Gotta Cover Those Pre-Existing Conditions

[Fedup]

It's a common complaint. And a fairly misleading one too. One huge benefit of health insurance is that you get charged your insurer's "negotiated rate" for services. For me, that price is about 1/8th the sticker price.



So even if I don't exceed my deductible and never get reimbursed a single cent from my insurance company I may still get tremendous value from the policy. In fact that was my situation in 2015 where we more than earned back our insurance premium just through negotiated discounts.



Now some argue that you can get those same prices and better by negotiating to pay cash. I personally have never been able to make that work. And it certainly wouldn't work in any emergency scenario.

Maybe to you but I don't think that's how people expect insurance to work. I don't think it's misleading. Maybe we should pay negotiated rate without the insurance.

BTW, I did manage to get discount on emergency. I told them I didn't have any money. I recalled they did reduce some. I think the insurance paid the full bill but I lost my job and already spent the money. I think it was outrageous ambulance fee.


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[pb4uski]

....It doesn't work the way people expect it to work. If you have a deductible of $12,000 per year then it's almost as if you have no insurance. This is very common complain for ACA. ..

I don't get what the complaint is about. When you apply for the policy you know what you have to pay for premiums and that (other than certain well care defined in the policy) your costs have to exceed $12,000 before the insurer pays any claims. Why would people expect it to work any other way unless they are ignorant as to what they are buying? They may think it is too expensive but is it what it is and premiums are a function of medical costs.

They have insurance... if you have a serious illness and rack up a $100,000 hospital bill then you pay $12,000 and the insurer pays $88,000.

People complained about the cost of medical services and medical insurance for the last 10 years, both before and after ACA.

 

[HFWR]

DH tried this with an office visit.

His PCP of many years retired in 2015 and passed him to his replacement MD. Nice enough new doctor but he changed DHs high blood pressure medication and started him on a statin. He said they do things differently than the retired PCP.

During my recent yearly physical, my PCP mentioned that he is "graded" by the insurance companies. If you have certain markers, stuff like high "cholesterol", high blood sugar, etc., the insurance company actually expects (demands?) the doctor put you on the appropriate "drugs".

 

[HFWR]

I don't get what the complaint is about. When you apply for the policy you know what you have to pay for premiums and that (other than certain well care defined in the policy) your costs have to exceed $12,000 before the insurer pays any claims. Why would people expect it to work any other way unless they are ignorant as to what they are buying? They may think it is too expensive but is it what it is and premiums are a function of medical costs.



They have insurance... if you have a serious illness and rack up a $100,000 hospital bill then you pay $12,000 and the insurer pays $88,000.



People complained about the cost of medical services and medical insurance for the last 10 years, both before and after ACA.

I see the point, though it's not about confusion over expectations. Thank your lucky stars you only have to pay $12k that year you need a bypass or chemo, but for other less critical medical issues, for many, a $12k deductible is equivalent to having no "insurance", in the sense that that sprained ankle or upper respiratory infection is all out-of-pocket.

 

[Fedup]

I don't get what the complaint is about. When you apply for the policy you know what you have to pay for premiums and that (other than certain well care defined in the policy) your costs have to exceed $12,000 before the insurer pays any claims. Why would people expect it to work any other way unless they are ignorant as to what they are buying? They may think it is too expensive but is it what it is and premiums are a function of medical costs.



They have insurance... if you have a serious illness and rack up a $100,000 hospital bill then you pay $12,000 and the insurer pays $88,000.



People complained about the cost of medical services and medical insurance for the last 10 years, both before and after ACA.

Because in the past, they paid for the same premium with much lower deductible. Now they pay the same cost for $12,000 deductible. I'm sure people thought their health plans would get better post-ACA but they didn't. False promise often results in complaints.
Very few people would have $100,000 hospital bill. I'm 56, I haven't been seriously ill to ever paid that much in any year. If I have to pay $12,000 a year and don't ever get to use it, I'm sure I wouldn't be happy.
For the record, I have very good insurance through my husband. But everywhere I go, particularly for small business owner, this is the complaint I've often heard.
They are not ignorant anymore than you are too stubborn to see that they get no benefit.


