Friday, March 25, 2005

Mangled Care

What started out as a good idea to hold down costs quickly became a nightmare for almost everyone. About 15 years ago the health care industry was introduced to a concept called Managed Care. What began as Managed Care quickly deteriorated into Mangled Care.

In the “good old days” life was simple. You had basic coverage that paid $30 per day for room & board and a $400 surgical schedule. Maternity was included in almost every policy, mom was allowed to sleep through the process, she stayed in the hospital 4 days and the entire stay was less than $200.

Not long after that carriers started introducing something new called “major medical”. If your basic benefits expired (after about 120 days of benefit) you could pay a $100 deductible (an enormous sum in those days) and have the rest of your medical bills paid up to the unheard of maximum of $50,000. Since no one had bills that high the $50,000 limit was considered frivolous and many opted for the more reasonable $10,000 limit.

Well “Leave it to Beaver” is no longer on TV, except in reruns. Moms no longer do housework in high heels and pearls, and Dad doesn’t come to the dinner table in a coat and tie. The days of choosing any doctor or hospital and having no more than $100 or so out of pocket no matter how extensive your care don’t exist any more.

Now you have to deal with networks, copays, deductibles, pre-certification, second opinions, continued stay review and discharge planning. You may THINK you are covered in full by your plan only to discover a secret of Mangled Care called hidden providers.

Hidden providers are the care givers that don’t belong to any networks, are free to charge whatever they want for their services, and don’t have to accept what your carrier offers as payment in full. A few examples of hidden providers include:

Emergency transport (ambulance)
Lab & pathology
Radiation & chemotherapy
Private duty nursing

This list is not all inclusive but it does hit the most common ones.

Injured in an accident and have to go to the hospital in an ambulance? Your plan may pay $500 or less for emergency transport. If you travel by ground that may cover a third of the bill. If you travel by air you will be lucky if $500 covers even 10% of the bill.
Need surgery? You probably want anesthesia.

Guess what? The gas passer is out of network. He can charge whatever he or she wants. If you are lucky your carrier will cover 50% of the bill, maybe even a bit more.

And you might need some lab work done, particularly pathology. Yep, that’s another hidden provider.

Your plan document may read in such a way that you THINK your out of pocket on a major claim is limited to $1000 or less, but guess again. Hidden providers can easily boost your out of pocket to $5,000 or more.

Mangled Care just means you can no longer get by with just a major medical plan. You probably need to look at some way to plug the holes unless you plan on taking a second mortgage to pay your hospital bill.

(Authored by Bob Vineyard, CLU - filling in for the talented and beautiful Professor)
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