the…products available are neatly arranged…The prices are plainly visible…” You can look at Brand a and brand B, compare their price and quality, and make an informed decision. Now, imagine if you later got a bill from the supermarket stating that you owe them $1,000 for that box of cereal?

Insane, right? Well, as you’ve probably experienced at some point in your life, healthcare doesn’t have that same reasonable guarantee that the list price, the quote you get from your doc or find online, is actually the correct price at all! You end up with a surprise bill: either you find out that the price of the service was way higher than you thought; your insurance covered way less than you thought; or (nightmare!) both!

So, I know my advice to simply use the price transparency tool from your insurance company isn’t the best way to “price shop” — not if that price isn’t reflected in your final bill, anyway!

Other than making sure your doctor, your hospital, your anaesthesiologist, EVERYONE is in your network before having a non-emergency procedure done, there’s not TOO much you can do about crazy healthcare costs.

Healthcare providers blame the insurance companies for paying too little, and insurance companies blame healthcare providers for charging too much.

They’re both right…but I think I’m preaching to the choir when I say, they are also both very wrong.

That said, let’s get to the good stuff, “Health Insurance 101”!

Whether you’re battling over a bill you already received, or you’re looking for the best doctor, there are a couple options I will always recommend: using a patient advocate service like Robin or Joany, where your “advocate” will not only make those angry phone calls on your behalf, but will also help you answer the maddeningly complex question, where should you go for treatment?

The other option I recommend is similar: many insurance companies actually have programs to help you find the lowest-cost services. Maybe a good name for those programs would be, “Health Insurance 101”! It sounds too good to be true, but they aren’t doing it out of altruism. They want to help you find the most affordably priced facilities within their network, because that way, it costs them less, too.

So you may get a surprise phone call from your insurance, before, let’s say, that MRI you’re having done…asking if you want to switch to a cheaper imaging center. Not bad, right?

One last piece to strengthen your armor if your insurance or health care facility has done you wrong: a health savings account.

This is an account that your employer can contribute to (assuming you’re insured through your employer), and that pre-tax money is also not taxed if you use it for qualifying medical expenses! Flex spending accounts are a similarly awesome concept, except you can only roll over a maximum of $500 from year to year, whereas with an HSA, you can just let that money grow forever (again, tax-free!).

Even all of those suggestions isn’t enough to protect you from every surprise medical bill.

But change is on the way, hopefully! Some good politicians all around the country, like Teresa Miller from PA, are proposing bills to FORCE better price transparency, and better communication between hospitals and insurance companies…reducing the amount of surprise bills that happen.

The system certainly isn’t perfect, but with a combination of:

  1. ensuring your provider is in network and your service is covered by your insurance;
  2. price shopping using apps and advocates;
  3. not being afraid to ask everyone LOTS of questions, and asking for clarification;
  4. making use of an FSA or HSA;
  5. most importantly for Health Insurance 101, calling up the facility’s billing dept. and/or your insurance, before giving up and paying your bill;

…you can navigate this crazy system, and come out on the other side still smiling!

Need a (cheap!) vacation after all this stressful talk about health insurance?

Check out my article on how to make traveling and stress-free!

Links:

Chicago Tribune

CNBC

Green Imaging

Huffington Post

 

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