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[Fedup]

During my recent yearly physical, my PCP mentioned that he is "graded" by the insurance companies. If you have certain markers, stuff like high "cholesterol", high blood sugar, etc., the insurance company actually expects (demands?) the doctor put you on the appropriate "drugs".

This is crazy. My doctor likes to push me to do extra tests. I often ignore him.


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[NW-Bound]

Are you kidding? Have you ever looked at a medical bill?

Amount for procedure: $989
Insurer negotiated amount: $102

I had a special blood test. The bill was something like $150, readjusted down to $35. What was really interesting was a certain item that was billed at a few dollars, and readjusted down to something like a few pennies! What could that be? A BandAid?

This is crazy. There's no other business that gouges like that. Even new car dealers are not so bad.

... DH knew he would be seeing the PCP for one last visit and our insurance would not cover it. I explained the cost of this and DH wanted to see the now out of network PCP.

So he went to his office visit in Jan 2016 and explained to the staff that he wanted to pay for this outside of the insurance. He took a credit card and cash and asked to pay, hopefully with a discount of some sort.

They told him that they could not process an office visit like that. All visits had to be sent to their billing department. He tried to explain that he changed insurance, etc and to not submit it, no one would be paying this but him.

The answer was that they had to submit it, there was no other way. So they submitted it to our 2015 insurance which took a few weeks and rejected it. They billed us and he called to explain and they said they had to submit it to his current insurance. So he gave them the info and it was rejected as out of network and not preapproved.

When the next bill comes he will call them again and at most they will offer a 10% discount. The bill is $178 and our old insurance used to adjust it to $112 as the negotiated rate, but we will probably have to pay $160.

This really bugs me because DH could have just found a new PCP with our new HMO and only paid $40 co-pay (ACA Bronze plan with $6650 deductible but not HSA eligible) but he insisted that he wanted to follow through with the one who changed his dosages.

So yeah, the idea that you can just go in and pay cash and not bother with insurance hassles......I wish it was that simple!

Isn't that crazy? The healthcare providers' bill processors are like automatons that cannot deviate from standard procedures, and the standard procedures do not cover people paying with cash out of their pocket.

Compare that to dental care. My dentist advertised a $49 checkup. So, I showed up, and after an X-ray and quick exam he told me everything looked good but I needed some cleaning. I expected that, as my last dental visit was 3 years ago. The dental assistant told me the cost, and it was reasonable so I accepted, and paid on the way out when it was all done.

An older friend told me that was how it was with doctors when he was growing up. His father was a milkman and did not have health insurance (perhaps back then nobody had health insurance). When the kids were sick, his father just took them to go see the family doctor and paid cash. I don't know how people settled bigger hospital bills back then.

Because in the past, they paid for the same premium with much lower deductible. Now they pay the same cost for $12,000 deductible. I'm sure people thought their health plans would get better post-ACA but they didn't. False promise often results in complaints.

Very few people would have $100,000 hospital bill. I'm 56, I haven't been seriously ill to ever paid that much in any year. If I have to pay $12,000 a year and don't ever get to use it, I'm sure I wouldn't be happy...

When people get older, they will have plenty of chances to use healthcare, and lots of it. That's why Medicare is going bankrupt.

My pre-ACA policy was very simple; below $10K I paid everything, while above $10K they paid everything. There was no copay or coinsurance. The $10K was also max out-of-pocket. Now, with ACA the premium is more, and the max out-of-pocket is also higher.

But, but, but there are some big differences. Pre-existing conditions are no longer excluded. And then, there is now no lifetime limit on coverage. My pre-ACA policy had a lifetime limit, which I never paid attention to because I told myself if I were that sick I would not want to live. It was probably $1M, or perhaps only $500K.

It only takes a few patients whose treatments cost a few $M to drive up the premium for everybody. And perversely, the really sick ones are cheap to cover. They die relatively quickly. Examples include lung cancer patients. After $100K or $200K, they are gone. Brain cancer kills even quicker, and many patients do not respond to treatments at all. Poof, they are gone in a couple of months after diagnosis. On the other hand, some chronic illnesses cost a lot more as they can go on for years before the patient dies, and cause all kinds of complications.

