YIKES! The out-of-pocket costs of my health insurance are clobbering me.

Back in the day we got health care indemnity insurance at work with no contribution toward the premium, and a modest deductible and co-pay.

Employer based health insurance and health insurance obtained from a public or private exchange now includes cost-sharing, disincentives and penalties. Most policy holders don’t know how much risk-sharing is involved until they get a big, unexpected bill after submitting s claim.

It’s important to learn the new health care insurance vocabulary and to be an educated consumer.

“Patients who don’t grasp fundamental health and insurance concepts are less likely to make smart decisions about when and where to seek care, experts said. In fact, people with low “health literacy,” as experts put it, are more likely to be hospitalized and use costly emergency rooms, according to the Institute of Medicine.” (1)

With this array of policy limitations, it is important that physicians consider affordability (out-of-pocket costs) as a factor in ordering diagnostic tests, suggesting referrals to specialists, and writing prescriptions.

So let’s get started:

REFERENCE PRICING.  “Reference pricing serves as a reverse deductible. Rather than the patient paying up to a defined limit and then the insurer covering the remainder, the insurer pays up to a defined limit and the patient pays the remainder. This has the remarkable feature of exposing the patient to the variation in prices for treatments that are above deductible thresholds. And the patient’s contribution isn’t limited by an annual out-of-pocket maximum. “(2))

FIXED INDEMNITY PLANS. “Fixed indemnity plans typically pay a limited cash benefit, with no deductible, to people who are hospitalized or encounter other medical costs. But the federal government said it was concerned that people might confuse those plans with standard health-insurance plans, and that the fixed indemnity plans alone couldn’t be considered to be coverage under the law’s requirement for most people to have insurance or pay a penalty.” (3)

VALUE BASED INSURANCE. “The additional cost when patients choose procedures that research shows are unlikely to help their condition is a key element of ….value-based insurance, the premise of which is that a mix of financial carrots and sticks can steer patients toward medical services that will help them and away from ineffective or unnecessary ones.” (4)

CONSUMER DIRECTED HEALTH PLANS.  “Consumer-directed health plans (CDHPs), which feature a high deductible and a personal health savings account, can reduce medical spending by employers and consumers.” (5)

EMPLOYER DEFINED CONTRIBUTION. “The idea that employers might decide to drop their health plans and replace them with a “defined contribution” for employees has been around for years. It’s one way for employers to control their expenses in the face of relentlessly rising health care costs. Now that the health law has created new online marketplaces where people can shop for coverage and made the individual market more accessible and affordable, the idea is gaining traction.” (6)

SHORT-TERM POLICIES.  “Consumers who missed open enrollment on the state health insurance marketplaces this spring or who are waiting for employer coverage to start don’t have to “go bare.” Short-term policies that last from 30 days up to a year can help bridge the gap and offer some protection from unexpected medical expenses. But these plans provide far from comprehensive coverage, and buyers need to understand their limitations. ” (7)

INSURANCE WITHOUT HOSPITAL BENEFITS.  “Lance Shnider is confident Obamacare regulators knew exactly what they were doing when they created an online calculator that gives a green light to new employer coverage without hospital benefits. “There’s got to be a problem with the calculator,” said Jost, a law professor at Washington and Lee University and health-benefits authority. Letting employers avoid health-law penalties by offering plans without hospital benefits “is certainly not what Congress intended,” he said. (8)

SKIN-IN-THE-GAME INSURANCE. (High Deductible Health Plans). “A report out today puts numbers behind what hit many workers when they signed up for health insurance during open enrollment last year: deductible shock. Premiums for employer-paid insurance are up 3% this year, but deductibles are up nearly 50% since 2009, the report by the Kaiser Family Foundation shows. The average deductible this year is $1,217, up from $826 five years ago. Nearly 20% of workers overall have to pay at least $2,000 before their insurance kicks in….”  (9)

OUT-OF-NETWORK EMERGENCY CARE. “When you need emergency care, chances are you aren’t going to pause to figure out whether the nearest hospital is in your health insurer’s network. Nor should you. That’s why the health law prohibits insurers from charging higher copayments or coinsurance for out-of-network emergency care. The law also prohibits plans from requiring pre-approval to visit an emergency department that is out of your provider network.  (Plans that are grandfathered under the law don’t have to abide by these provisions.)

