Health 101: How We Lowered Our Costs

American Thinker ^ | October 27, 2010 | C. Edmund Wright

[libstripper]

I just got my health insurance renewal premium for 2011, and our family's cost went down 19 percent. Yes, down! -- and all because we did the opposite of ObamaCare for our family.

Now I am not an Ivy League grad; nonetheless, I figured out how to dramatically lower my health care costs two years in a row. And by costs, I mean both insurance premiums and overall expenditures for health care -- without sacrificing anything.

In other words, I have succeeded in "bending down the cost curve" for our family.

[libstripper]

This is the kind of health insurance plan (notice, I didn't say "health care plan") that works the best. Naturally, it's what Obamacare strives to eliminate.

[November 2010]

Anyone know if Florida has a major medical option?

[alicewonders]

Will this option even be legal when Obamacare takes effect?

[LostPassword]

I’ve seen the same thing for 20+ years as I’ve changed jobs and switch between employer-paid (2 sizes fits all) and self-paid (get exactly what I need for a family of 4). I’ve paid 30-50% less for personal coverage than employer-paid including all of the extras I need to pay. I’ve had 4 different personal plans during that time - all better than my previous employer-paid and better than all of my friends’ plans at the time.

Also, doctors and dentists have charged me less (often MUCH less) for the same checkup, shot, filling, etc. It’s a combination of

* less paperwork for them when I pay cash
* not hosing the insurance company on my bill to make up for getting hosed on something else
* talking with me about what’s needed and how much I can afford (a $60 temporary crown every 3+ years is working as well as an $800 crown. I’m on my 3rd - over 10 years and only cost me $180 so far)

[SMARTY]

“... health insurance is not what we use for band-aids and sniffles and flu shots and routine visits and the like. Nope. We simply pay for those out of pocket with something called “cash.” GASP!”

I think I described this previously. My brother used to own a collection agency and almost all the accounts were for a local hospital emergency facility.

Of these, over 80% of the accounts were for persons whose treatment was a covered (gov’t. agency, aid, etc.) expense. NONE of the recipients whose account went to collection, bothered to or knew how to make proper application for the reimbursement available from the gov’t.

Consequently, these past due accounts went to collection for which the hospital received, if anything at all, pennies on the dollar.

Everyone else who DID have coverage and DID pay for their own care in some way, had to accept a bloated bill for hospital care, just so the hospital could make up the shortfall resulting from unpaid treatment for indigent and lazy jackasses who used the hospital emergency room for their family doctor... and then walked away.

American taxpayers ALREADY paid ONCE so that these lazy, loser f&^%s could HAVE medical attention when ever they need it ... GRATIS AND ON DEMAND. So, in addition to paying higher taxes for this ‘government aid’, taxpayers get to pay AGAIN by having exploding hospital expenses thrown in their faces so the hospital can cover care for these people.

Let see if I get this right:

1. I pay an insurance premium (larger all the time)
2. I pay a deductible (larger all the time)
3. I pay for office visits (invariably)
4. I pay taxes, (more all the time) so the gov’t. can assist the ‘indigent’ (illegal’s – more like)
5. AND I pay increasing hospital expenses to cover THAT shortfall as a result of their treating people too stupid/lazy to apply for the gov’t assistance I ALREADY paid for ONCE!!!!!

That makes 5 (FIVE) times I have paid for health care…and the f*&^%$g doctor has NOT touched me YET!!!!!

[Jess79]

Makes a lot of sense, but the only way it will work on a national level is to get employers out of the business of providing health insurance as a benefit. Convincing employees that raising their deductible to $10,000 is a good thing is a pretty tough sell, especially when the employer is the only one who sees a premium benefit.

[outinyellowdogcountry]

Makes great sense. Too bad so many people don’t seem to have financial reasoning to figure this out.

[Pessimist]

Bingo!

You hit the nail on the head.

As is always the case, the root of the problem is gvt.

The reason employers ever got into health insurance was to circumvent gvt wage limits during (I think) WW2. (Or was that during FDR’s “raw deal”?)

[flowerplough]

“Also, doctors and dentists have charged me less (often MUCH less) for the same checkup, shot, filling, etc. It’s a combination of

* less paperwork for them when I pay cash
* not hosing the insurance company on my bill to make up for getting hosed on something else
* talking with me about what’s needed and how much I can afford (a $60 temporary crown every 3+ years is working as well as an $800 crown. I’m on my 3rd - over 10 years and only cost me $180 so far).”