 

[Texas Proud]

DH tried this with an office visit.

His PCP of many years retired in 2015 and passed him to his replacement MD. Nice enough new doctor but he changed DHs high blood pressure medication and started him on a statin. He said they do things differently than the retired PCP.

DH tried the new dosages and the statin and needed a minor adjustment. He needed to come back for an office visit in Jan 2016. By then we had changed insurances and his new PCP is currently out of network. The new insurance is a HMO and there is no coverage for out of network.

Fine. DH knew he would be seeing the PCP for one last visit and our insurance would not cover it. I explained the cost of this and DH wanted to see the now out of network PCP.

So he went to his office visit in Jan 2016 and explained to the staff that he wanted to pay for this outside of the insurance. He took a credit card and cash and asked to pay, hopefully with a discount of some sort.

They told him that they could not process an office visit like that. All visits had to be sent to their billing department. He tried to explain that he changed insurance, etc and to not submit it, no one would be paying this but him.

The answer was that they had to submit it, there was no other way. So they submitted it to our 2015 insurance which took a few weeks and rejected it. They billed us and he called to explain and they said they had to submit it to his current insurance. So he gave them the info and it was rejected as out of network and not preapproved.

When the next bill comes he will call them again and at most they will offer a 10% discount. The bill is $178 and our old insurance used to adjust it to $112 as the negotiated rate, but we will probably have to pay $160.

This really bugs me because DH could have just found a new PCP with our new HMO and only paid $40 co-pay (ACA Bronze plan with $6650 deductible but not HSA eligible) but he insisted that he wanted to follow through with the one who changed his dosages.

So yeah, the idea that you can just go in and pay cash and not bother with insurance hassles......I wish it was that simple!

That is just a bad Dr office.... my old PCP is not in my network and he said he would charge me $70 for a visit and his cost for any tests.... no markup... I have been to him once since then and will go to him in a month or two... paid right on the spot and never was submitted to insurance....

I do this because I only get 2 $40 copay with my in network PCP, so I save them for if something else happens...

 

[MichaelB]

Bear in mind that the 'amount for procedure' number, the chargemaster price, is set to address the "Saudi sheikh problem" , and isn't related to the actual cost and normal profit margin for a procedure.

"You don't really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who's going to pay full charges."
-- Warren Browner, California Pacific Medical Center CEO

I've read this and seen it referenced a number of times, but think it's just a clever way to describe a practice that is actually much more distasteful. Reference prices that are 10x the negotiated insurance price are not real list prices, they are wildly exploitative and greedy. Like the secret negotiated prices for insurance intermediaries, they should be prohibited, as they disrupt the normal functioning of the pricing mechanism and exploit people when they are most vulnerable.

 

[audreyh1]

I've read this and seen it referenced a number of times, but think it's just a clever way to describe a practice that is actually much more distasteful. Reference prices that are 10x the negotiated insurance price are not real list prices, they are wildly exploitative and greedy. Like the secret negotiated prices for insurance intermediaries, they should be prohibited, as they disrupt the normal functioning of the pricing mechanism and exploit people when they are most vulnerable.

Agreed!

My doctor's office sends blood work labs to their "in house" place for cash paying customers for about $150 that they pay up front. But for patients with insurance, it gets sent to a major lab chain which bills the insurance company directly, about 10x the amount - like $1500-$1700 for the same fairly standard labwork! This in turn gets heavily "discounted" by the insurance company, so that the patient iultimately owes like $145.

It's insane!

 

[athena53]

Agreed!

My doctor's office sends blood work labs to their "in house" place for cash paying customers for about $150 that they pay up front. But for patients with insurance, it gets sent to a major lab chain which bills the insurance company directly, about 10x the amount - like $1500-$1700 for the same fairly standard labwork! This in turn gets heavily "discounted" by the insurance company, so that the patient iultimately owes like $145.

It's insane!

Yes, this is dysfunctional. One podcast I listened to suggested that insurers are OK with this system because the insured looks at the bill and says, "Wow-the insurance company got me a great deal!"

