Wednesday, May 23, 2012

High Anxiety Over High Deductibles

There are some things in life that are baffling. Why do electric appliances come with warning labels that tell you not to use the appliance while bathing? Why are there no smoking signs at the gas pump? Why do men's pants come in sizes that correspond to the circumference of your waist but women's dresses come in 0 to infinity?

Then there is the issue of high deductible plans.

Thirty years ago a high deductible plan was $1000 and you can forget about copay's. You saved your receipts and when you hit your deductible you filed a claim and sent in your collected receipts.

In a retro move, individuals and employers are now looking at plans without copay's and deductibles from $2500 - $5000 or so.

At a time when it is not unusual to have a credit card with a $5000 - $10,000 limit, and many people have several cards, what is the big deal if you have a bad year and have to spend $2500 - $5000 of your own money? And what if you saved $5,000 per year in premiums by opting for the high deductible plan over the lower deductible copay plan?

Of course the low deductible copay plans are an illusion since your OOP (out of pocket) on a large claim will almost always exceed $5,000, so what have you gained?

Not a damn thing.

And then we have articles, like one in The Tennessean, about how high deductible plans are leading to financial ruin.
Aileen Stalvey says she was “born to shop,” but shopping for surgery left her with a bill from Baptist Hospital for more than twice the amount she’d been quoted.
Her quandary is one that more will face as employers increasingly switch to high-deductible health plans — some of which require workers to spend as much as $5,000 before filing an insurance claim.
More on Aileen in a moment, but how about that comment that you must spend $5,000 before filing a claim?


For starters, most folks don't file claims, their providers do it for them. Second, when a claim is filed it is adjudicated and when you use a par provider the bill is repriced (discounted) according to the agreed upon fee schedule.

You get a discount even if the carrier has not paid a dime. Somehow this escapes the whiners who say they don't "get anything" for their premium dollars.
Stalvey’s problems began when she felt a strange sensation in her hip while mowing an embankment at her home last summer. The hip gradually got more painful until she learned weeks later that the neck of her leg bone — the part that fits into the hip socket — had fractured.
A British citizen married to an American, she had three options. She could stay in bed in hopes that it would heal. She could fly back to the United Kingdom, where the surgery would be free because of socialized medicine. Or she could have it done in Nashville and pay for it out of pocket.
While the reporter does not state it explicitly, it would appear that Aileen does not have health insurance.

And I especially love that part about getting free surgery in the UK. Wonder what the wait time would be for hip surgery?
When Baptist quoted a discounted cost of $4,586 because she was self-pay, she and her husband, Kim Stalvey, opted for her to have the surgery here. The couple paid that amount before her discharge, but later received a bill for an additional $4,751.
Herein lies the rub.

The hospital quoted a price for their anticipated services, but how about the surgeon, anesthetist, etc.?
“There isn’t standardization of practice in surgery where every surgeon does a procedure the same way or with the same equipment for every patient,” said Kristi Gooden, director of media relations for the hospital.
“Surgery pricing can vary greatly based on many factors, including the physician’s preference of technique for a particular procedure, instrumentation used or choice of implants or other supplies.”
Hip surgery isn't like getting the oil changed in your car or even new brakes. I recently had brakes installed on 4 wheels and was quoted a price up front. After pulling the tires and inspecting the brakes the price jumped another $200 because I also needed new calipers.

I could pay the extra $200 now or forget it and have to replace the brakes again in a few months plus calipers at that time.

Things happen, even with automobiles.
Aileen Stalvey is wary about any kind of medical procedure, even getting a hearing aid, after her hospital billing dispute.
“Trying to shop here for medical care is impossible,” she said. “When you call a doctor up and ask for an appointment, you can’t get an answer.
“They say they will charge you so much to come in and bill you later, but they can’t say what a hospital visit will cost or what a hearing aid will cost. That’s just so frustrating.”
I understand the frustration, up to a point, but really. Who shops for the cheapest surgeon?

If boob jobs are $5,000 each do you really want someone that will do both for $250?
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