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Medical costs
Old 08-27-2009, 09:55 AM   #1
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Medical costs

Many of us who retired before we are eligible for Medicare have individual high deductible health insurance policies. I'm one of those, choosing to go that route to have catastrophic coverage and use the negotiating power of an insurance company to lower the cost of what we pay out of pocket since it is unlikely we will come close to meeting our $5,000 deductible.

I recently had a check-up and just got the paperwork from my insurance company (BC/BS). I found the breakdown of "Billed vs. Allowed" charges very interesting:

Physical History: Billed - $192.00 Allowed - $95.99
Immunizations: Billed - $50.00 Allowed - $41.85
Routine Lab Services: Billed - $13.00 Allowed - $3.00
Routine Lab Services: Billed - $23.00 Allowed - $5.88
Routine Lab Services: Billed - $59.00 Allowed - $7.69
Routine Lab Services: Billed - $47.00 Allowed - $7.42
Routine Lab Services: Billed - $55.00 Allowed - $12.17
Routine Lab Test: Billed - $62.00 Allowed - $16.71
Routine Lab Services: Billed - $12.00 Allowed - $2.32
Routine Lab Screening: Billed - $130.00 Allowed - $2.79

Without insurance I would be on the hook for a total of $643.00; with insurance I'm paying $195.82, a savings of $447 (70%). Note the last item - the insurance company reduced the original charge by 98%!

My few previous bills have shown savings in the 40-50% range and I'm wondering if the change is due to increased charges by my doctor or decreased allowed amounts by the insurance company...
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Old 08-27-2009, 10:13 AM   #2
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If you didn't have insurance, the billed amount would be discounted. When Frank didn't have health insurance, he usually was able to talk the bills down to a small fraction (about 40%?) of the initially billed amount.

I think that an excess is billed to the insurance companies, to make sure that they get all of the meager amount allowed. Or maybe this is advantageous for tax reasons.

My BCBS is paying more than it used to, but my doctor is charging WAY more than he used to. Don't know if that is generally the case.

Every six months I see my doctor so that he can look at my lab test results and prescribe another six months of cholesterol meds. He walks in the room, says hi, how are you, looks at my lab tests, and says, "you are doing fine, your liver and kidney function is fine" and then he reads off my cholesterol and other lab test results. The total patient contact time is probably 5 minutes if that, and he charges $120 for that. BCBS doesn't pay that much. I only pay a small co-pay.
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Old 08-27-2009, 10:20 AM   #3
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Medical costs are like college costs. No one seems to know what things really cost--prices are charged willy nilly, and paid (by the insurance company) the same way.
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Old 08-27-2009, 10:20 AM   #4
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REW, looks like a lot of labwork. That is always heavily discounted by insurance from what I have seen. I expect an 80-90% reduction on labwork, generally speaking. A lot of times, they double or triple bill for lab services that are included in the dr's visit or included in other lab tests, so those get paid at "$0".

We have a high deductible plan for our family, and physicals (and labwork) plus immunizations are included for free. I would hate to pay those $500-600 bills for each visit for our kids out of pocket, but wouldn't mind if they were the $150-200 or so that the ins. co. actually pays. I did find out our Dr has an official policy to discount 25% off the sticker price if you pay in full at time of service for those patients without insurance. But that still gets you nowhere near the insurance company's negotiated price.

I wonder what the premium costs would be for a $1,000,000 deductible policy where the ins co essentially acts as a claims processor for us (ie we basically self insure). I'd pay something just to get the negotiated rates.
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Old 08-27-2009, 10:21 AM   #5
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Medical costs are like college costs. No one seems to know what things really cost--prices are charged willy nilly, and paid the same way.
Wonder why Priceline hasn't jumped all over this?
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Old 08-27-2009, 10:22 AM   #6
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Medical costs are like college costs. No one seems to know what things really cost--prices are charged willy nilly, and paid the same way.
But colleges can give you a price quote that is probably pretty close, yet dr's can't do that. Colleges even list their prices plus all fees, books, etc (estimated of course) on their web pages. Of course you get a negotiated price via financial aid/grants (especially true at private schools).
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Old 08-27-2009, 10:23 AM   #7
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My few previous bills have shown savings in the 40-50% range and I'm wondering if the change is due to increased charges by my doctor or decreased allowed amounts by the insurance company...
Looks like you still got that kind of deal for the doctor, but it was the testing that was the culprit. I notice that the percentage changes per test, and I speculate that when BC/BS was negotiating costs they were more parsimonious on some. Or perhaps they just didn't think you need to have your toenail fungus tested all the much.

My satisfaction with BC/BS Texas HMO has been improving in the last few years. Sure the prices have been skyrocketing, but I blame my prior employer for much of that, but every time I call to get a question answered or a problem resolved they have been very helpful and accommodating. It used to be a series of "you need department X" and transfer after transfer until I got a full mailbox. Yesterday I got a letter denying something for a strange reason, called the number indicated and got the Federal Employee side. Dude could have just said "not my department" but he spent some time, figured out the doctor's office had screwed up something, and gave me some advice on how to get it fixed.

I suspect some of the improvement is because of the bitter complaints about past customer service. Still, my recent experiences have been good with one glitch that got fixed with a single phone call.
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My BCBS is paying more than it used to, but my doctor is charging WAY more than he used to. Don't know if that is generally the case.
One of my niece's now ex-husband didn't get into medical school and wound up running the business side of a couple of different doctor groups. He had a number of stories about how he was helping them get more out of their insurance and Medicare billings by jacking up prices.
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Old 08-27-2009, 10:26 AM   #8
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But colleges can give you a price quote that is probably pretty close, yet dr's can't do that. Colleges even list their prices plus all fees, books, etc (estimated of course) on their web pages. Of course you get a negotiated price via financial aid/grants (especially true at private schools).
They can give you a price but it is not the college's cost of providing one education to one student. Price and cost are different.
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Old 08-27-2009, 10:31 AM   #9
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Wonder why Priceline hasn't jumped all over this?
Great idea!!! What would I bid for four years at a 3.5 star university? A 3 star liberal arts college?

Or open heart surgery at a 4 star medical center? A nose job?

I think you've come up with a new business, REW!!!!
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Old 08-27-2009, 10:37 AM   #10
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I wonder what the premium costs would be for a $1,000,000 deductible policy where the ins co essentially acts as a claims processor for us (ie we basically self insure). I'd pay something just to get the negotiated rates.
I know a very high net worth person who has 5 children. They self-insure. He would consider buying a policy like that to get negotiated rates but could not find anything with more than a $10,000 deductible. He isn't overly fond of insurance companies so he didn't buy. He says it is difficult to negotiate rates when you can't plead poverty. I guess he might be one of the few in the country who actually pays what is charged.
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Old 08-27-2009, 10:41 AM   #11
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I know a very high net worth person who has 5 children. They self-insure. He would consider buying a policy like that to get negotiated rates but could not find anything with more than a $10,000 deductible. He isn't overly fond of insurance companies so he didn't buy. He says it is difficult to negotiate rates when you can't plead poverty. I guess he might be one of the few in the country who actually pays what is charged.
This is the situation I see myself in in about 10 years (except just high net worth, not "very"). Self insuring the occasional $30,000 to $100,000 procedure/illness wouldn't necessarily break the bank, but paying $20k-30k EVERY year for insurance might.
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Old 08-27-2009, 10:46 AM   #12
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They can give you a price but it is not the college's cost of providing one education to one student. Price and cost are different.
Not sure if this is semantics, but the actual cost to the college is irrelevant to me, I just want to know what price I am going to pay. Their profit/loss/government subsidy per student doesn't matter to me. The same with the doc. I don't care if they make or lose money on me, I just want to pay as little as possible for adequate medical services.
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Old 08-27-2009, 11:28 AM   #13
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I don't care if they make or lose money on me, I just want to pay as little as possible for adequate medical services.
Okay, I wasn't going to ask this question because it's a little OT, but you kind of steered me back to it.

My youngest had some surgery about two months ago and insurance is covering (so far it seems) everything they're responsible to pay. My question regards something I think they might have been overcharged for.

Kid was scheduled to be in the OR Recovery room for 1-2 hours and then transferred to a room. Sometime before the 2 hour mark the nurse said "he's ready to go to a room" and made the phone call to get that done. But, because the hospital was nearly full, there wasn't a room available. We spent an additional 3-4 hours waiting on the room (nurse repeatedly calling for a room), and then another 1 1/2 - 2 hours because there was a room assigned but "we try not to send patients to a floor during shift change time".*

At the time it was just a minor inconvenience. When I got the bill I learned that the recovery room hourly rate is outrageous. I can't locate the bill at the moment, but total recovery room time charge was $5 - 6K. If I was paying the bill I would be demanding at least some reduction, because, while they did provide the service as billed, most of the time spent there was due to hospital scheduling conflicts and not medical necessity. The surgery had been scheduled 7 months in advance.

Since it didn't impact my deductible I didn't bother with it. But reading this thread got me to thinking. I am a member of a group/pool and it's one thing to think "ah, screw the insurance company, they're rich", but to some degree I am sharing the responsibility of overall costs with the other members of the pool. I'm not conflicted, just curious.

Would you call the insurance company and tell them they might be paying more than they should?