 

[FIRE'd@51]

While, I agree with the necessity of mandates; IMO there is a basic structural flaw in our current system, which the ACA didn't address. To keep the premiums down, all else equal, we must have everyone in the same risk pool. The existence of employer-provided health insurance virtually guarantees that there will be adverse selection, since the working population is typically younger and healthier than the general population and is in separate risk pools. Although it would be difficult, if not impossible, politically to do away with employer-provided health insurance, a step in that direction would be to eliminate the tax benefits of employer-provided insurance.

 

[Gone4Good]

Although it would be difficult, if not impossible, politically to do away with employer-provided health insurance, a step in that direction would be to eliminate the tax benefits of employer-provided insurance.

The ACA actually does this in a sneaky backdoor kind of way. The "Cadillac tax" is a levy on some expensive employer provided health insurance programs. But that tax isn't indexed to inflation so over time it will capture more and more employer plans.

It's a great idea designed to fix the politically impossible problem you raise. But like most important things in the ACA, this too is under attack and from both sides.

 

[FIRE'd@51]

The ACA actually does this in a sneaky backdoor kind of way. The "Cadillac tax" is a levy on some expensive employer provided health insurance programs. But that tax isn't indexed to inflation so over time it will capture more and more employer plans.

It's a great idea designed to fix the politically impossible problem you raise. But like most important things in the ACA, this too is under attack and from both sides.

Not only is it under attack, but it has already been extended because of labor-union pressure. Plus, there are also employer mandates in the ACA.

 

[pb4uski]

Because in the past, they paid for the same premium with much lower deductible. Now they pay the same cost for $12,000 deductible. I'm sure people thought their health plans would get better post-ACA but they didn't. False promise often results in complaints.
Very few people would have $100,000 hospital bill. I'm 56, I haven't been seriously ill to ever paid that much in any year. If I have to pay $12,000 a year and don't ever get to use it, I'm sure I wouldn't be happy.
For the record, I have very good insurance through my husband. But everywhere I go, particularly for small business owner, this is the complaint I've often heard.
They are not ignorant anymore than you are too stubborn to see that they get no benefit.

I guess that we'll have to agree to disagree on who the stubborn one is.

What you don't seem to understand is that medical service costs (which is the most important determinant in the cost of medical insurance) have increased dramatically so to mitigate the cost insurers have increased deductibles so they don't need to increase premiums as much as they otherwise would need to. If someone want that low deductible plan they can still buy it but the premiums are exorbitant because of the cost of medical services. The amount insurers can charge for overhead and profit is limited by law to 25% of claim costs and in many parts of the country competition squeezes margins to below 25%.

If someone has a serious illness and a stay in the hospital the total cost could easily reach $100,000. My wife had an operation for a broken leg a few years ago and stayed in the hospital one night before going home and the bill was over $50,000.

You say if you pay $12,000 a year and don't ever get to file a claim then you wouldn't be happy. Well if you know going in that you have to cover the first $12,000 of cost and you are 56 and have never been seriously ill then why in the world would you have a reasonable expectation that you will get something out of it? If you are 56 and have never been seriously ill and want to "use" your health insurance then you would need to buy a plan with a lower deductible... then you will get to "use" it... but you'll probably pay $24,000 a year in premiums.

Like it or not, that is the new reality for health insurance... which by the way... was how health insurance worked back in the 1950s and 1960s.

And I totally see that we pay high premiums and get little benefit. I pay about $6000 a year and over the last 3 years the insurer hasn't had to pay squat other than annual physicals.... but, I still buy insurance so if something bad and major happens I won't go broke paying the bills and I can get the negotiated rates for medical services.

 

[NW-Bound]

Let us not forget that workers already pay Medicare tax, that they do not get any benefits out of until they reach 65. They already subsidize the older folks. Now, you want them to pay for young non-workers as well?

Nobody wants to attack the problem at the root, meaning why something costs so much and what benefit it brings. Everybody just wants to shift the cost around, so that someone else will pay. In the end, we all pay.

Yes, this is dysfunctional. One podcast I listened to suggested that insurers are OK with this system because the insured looks at the bill and says, "Wow-the insurance company got me a great deal!"

+1

Instead of feeling good, I actually feel disgust with the whole thing. Come to think of it, if I only had to pay the low 6-figure cost that I and my son together incurred for our sudden illnesses, I could have self-insured.

 

[pb4uski]

...Although it would be difficult, if not impossible, politically to do away with employer-provided health insurance, a step in that direction would be to eliminate the tax benefits of employer-provided insurance.

That would be a huge step in the right direction and would make health insurance a lot simpler in that one would not have to change when you change jobs. Lots of benefits and it would level the playing field in the tax treatment of employer provided and individual health insurance.

 

[athena53]

If someone wants that low deductible plan they can still buy it but the premiums are exorbitant because of the cost of medical services.

There's also adverse selection involved. Who's going to pay the extra bucks for a low-deductible plan? People with chronic expensive conditions. So, that group has higher-than-average costs right from the start.

In a comment on one article I read on the subject, someone mentioned that they had retiree health insurance and had previously had the choice between a high-deductible plan with lower premiums, and one with lower deductibles and copays but much higher premiums. The high-deductible one was taken away. My guess is that they wanted the healthier group to join the more expensive plan to bring down the average costs.

From 1985-1995 I worked for a sub of Prudential and we had a deductible that varied according to your salary. Mine was $1,000- a high amount at the time but very manageable. It wasn't a perfect system, of course- if you had a high-earning spouse working elsewhere you still got the low deductible- but I thought it made sense.

 

[pb4uski]

Let us not forget that workers already pay Medicare tax, that they do not get any benefits out of until they reach 65. They already subsidize the older folks. Now, you want them to pay for young non-workers as well?

Nobody wants to attack the problem at the root, meaning why something costs so much and what benefit it brings. Everybody just wants to shift the cost around, so that someone else will pay. In the end, we all pay.

....Instead of feeling good, I actually feel disgust with the whole thing. Come to think of it, if I only had to pay the low 6-figure cost that I and my son together incurred for our sudden illnesses, I could have self-insured.

While I can understand one thinking about Medicare tax as subsidizing older folks you could also think of it as pre-paying for your own Medicare when you are over 65.... we know from the cost of health insurance for 60-64 year olds that the cost of health insurance for people 65 and older is much more than the $105/month that Medicare beneficiaries pay and the reason that it works is because you have already prepaid part of the cost through the Medicare taxes you have paid over all your working years.

I'll admit that the whole health care/health insurance situation is so totally screwed up that I think some broad, totally cataclysmic change is needed to reset the whole situation. While I have been opposed to single payer I'm now willing to consider it in that it is hard to imagine it could be worse than the cluster**** of a situation that we currently have.

 

[Gone4Good]

It seems a lot of people are talking past one another because some folks are comparing the insurance market we have against some unexplained ideal while others are comparing the insurance market we have with the one we had before. So one is coming to the conclusion that the ACA is a disaster while the other is arguing it's an improvement. Given each person's different starting point, both are right and neither can see the other's point of view.

I find myself in the later camp. We started with a terribly dysfunctional system. One in which insurers could refuse to insure people and one where currently insured people could have their insurance revoked for dubious reasons. That feature kept headline prices low for people who initially qualified for insurance but left even those fortunate folks vulnerable to losing insurance if they got expensively sick. That's not a product I'd call insurance and there's a reason it was cheap - in every sense of the word.

As someone who bought individual health insurance before the ACA, I can tell you I never felt secure that my pre-ACA policy would actually pay huge medical bills if I needed it too. Now, I no longer have those fears. And that's a huge improvement in the quality of my plan.

So the ACA fixes some, but by no means all, of the previous market's dysfunctions. But it attempts to address more of the problems than it is given credit for.

It has provisions that are supposed to improve price transparency. It's supposed to end pay for service billing. It's supposed to increase competition in a number of ways. It's supposed to transition the market away from employer sponsored insurance. It's supposed to encourage customer shopping for the best price and quality. It is supposed to reward quality of care over quantity of care. It is supposed to encourage provider innovation. And much, much more.