Although the law protects patients from higher out-of-network cost sharing in the emergency room, if they’re admitted to the hospital, patients may owe out-of-network rates for the hospital stay….” (10)

GEOGRAPHLICALLY LIMITED HEALTH PLANS.  “UnitedHealthcare’s Oxford division is launching a New Jersey-only network of doctors and hospitals that will provide lower-cost health plans to employers who use the 18,000 doctors and 65 hospitals in the new Oxford Garden State Network.”

“It limits access to New Jersey-only providers and it is a solution for New Jersey employers where a smaller network offers a reduction in cost…,” (11)

DRIVE-BY DOCTORING.” In operating rooms and on hospital wards across the country, physicians and other health providers typically help one another in patient care. But in an increasingly common practice that some medical experts call drive-by doctoring, assistants, consultants and other hospital employees are charging patients or their insurers hefty fees. They may be called in when the need for them is questionable. And patients usually do not realize they have been involved or are charging until the bill arrives.” (12)

HEALTH-CARE SHARING MINISTERIES. “…… religious alternatives to enrolling in the federal insurance program in which members pool monthly payments to help cover one another’s medical expenses. So, unlike most uninsured Americans, (members of H-C SH) did not have to buy health insurance or risk a fine under the Affordable Care Act.” (13)

FEE-FOR-VALUE MODEL. “Horizon Blue Cross Blue Shield of New Jersey, the state’s largest health insurer, announced Thursday that it plans to offer new lower-priced insurance policies that offer discounts for care provided at 34 selected hospitals.” (14)

(1)    http://khn.org/news/many-patients-struggling-to-learn-the-foreign-language-of-health-insurance/

(2)    http://www.wsj.com/news/articles/SB10001424052702303448104579152111004814066

(3)    http://www.wsj.com/news/articles/SB10001424052702304547704579566401099222522

(4)    http://www.reuters.com/article/us-usa-healthcare-insurance-idUSBRE9BI04X20131219

(5)    http://content.healthaffairs.org/content/31/5/1009.abstract

(6)    https://www.washingtonpost.com/national/health-science/defining-what-defined-contributions-means-for-work-based-health-insurance/2014/05/13/a963ae06-da7e-11e3-a837-8835df6c12c4_story.html

(7)    http://www.webmd.com/health-insurance/20140807/shortterm-health-plans-might-offer-some-relief-but-they-have-significant-gaps

(8)    http://khn.org/news/employee-insurance-hospitalization-coverage/

(9)    http://doctordidyouwashyourhands.com/2015/02/employer-health-plan-deductibles-see-big-5-year-jump/

(10) http://khn.org/news/beware-of-higher-charges-if-you-go-to-an-out-of-network-emergency-room/

(11)http://www.njbiz.com/article/20140820/NJBIZ01/140829979/UnitedHealthcare’s-Oxford-starts-NJ-only-health-care-network

(12)http://www.nytimes.com/2014/09/21/us/drive-by-doctoring-surprise-medical-bills.html?_r=0

(13)http://www.nytimes.com/2014/12/26/us/for-members-of-health-ministries-in-texas-caring-means-sharing-the-bills.html?_r=0

(14)http://www.nj.com/healthfit/index.ssf/2015/09/horizon_blue_cross_forms_network_with_22_hospitals.html

 

Note: This blog shares general information about understanding and navigating the health care system. For specific medical advice about your own problems, issues and options talk to your personal physician.

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Jonathan M. Metsch, Dr.P.H. http://icahn.mssm.edu/profiles/jonathan-m-metsch

Clinical Professor, Preventive Medicine, Icahn School of Medicine at Mount Sinai

Adjunct Professor, Zicklin School of Business, Baruch College, C.U.N.Y.

Adjunct Professor, Rutgers Schools of Public Health & Public Affairs and Administration

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