Last week I talked about the problem many of you are facing with skyrocketing insurance premiums and deductibles so astronomical you wonder if you have any health insurance at all. We got into this fine pickle because:
- US healthcare prices are the highest in the world.
- With the passage of the Affordable Care Act (ACA/Obamacare), health insurance became available to everyone with no exceptions and, depending on your income, premiums could be offset by federal subsidies. Suddenly everyone who had been denied insurance because of a pre-existing condition now had health insurance.
- The health insurance companies failed at the math. There wasn’t enough money coming in (premiums) to offset the tsunami of cash going out. Blue Cross of Illinois lost $1.5 billion in 2015, and by the end of 2016 five health insurers tossed in the towel and left the Illinois market.
- With losses like this, you (or your employer) received word of extraordinary increases in monthly premiums and deductibles. And suddenly you realize you’re making do without other things simply to cover your health insurance.
With Obamacare now deep-sixed by V. Putin’s president-elect Trump and a Congress slightly to the right of Attila the Hun, unless a replacement is in the offing the federal subsidies will disappear and insurers will return to denying pre-existing conditions and dis-enrolling the 23-to-26-year-olds allowed on their parents’ policies. Even with these steps taken, knowing how insurance companies behave in general it’s unlikely premiums will drop.
Today I’m going to offer several suggestions on how to spend your healthcare dollar more sensibly than on egregious premium increases. Although this information can be widely applied, I’m thinking specifically of those of you who are basically well (a big assumption, I admit). You’re more attentive to prevention than the average overweight couch potato, caring for yourself with healthful eating, exercise, stress reduction, no tobacco, etc. In other words, you’d fit right in with most of our patients at WholeHealth Chicago.
What follows describes a sort of financial reward plan for taking good care of yourself. It recommends a seat-of-the-pants, DIY approach to reducing insurance costs. It’s not for the person with a lot of potentially expensive health needs–for example, someone with diabetes, heart disease, cancer, autoimmune disorders, or the like. You will need more comprehensive coverage than what I’m going to describe.
If you’re basically healthy and don’t use the healthcare system much, compare your health insurance needs to your auto insurance. Would you really pay extra premiums for your oil changes, wash and waxes, and repair of every little dent? Of course not. You want the basics.
Here’s what I suggest for our essentially well group and their health insurance:
- You want coverage that gives you an annual check-up with a Pap smear, mammogram, and blood tests.
- You want coverage in case you need a specialist (though the odds are you won’t).
- You want to be able to use an emergency room and get a hospital bed.
- You may want prescription coverage for generics, though this is often not needed because the cash price for generics (e.g., with Walgreen’s Discount Club) is often less than what your co-payment would be if you used insurance.
If you sit down at your computer and limit your insurance requirements to what I’ve listed, with a few clicks you’ll discover the price drops dramatically. You can also save money with an HMO, a system I don’t particularly like because you’re really limited in the doctor choice department. On the other hand, you’re not marrying the HMO doc. You’re only seeing him or her once a year for a prevention exam.
Honestly, I don’t think most people really need any doctor component to their insurance. Years ago, the most popular health insurance policy was called catastrophic (sometimes referred to as “cost-sharing”) coverage. You were covered only for ER visits and hospitalizations. You paid your doctor and your pharmacist in cash. Insurance companies stopped selling catastrophic insurance because there was so little profit in it, but in fact that’s really all many of you need.
Let me give you a couple examples
One couple I recently spoke to are in their 40s and both are very healthy. They bemoaned that their individual policies had risen to $1,200 a month with a $5,000 deductible (this is $14,400 a year). They take no prescription drugs and come to see us just for a check-up. But with cost-sharing, their expenses are as follows:
- A full physical exam is $175 to $200.
- The accompanying lab tests (from any of several discount lab/x-ray companies), which might include a blood count and metabolic/cholesterol/thyroid profiles, are around $200.
- Getting away from overpriced hospital radiologists, you can get a mammogram for under $200.
- Other diagnostic tests are also much lower. An MRI of the brain or spine is about $500 instead of $2,500 at Northwestern.
Prescription drugs, if you use generics, are fairly inexpensive, especially when you pay cash and avoid your prescription insurance benefit. You probably don’t know this, but pharmacies are among the many healthcare providers that price-gouge insurance companies. You might pay $20 cash (without insurance) for your prescription with a GoodRx discount card. If you fill the same prescription using your insurance, you pay a $20 co-pay but your pharmacy bills your health insurer an additional $50. That’s right. Your drug cost is $20. Use your insurance and the total cost is $70.
If you need a brand-only med and your insurer denies it or insists on a really stiff co-pay, just have your doctor fax your prescription to Universal Drugstore in Canada. Here’s one of my favorite examples: Six tablets of Alinia (nitazoxanide, for intestinal parasites) cost $458 (you read that right, $76 a pill) in the US. But in Canada, 60 tablets are $100 (cash or credit card).
Let me stop here and remind you that by paying cash for health care services, none of this is submitted by the provider to your insurance, and thus nothing applies to your deductible. You can, however, submit it yourself or, if you have one, use your HSA (Health Savings Account).
But consider the advantages. Would you rather pay $500 for an MRI (cash) from an unpretentious MRI center on Lincoln Avenue or have the exact same procedure at Northwestern for
$2,500? Northwestern is happy to submit the charge to your insurer, but with your $10,000 deductible, you’ll be the one paying it.
Unless you’re really enamored of going to a hospital situated in one of Chicago’s most gorgeous locations (and property tax-exempt to boot) and you like the hallways of Carrara marble, just go to Lincoln Ave. The radiologist reading your report probably works at Northwestern anyway.
I think the term for all this, health cost-sharing, is a good one. If you don’t have any expensive chronic health conditions and you’re rarely in contact with your physician anyway, why pay whopping premiums for services you don’t use? WholeHealth Chicago patients, who prefer alternative therapies anyway, often use conventional medicine only as a last resort.
They’ll visit their acupuncturist, nutritionist, or herbalist first. They’ll try some natural products, nutritional approaches, and lifestyle changes they’ve read about online. And since they’ve been taking good care of themselves all along, likely whatever’s wrong they’ll make a quick recovery.
Should every aspect of health care be an exercise in comparison shopping? The answer is yes, now more than ever. And until we agree to cover everyone with a fixed-price, single payer system (popularly called Medicare for All), if we don’t want to go broke we’ll all be doing a lot of bargain hunting in the future.
David Edelberg, MD