The ACA really is a wonky piece of legislation. But it is also a product of the process which means it was very much limited by the art of the possible. It's not even close to the best we could want, but it is the best we could achieve given the constraints we had.

Now the task is to continue to improve upon a good start.

 

[NW-Bound]

While I can understand one thinking about Medicare tax as subsidizing older folks you could also think of it as pre-paying for your own Medicare when you are over 65.... we know from the cost of health insurance for 60-64 year olds that the cost of health insurance for people 65 and older is much more than the $105/month that Medicare beneficiaries pay and the reason that it works is because you have already prepaid part of the cost through the Medicare taxes you have paid over all your working years.

I'll admit that the whole health care/health insurance situation is so totally screwed up that I think some broad, totally cataclysmic change is needed to reset the whole situation. While I have been opposed to single payer I'm now willing to consider it in that it is hard to imagine it could be worse than the cluster**** of a situation that we currently have.

The problem I have with Medicare is that some people don't make it to 65 to get anything out of it. So, some people get nothing, while some get lots and lots.

If a single payer system means putting the entire population on Medicare, we are already going broke covering for the 65+, how are we going to afford it for the entire population. Something must be done at the root causes.

 

[athena53]

The problem I have with Medicare is that some people don't make it to 65 to get anything out of it. So, some people get nothing, while some get lots and lots.

But that's how all insurance works! I've never had a Homeowners insurance claim in 35+ years of home ownership. I consider myself lucky. Another example: term life insurance. If you're still alive at the end of the term, all those premiums you paid go into the pockets of insurers (for expenses and profit) and the beneficiaries of those who died.

 

[pb4uski]

The fact that some people don't make it to 65 is factored into the cost.... if there was some provision where those who die before 65 got some sort of benefit then it would be more expensive to cover the cost that benefit.

I'm not convinced that we would go broke under a Medicare for all plan in that in aggregate what we pay today covers the aggregate cost of providing health care. Let's say the aggregate cost is the same (hopefully it would be lower).... who and how we pay for it would just be spread out differently. Like I said... I'm just now more willing to consider the possibility... I'm not on board yet either but I think something BIG needs to be done to fix the current mess.

 

[NW-Bound]

But that's how all insurance works! I've never had a Homeowners insurance claim in 35+ years of home ownership. I consider myself lucky. Another example: term life insurance. If you're still alive at the end of the term, all those premiums you paid go into the pockets of insurers (for expenses and profit) and the beneficiaries of those who died.

I beg to differ. To me, it is reverse age discrimination, and causes clashes between age groups. What is magical about that age of 65 when the gate suddenly opens?

Imagine that your fire insurance will not pay unless you are over 65. Why? Just because the 65+ deserve it more than you, who is still young and can afford to rebuild. And if you cannot afford, hey tough luck.

I do not like government intervention, but one thing I like about universal healthcare is that the young get something out of it if they fall ill prior to 65.

Anyway, I have read that the reason for the 65 age limit was that the proponents of Medicare actually wanted universal healthcare, but it was too big a change to pass the law, so they pushed to cover the elderly first. It did not cost so much at first (people did not live so long then anyway, and there were no expensive drugs), so they thought it was a safe first step. Hah!

And now, we are so used to it that people accept this age limit, and take it for granted.

 

[Sue J]

There's also adverse selection involved. Who's going to pay the extra bucks for a low-deductible plan? People with chronic expensive conditions. So, that group has higher-than-average costs right from the start.

In a comment on one article I read on the subject, someone mentioned that they had retiree health insurance and had previously had the choice between a high-deductible plan with lower premiums, and one with lower deductibles and copays but much higher premiums. The high-deductible one was taken away. My guess is that they wanted the healthier group to join the more expensive plan to bring down the average costs.

This is exactly what happened to us in 2013. DHs retiree insurance went from offering 3 options, high, medium and low, to offering one option, the high one. Very low deductibles, very low copays but the cost for us was $400 a month more than the low option we had been choosing for a few years. And then the next year they began phasing out the health care allowance for spouses. That would leave me paying $949 a month just for coverage for me!

The retirement system has a blog and when the loss of options was announced posters were livid! The reason given for dropping the lower cost options was "adverse selection".