3rd temproary filling? You oughta be on an old Seinfeld re-run, Mr. Costanza. And you know those “donut” spare tires provided with new vehicles for a decade or three, the ones no one likes much? Do you think I could save money by collecting up other people’s donut spares from their trade-ins and running those exclusively on my car?

[libstripper]

Makes a lot of sense, but the only way it will work on a national level is to get employers out of the business of providing health insurance as a benefit. Convincing employees that raising their deductible to $10,000 is a good thing is a pretty tough sell, especially when the employer is the only one who sees a premium benefit.

I've actually seen something like this work very well at the employer I retired from. It coupled a HSA to a major medical plan and provided $500/yr. for each employee. Then there was a deductible of about $1,000 followed by 80% reimbursement up to an annual out of pocket maximum of $4,000, after which a stop loss cut in. The initial price was about $270/mo. per employee. This was vs. about $450/mo. per employee for the next level of health care that covered just about everything subject to a 20% copay and almost no deductible. The cheap plan was hugely popular, even among employees with substantial, ongoing medical expenses. The monthly cost, over the three years I was in it before going on Medicare, actually dropped by about $20.00. For most people the savings in premium costs more than offset the extra direct medical maintenance expenses.

[KarlInOhio]

Moreover, we have actually saved more than that. Recently we had a pharmacy totally confused by our HSA account, and they were embarrassed to tell me through the drive-through that a scrip I was picking up was going to cost me about 245 dollars. In other words, I was going to pay the entire price -- and the pharmacy was going to report it to my HSA in case we did go over the ten-thousand-dollar deductible.

I said, "Give me the cash price." In other words, forget insurance -- just sell me the scrip. The cash price? Only 139 bucks. That's right. Simply by taking the bureaucratic function off the transaction, I saved over a hundred dollars. You know, how I buy almost every other product or service in my life.

This is one of the things that drives me nuts about medical care: near random pricing. I'm not asking for a sign to be hung outside the doctor's office like the gas station's price sign, but at least let me find out what the price is going to be. Some of the warehouse clubs have gotten a lot better with prescriptions so I can enter the drug and get a price on the web. But if I am having something relatively common like a simple gall bladder removal I should be able to shop it around to local surgeons.

[Jess79]

I’m sure the cheap plan was popular. The monthly premiums were a lot cheaper and employees were gambling that they wouldn’t reach the maximum annual out-of-pocket expense. Most years, they would not so it’s a good gamble. But, even if they gambled wrong, the max an employee would pay under that plan outside of the monthly premiums is $1100 since the employer was picking up half the tab for the deductible through the HSA, and the remaining $3000 towards the out-of-pocket had a 20% coinsurance rate. That’s a lot different then telling an employee that the first $10,000 they spend on medical expenses is coming entirely from his own pocket. Even if the employer contributed to an HSA, HSA annual contribution limits are set by the IRS and they are no where near $10,000. Yes, the employer could give some of that back by reducing the premium charged to the employee, but with healthcare costs rising the way they are, many small businesses are having to raise deductibles just to keep premium increases from putting them out of business.

[libstripper]

The interesting thing about the difference between the cheap plan and the next most expensive one was how much the premium for the next most expensive was just prepayment for services and medications that might or might not be needed. Indeed, even a person with relatively heavy expenses for maintenance meds. would usually find the cheap plan economically superior for many of the reasons you mention. The surprising thing was how the annual cost actually dropped. This leads me inevitably to think first dollar plans are a truly bad idea because people end up paying more for less due to increased administrative expenses and overuse for routine problems.

[Jess79]

Absolutely. Our company went to an HSA compatible plan back in 2005, shortly after they came out. We made sure that our out-of-pocket maximum was no higher than the out-of-pocket from our previous ‘traditional’ plan ($2500). The concept of a high deductible took some time for employees to adjust to, but once they realized they would not be paying any more max than they had before and the company would contribute $ to their HSA’s, they grew to like the plan. We were able to significantly lower our premiums the first year. Ours is a small group and we had a few pre-existing conditions that caused high usage so we never saw any annual premium decreases after the first year, but it did help us keep costs manageable. Now, Obama wants to get rid of the one innovative idea that’s actually worked to reduce costs.

I still don’t think a deductible as high as $10,000 is going to work unless we get employers out of the mix though. The only way that works, in my mind, is if individuals are buying the policies and seeing the entire benefit of the premium reduction.

[Jess79]

I just realized I mispoke here. $1100 (not incl premiums) is not the max an employee would pay. Rather, the max is $3500 not including the premiums. DUH... $4,000 - $500 employer contribution = $3,500. However, in order to reach the max, they would have had to incur annual medical expenses of $16,000, which is not likely to happen often for very many.