This is the third post in a four-part series on the American healthcare system.
The Costs of “Billing Through Insurance”
Earlier this year one of my patients went to the ER with abdominal pain. The provider ordered a CT of the abdomen and pelvis with contrast because they thought he might have a kidney stone. They gave him some IV fluids and medications, and admitted him to the hospital for a few hours before discharging him home. They billed his insurance $18,000, but only $12,000 of this was covered. He now owes $6,000 for his brief stay.
Another one of my patients went to the ER just this last month for some stitches after being hit in the mouth with a baseball. After the charges were billed through his insurance, he was informed his plan was “out of network” and he now owes them $3,600.
I have experienced the uncertainty of being on such an insurance plan myself. Within two years of the passage of Obamacare, I was paying nearly $1,500 a month for coverage with an in-network deductible of $4,000 ($10,000 out of network). After meeting the deductible, there was a 50% co-insurance for additional treatment, with an in-network cap on out-of-pocket costs of $12,700 ($38,000 out of network). This was presumably one of the best individual plans available at the time.
When one of my patients with the same plan ended up having to pay $25,000 for treatment related to a hand injury in 2014 (there was no hand surgeon or hand therapist in network), I began to realize how vulnerable Obamacare had made us.
Many Americans are coming to terms with the fact that even if they can afford the insurance, they may not be able to afford the care. In other words, “health coverage” and “healthcare” are not the same thing. Keep this in mind when politicians try to tell you that Obamacare expanded coverage.
Another inconvenient fact for politicians is that millions of people lost their plans due to Obamacare. They then had to buy more expensive, lower quality plans, usually with very narrow networks (i.e. fewer primary care doctors and specialists). Millions more were forced into Medicaid (an even lower quality plan, with even fewer providers). Sign-ups were coerced under threat of penalty, i.e., the Individual Shared Responsibility Payment (also known as the “Obamacare tax”). Now millions more are losing coverage as the Obamacare Co-Ops collapse and insurers flee the Obamacare exchanges.
Even when faced with these devastating real numbers, some politicians continue to insist that we must maintain federal subsidies for Medicaid based on projected numbers in a flawed CBO report. In addition to fudging the numbers (i.e., counting people who currently don’t have insurance when they calculated who will lose insurance in the future), the report failed to take into consideration that as free-market reforms take effect and the price of insurance comes back down, many Americans will once again purchase insurance on their own.
Saving Money with “Self Pay”
While all of this has been going on, a quiet revolution has been occurring. More doctors and patients are turning to the free markets to bypass the heavy up-front costs of expensive government-mandated plans.
The last few years have seen the rise of membership practices. Direct Primary Care (DPC) offers memberships for $60-$100 a month, and usually covers unlimited office visits with many in-house services included or discounted. Concierge practices tend to be more expensive, but offer additional in-house services, and the doctor may even give you his or her cell phone number. Both place a high emphasis on customer service, often have same or next day appointment availability, and are oriented towards helping patients avoid hitting their maximum out-of-pocket insurance amounts.
There are other ways patients are saving money. For example, hospitals may charge several hundred dollars for laboratory tests when processed through insurance, but only a fraction of that if the patient pays cash. Likewise, they may bill your medical plan thousands of dollars for imaging services, but only a few hundred dollars if you pay at time of service. Bypassing the Pharmacy Benefit Manager (PBM) middleman and using GoodRx.com to find real-time prices and coupons for your medications can also save patients hundreds of dollars a month.
Non-Obamacare plans such as Liberty HealthShare are also gaining in popularity. Their family plan is $450 a month for $1 million in coverage per incident, with an out-of-pocket of $1,500 for the year. Physicals and preventive screenings are covered. There are no networks, and it is exempt from Obamacare’s Essential Health Benefits requirement. Truth be told, it is the closest thing to a free market medical plan still available.
“Doc” is a primary care physician in private practice in Colorado. Read his other posts in this four-part series: