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Have but don't use insurance?
Old 11-11-2014, 11:55 AM   #1
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Have but don't use insurance?

I am soon to finally retire and end my reign as OMY champion (I think). This means losing the employer health insurance subsidy and going onto COBRA at about $12k/yr. This is about the same cost as an individual plan for me and DW. The big difference is the $3k family deductible vs an individual $6k deductible. I think I'll keep the COBRA but it goes away after 18 months.

For me and possibly others, is it worth paying cash to individual doctors for a presumed lower pre-arranged cost rather than put things on insurance where I would never expect to meet the deductible? Does anyone have experience doing this? If worthwhile, how is the best way to negotiate below PPO rates?
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Old 11-11-2014, 12:59 PM   #2
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For me and possibly others, is it worth paying cash to individual doctors for a presumed lower pre-arranged cost rather than put things on insurance where I would never expect to meet the deductible?
I'll be interested in hearing any tips on this. My impression is that it is difficult to get a "preferred rate" up front, and that many doctors/health care providers are locked into insurance contracts that specifically prohibit them from giving anyone a rate lower than the rate the insurance company pays.
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Old 11-11-2014, 01:23 PM   #3
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Doesn't hurt to ask. Providers love getting paid in cash on the spot and cutting out the huge time sink in claims processing.

Not exactly the same, but the only similar situation I've had....I needed regular, frequent chiropractic adjustments for about a year. I was paying out-of-pocket for them. I asked if they would give me a "quantity discount" and they happily obliged .

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Old 11-11-2014, 01:25 PM   #4
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Checkout Direct Primary Care (DPC). Direct Primary Care -- Physician Payment -- AAFP

It is an emerging model where you pay a subscription fee to a provider directly.

The problem is that you would still need catastrophic insurance for hospitalization (IMHO).

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Old 11-11-2014, 02:20 PM   #5
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Did you think about what your 1040 would look like after you retire? If you spend your after tax money and don't have too much income from after tax investments, you might get by cheaper going with PPACA with subsidy that COBRA.

But to your question, I doubt, very highly, that you'll be able to negotiate any prices below PPO rates. You might just call the billing department and float that idea past them. I'd faint if they didn't just flat out say "forget it" (or words to that effect).

In my case, I came in without insurance, and I was charged a sky-high price that "nobody pays", since they usually give you an automatic discount. I've wrestled with several institutions to try to get down to what the negotiated rate would be for someone that did have insurance (PPO rate), but to no avail. I said it's negotiate or you'll get nothing. They just said they'd turn it over to collections.

They play hardball.
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Old 11-11-2014, 02:30 PM   #6
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The insurance companies already have pretty low negotiated rates with the providers. Seems like I see 10% or 0% of billed charges actually paid often enough. I'd check that first before going direct cash. Plus you get credit towards the deductible. Don't forget that many preventative measures may be covered without a deductible. If you have copays that may be your only cost, with the copay counting against the deductible. You'd have to get a spectacular cash deal to make direct cash payment worthwhile.
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Old 11-11-2014, 04:05 PM   #7
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...For me and possibly others, is it worth paying cash to individual doctors for a presumed lower pre-arranged cost rather than put things on insurance where I would never expect to meet the deductible? Does anyone have experience doing this? If worthwhile, how is the best way to negotiate below PPO rates?
I wouldn't think so unless the provider is willing to charge less than the negotiated rate, but even then you would be giving up the benefit of having those costs count towards your deductible if you had a health event. I don't see much benefit.
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Old 11-11-2014, 11:28 PM   #8
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You would give up health insurance completely to not pay any premiums? $12,000 (your yearly premium) wouldn't cover 1 day in the hospital, testing and doctors' fees.

This for me is the sole reason to have health insurance if you have no other reason.

You might be able to negotiate a slight price reduction with a hospital if you were paying cash, but the MD is already getting paid not much per patient unless said MD does a lot of procedures.

I was on family COBRA in 2011 when DH had pulmonary emboli out of the blue. My $1300 a month premium was worth the $35,000-$40,000 hospitalization bill not including a CT scan in the ER a few days after discharge for complications, follow up MD visits, etc.


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Old 11-12-2014, 12:29 AM   #9
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Once I phoned around to find out the cost of an MRI, without insurance they wanted over 2x the cost compared to the amount they would bill the insurance company.
I needed to find out as my insurance was so lousy it would only pay $200 and the rest of the billed amt was my responsibility.
it was $1,200 cash vs $500 billed to my insurance.
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Old 11-12-2014, 08:54 AM   #10
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This is one reason, with our present setup, it's not practical for health "insurance" to function like the other "insurance" we buy.

Imagine if the bill for new brake pads was $1K if you walked in with cash (though you'd need to talk to 10 people to get the real number), but if you had "car maintenance insurance" the insurance would pay the garage $125 and you'd get a bill for $25. We'd all >have< to buy "insurance" to cover almost every car repair. The "insurance man" would have effectively forced his way into every nook of the car repair biz, getting a cut of all the business and reducing pricing efficiency.
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Old 11-12-2014, 09:43 AM   #11
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You would give up health insurance completely to not pay any premiums? $12,000 (your yearly premium) wouldn't cover 1 day in the hospital, testing and doctors' fees.
I don't *think* the OP was talking about giving up health insurance, but rather negotiating a lower rate for when you're just in the deductible range.

I don't think you'll get anywhere on this. As others have said, they've already negotiated low rates, and what is the doctor's incentive to give you a lower rate than that?

And another thing, suppose you did this for $2000 of medical expenses, then later in the year had a major incident. They are going to use up the deductible first, and if you bypassed the deductible with that $2000 you already paid, you're going to pay it now. So all of a sudden that $3K deductible became $5K, or $6K became $8K.
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Old 11-12-2014, 09:44 AM   #12
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Did you think about what your 1040 would look like after you retire? If you spend your after tax money and don't have too much income from after tax investments, you might get by cheaper going with PPACA with subsidy that COBRA.
That's an option for 2016 but not for 2015. I have a substantial SERP check that will show up no later than February 2015 that will put me well out of the subsidy level.

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You would give up health insurance completely to not pay any premiums? $12,000 (your yearly premium) wouldn't cover 1 day in the hospital, testing and doctors' fees.

This for me is the sole reason to have health insurance if you have no other reason.
I have no intention to not have health insurance. My deductible will be substantial and not likely to be met unless I have a major event. I was wanting to consider whether lower costs may be available with cash payments knowing I was giving up any reimbursement for these lower fees if I should have a major event. I'd certainly use the insurance in case of a major event.
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Old 11-12-2014, 09:46 AM   #13
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This is one reason, with our present setup, it's not practical for health "insurance" to function like the other "insurance" we buy.

Imagine if the bill for new brake pads was $1K if you walked in with cash (though you'd need to talk to 10 people to get the real number), but if you had "car maintenance insurance" the insurance would pay the garage $125 and you'd get a bill for $25. We'd all >have< to buy "insurance" to cover almost every car repair. The "insurance man" would have effectively forced his way into every nook of the car repair biz, getting a cut of all the business and reducing pricing efficiency.

I have a strong distaste for all insurance. If I had invested every penny that has been spent on me for all insurance minus all claims out of pocket I would go from being one of the lowest net worth individuals here to one of the higher ones. As much as I distaste health insurance at least I know I am pretty much paying for everything upfront as I will not hit deductible. Homeowners? What a ripoff... Forced to pay premiums for 30k of outbuilding coverage, when the closest thing I have to an outbuilding is a few ant hills. And then forced to over pay worth of house just so they can collect a higher premium in turn.


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Old 11-12-2014, 09:48 AM   #14
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For me and possibly others, is it worth paying cash to individual doctors for a presumed lower pre-arranged cost rather than put things on insurance where I would never expect to meet the deductible? Does anyone have experience doing this? If worthwhile, how is the best way to negotiate below PPO rates?
Sounds like you are talking about the concierge medicine model, like in this article

Pros and Cons of Concierge Medicine - WSJ

Finding a concierge practice maybe difficult depending on location. Only reason I have/want insurance is for the "big one", some unexpected major event. I would rather just pay cash for routine items but you can't get the special rates then.
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Old 11-12-2014, 09:48 AM   #15
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This is one reason, with our present setup, it's not practical for health "insurance" to function like the other "insurance" we buy.

Imagine if the bill for new brake pads was $1K if you walked in with cash (though you'd need to talk to 10 people to get the real number), but if you had "car maintenance insurance" the insurance would pay the garage $125 and you'd get a bill for $25. We'd all >have< to buy "insurance" to cover almost every car repair. The "insurance man" would have effectively forced his way into every nook of the car repair biz, getting a cut of all the business and reducing pricing efficiency.
I totally agree the system is completely screwed up. As dictator I would decree that all health care pricing is the same to all and this pricing documentation is available to all. Insurance would only be a question of how much is covered and not the PPO pricing game.
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