And I'm not just asking about this specific set of circumstances, but if there was a big overcharge on a medical bill that did not change what you paid, but the insurance co's payment, would you squeal?

*Edit to add - I can understand that. At shift change their was a lot of work to do catching up on what was happening with all the existing patients, and adding a new patient is a lot of work as well.
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Old 08-27-2009, 11:43 AM   #14
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Originally Posted by REWahoo View Post
Many of us who retired before we are eligible for Medicare have individual high deductible health insurance policies. I'm one of those, choosing to go that route to have catastrophic coverage and use the negotiating power of an insurance company to lower the cost of what we pay out of pocket since it is unlikely we will come close to meeting our $5,000 deductible.
That's basically what we do and for the same reasons. I've been amazed at the "discounts" too and really wonder if anyone ever really pays the 100% cost even if they don't have insurance.

Although in fairness our insurance does appear to cover some "routine" annual things and keeps a low copay for the first few doctor's visits. So that helps.

But we don't expect to get to the deductible until we encounter a serious medical situation.

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Old 08-27-2009, 12:32 PM   #15
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REWahoo, what is your monthly insurance premium? I’m about as far away from MediCare as you are. These are my current expenses:

547 ..... monthly premium, one person, HMO individual plan;
100 ..... co-pay for the “it” test*,
.85.50 . prescription medications,
732.50. August total

peace of mind, priceless

--------------------
* There was a doctor visit at $25.00 co-pay and other tests to get to the "it" test, paid in other months. I always say "an HMO appointment is actually eight appointments."

Okay, REW, you made me look. My HMO expense beyond premiums over eight months is $734.50 ($91.81/month). That is not counting $770 to the eye doctor and $270 to the dentist, the October dentist bill will be more because he will do x-rays. (Unaudited, numbers is hard.)
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Old 08-27-2009, 12:40 PM   #16
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Joe, I pay $250/mo for my HSA eligible, $5,000 deductible plan. No co-pays, no nothing - I pay 100% of the first $5,000 in medical and drug costs annually, then BC/BS kicks in at 80/20.
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Old 08-27-2009, 02:16 PM   #17
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Would you call the insurance company and tell them they might be paying more than they should?
Probably not. I called recently to ask about why I was charged 2x on a recent office visit. The first charge was for a physical (which is what I went in for), then the second charge was for a "sick visit" consultation. I asked the Dr to renew a common maintenance med rx, and he spent a minute or two verifying the chart and asking me a couple questions, then wrote the rx. The extra charge for the "sick visit" was for getting the rx renewed (which I erroneously assumed would be part of the physical). I called both my insurers and they said it was standard practice to pay both claims for office visits even though they happened at the same time and the second "office visit" consisted of two minutes.

So I figure the ins co would have the same attitude about paying for 6-8 hrs of recovery room, even though only 1-2 hrs were needed. It was properly provided, so they will reimburse. Why spend 30 minutes on the phone w/ the ins co when they will probably not do anything?
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Old 08-27-2009, 02:22 PM   #18
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At the time it was just a minor inconvenience. When I got the bill I learned that the recovery room hourly rate is outrageous. I can't locate the bill at the moment, but total recovery room time charge was $5 - 6K. If I was paying the bill I would be demanding at least some reduction, because, while they did provide the service as billed, most of the time spent there was due to hospital scheduling conflicts and not medical necessity. The surgery had been scheduled 7 months in advance.

Since it didn't impact my deductible I didn't bother with it. But reading this thread got me to thinking. I am a member of a group/pool and it's one thing to think "ah, screw the insurance company, they're rich", but to some degree I am sharing the responsibility of overall costs with the other members of the pool. I'm not conflicted, just curious.

Would you call the insurance company and tell them they might be paying more than they should?

.


I'm not sure there is anything they could do about it . Basically the recovery room had to charge for the time he was there whether it was a medical reason or hospital overbooking . Recovery rooms are staffed at a higher ratio of nurses to patients plus all the nurses are ICU certified . That is why the charges are so high . Unfortanetely the wait for a room is a common problem in hospitals not sure how they can remedy it . It is a little extreme to have to wait two hours for a shift change .
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Old 08-27-2009, 05:49 PM   #19
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Joe, I pay $250/mo for my HSA eligible, $5,000 deductible plan. No co-pays, no nothing - I pay 100% of the first $5,000 in medical and drug costs annually, then BC/BS kicks in at 80/20.
Does that include the missus? If so, it is a very good deal. In fact, it is not a bad deal just for yourself, given your age.
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Old 08-27-2009, 05:55 PM   #20
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No, oh no, it does not include DW. Due to some preexisting conditions, she is in the state high risk pool. She has similar coverage to mine - $5,000 deductible with some limited prescription coverage - at a cost of $554 per month.
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