5 Ways Healthcare Could Take You From Riches to Rags

By pokitdok,

According to a recent article on Huffington Post, even rich women fear they could become bag ladies, often as a result of a health related incident.  It’s a growing trend and concern even among the well-heeled, with many outrageous hospital claims and bills going viral like the surprise $117K bill covered recently by the NYTimes - a bill from a doctor the patient didn’t even remember meeting!

As the San Francisco, New York and other urban housing markets heat up, so, too, it seems, do monthly health insurance premiums and health related expenses. Even for those considered wealthy by the rest of the country’s standard, cutting costs and staving off unforeseen health expenses has become increasingly important. After all, the most financially secure among us could still find themselves in an unpredictable health situation, so here are a few scenarios to be aware of.
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1. You’re Involved in an Accident or Suffer an Unexpected Injury

Well-to-do and healthy millennials are increasingly choosing high-deductible health plans, sometimes known as “catastrophic plans”. Many, especially those in San Francisco, are also choosing to ride their bikes to and from work - a healthy, low cost and environmentally friendly choice, but one which carries added risks.  Not long ago, a former colleague was involved in a hit-and-run accident one morning while riding his bike to work. While he lay there unconscious, someone called an ambulance on his behalf. He ended up being fine physically, but financially it was a different story. He spent the next six months negotiating and fighting a $12,000 emergency room and ambulance bill, not realizing that with a catastrophic healthcare plan, he would end up owing a lot if there was indeed a catastrophe. Ask yourself: What health insurance plan do you have and what does that truly mean for your wallet? Is riding your bike to work a financially smart move, or one that could put you in serious financial jeopardy if you end up in an accident?

 

2. You Don’t Understand or Negotiate Costs Up Front

One might not immediately consider Modernluxury.com to be the go-to source for saving a buck, but they recently featured a post about negotiating your healthcare costs up front to save money. Quoting our CEO Lisa Maki,  “High-deductible plans are potentially one of the best things to happen to American healthcare.” With these plans, doctors are processing paperwork only to find that the bill should have gone directly to the patient. According to Maki, that means that they lose around 30 to 50 cents for every billable dollar—and it takes them longer to get paid, which is not in their best interest. But for the first time in healthcare history, the power is increasingly in the hands of the patient. You can now take charge of your financial fate and physical health by talking about price tags before signing on the dotted line.

 

3. Your Provider is Suddenly Out-of-Network

An “in-network” provider is a provider that has a pre-negotiated agreement with your insurance carrier. That means you are ‘approved’ to see them and your carrier will cover some of the cost of your visit less a co-pay. However, network status can change frequently and seems to be doing so more rapidly in recent months. One provider that is in-network today may not be tomorrow. Take, for example, my physical therapist. Last week’s visit only incurred a $30 co-pay, this week I was on the hook for the full $180. Often, you’ll need to be armed not only with current provider network status, but also with the CPT (Current Procedural Terminology) code to ensure the procedure itself is covered. If you find that a provider you must see is out-of-network or a procedure is not covered, it might behoove you to negotiate a same-day “self-pay” discounted price, which in many cases will knock off 25%, just as it did for me during a recent ER visit.

 

4. You Lose Your Job Unexpectedly

With the addition of publicly sponsored state healthcare exchanges, you may think you’ll be fine if you have a gap in employment. However, high income individuals making over $190K (high in most of the U.S. but just enough to squeak by with a family of four in the Bay Area) unfortunately aren’t eligible for state discounts through Medicare or Medi-Cal. Without employer coverage, annual premiums in some areas can top $2K-$3K per month for families of four, a cost unforeseen and unfathomable even 3-5 years ago, leaving those families spending nearly 25% of their take home pay on healthcare premiums alone. It’s also important to consider that parents are paying for those costs for more years than ever before, up to age 26, which is the earliest that most post-college grads are able to secure or pay for their own healthcare. Suddenly having and insuring a family is much more expensive, especially if you lose your lucrative job for a stretch. 

 

5. You’re Taken to the Wrong Hospital

Similar to the scenario above, hospitals also have pre-negotiated agreements with insurance companies. What’s the difference, you ask, if you were taken to the wrong hospital while unconscious in an ambulance? Well, in the case of Megan Rothbauer, the difference between a $50,000 bill and a $1,500 bill was a whopping 3 blocks.  Our Seattle pricing demo further illustrates how prices between hospitals can vary drastically even within the same zip code.

 

What Does it All Mean for You?

The best thing to do to protect yourself financially is to stay covered under a plan that works for you and your family. Know all of the costs before you go in to seek medical care, and stay informed like you would for any other consumer purchase. Make sure your plan includes a maximum allowable out-of-pocket ceiling that you can afford in a given year so you don’t get sticker shock in the case of a catastrophe.

The opinions expressed in this blog are of the authors and not of PokitDok's. The posts on this blog are for information only, and are not intended to substitute for a doctor-patient or other healthcare professional-patient relationship nor do they constitute medical or healthcare advice.

  Tags: Healthcare consumerism