Hide your health insurance status and pay cash instead
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kevinmd.com
Worse is the case of emergencies or worry, when you have other things on your mind than shopping around and possibly spending days or weeks slogging through the internet for lists of doctor and test center phone numbers. In that case you're literally trapped into paying whatever they demand.
In either case the system is absolutely monstrous and everyone involved (except, of course, the doctors and nurses) should be ashamed of themselves.
When no one in an entire building of service provides can give you even a ballpark of what a service will cost you, there's no free market at work - at least not at the consumer/individual level.
I think shopping around, properly conceived, should be the primary care physician's job. If a doctor is referring e.g. 10 people a month to a specialist, then obviously they are going to be in a much better position to evaluate the options than a patient.
I believe that Sherpaa, Jay Parkinson's company, provides this "shopping around" service (https://sherpaa.com/).
The exception is when you have some unusual circumstance, and they try to find the world's authority on your condition.
Of course, there are many big differences between India and the US. India is mainly free market health care, unlike the US. India also has a 15-20% savings rate. And insurance is really insurance - it covers emergencies, not your monthly birth control/adderall/psychiatrist.
Me: This is outrageous, they charged me $800 to examine my shoulder and called it "external surgery".
Receptionist: Oh, let me transfer you to billing.
Billing: Oh, that is what was coded on your chart, so we billed accordingly. Let me transfer you to the doctor's staffer.
Staffer: Oh, that is what the doctor said he did, and he can't change that to say he did something else or that would be dishonest. He doesn't deal with billing at all.
Me: Arrrrrrgh.
If your primary care doctor is cool, he should be able to tell you the estimate and cash discount during the consultation.
- Employer provided healthcare is now illegal (with exceptions for the military).
- Healthcare discounts are now illegal. Insurance and cash-in-hand individuals pay exactly the same rate.
These changes would be quite painful in the short term. In fact there would be a queue of people arguing why this was a horrible idea (the "I got mine" group).
However in the long term this makes health insurance more similar to auto-insurance (car insurance).
People can actually shop around, insurers have to compete for individual's business, and if people want to forgo insurance or go with a smaller insurer (new business!) then they can.
Plus insurers and individuals will now both work together to bring hospital care costs down (they're on the same "side").
But people are too short sighted to see what a massive leap forward this would be. It is the very definition of a healthy capitalist market. But their thinking about insurance and how it "should" work is just so muddied with what has been done up until now.
Employer insurance in particular is a massive problem - due to the lock-in (both between employees and their employer's insurance company AND between the employee and employer). It really hurts innovation, startups, and growth in America today.
Healthcare discounts hurt people without insurance AND make the insurance sector uncompetitive. It is impossible to start a new insurance scheme now because you cannot get big enough discounts to be competitive.
Prices for cash-in-hand individuals would be a lot lower under this scheme.
Insurance covers the same costs cash-in-hand individuals pay, so no matter how many people do or do not have insurance the costs remain roughly the same.
I didn't realize heavy handed, unnecessary regulation bound to cause massive market distortions was "healthy" for capitalism.
Employer health insurance is the current method of distributing risk among a larger group, and any prohibition would simply be circumvented by other types of group health insurance and reimbursements.
Making discounts illegal is a ridiculous restraint on capitalism. Imagine if wholesalers and retails could not discount for marketing, loyalty, or quantity. Ridiculous.
The only thing that should be regulated is the transparency of pricing and services. Consumers simply won't accept paying 5 times the price if they are aware, but they may be willing to pay 20% more to avoid the hassle of insurance. That's "healthy capitalism" - not your complex regulatory scheme. The thought of enforcement of what you suggest is mind-boggling. Illegal to provide your employees with health insurance? Bonkers.
So the current market where two or three insurers basically control an entire state is healthier?
> Employer health insurance is the current method of distributing risk among a larger group, and any prohibition would simply be circumvented by other types of group health insurance and reimbursements.
In English?
> Making discounts illegal is a ridiculous restraint on capitalism.
So when businesses subvert capitalism that is a-ok because they are part of the system. But when the government subverts capitalism to actually make the market more competitive that is wrong?
> Imagine if wholesalers and retails could not discount for marketing, loyalty, or quantity.
A lot of wholesalers don't. They sell at a set price. Doesn't matter if you buy 50 or 5,000. They still seem to be in business.
> The only thing that should be regulated is the transparency of pricing and services.
What's the point in that when you have no choice in insurance provider?
> That's "healthy capitalism" - not your complex regulatory scheme.
A "scheme" I can describe in two lines is "complex?" Obama care was how many thousands of pages, remind me... If you cannot understand what I am suggesting then I propose that the issue isn't with my "complex" scheme but with your comprehension.
> Illegal to provide your employees with health insurance? Bonkers.
... Just like it is "bonkers" to imagine not providing them with auto-insurance, right?
And I don't mean auto-insurance for their company car. I mean auto-insurance for their private car.
It makes about as much logical sense as insuring someone's private body/person.
Based on your responses, I think you need to spend some time gaining a basic understanding of the meaning of "free market," "market distortion," and how markets develop and adapt to their environment. You seem to imply you want capitalism and free markets, yet your suggestions and reasoning is ideologically incompatible with that goal, and nothing I say or do in this forum is going to bring you to a better understanding.
This system of having no price visibility, coupled with prices being arbitrarily lower or higher for different payers, is a recipe for inefficiency, opportunism, and fraud. Anything that forces us away from that path is a long term good.
Hooray, outlaw negotiation! What could possibly go wrong with that!
I would say that now everyone gets to be part of the fight for cheaper prices rather than just the insurers as it is today.
I would dare say that a good portion of our out of control health care costs are because of government intervention, another good part is separating the end user from directly paying for it.
I would much rather a more government-backed system, where the government tallies all the automobile-related accident costs at the end of the year and foots the public the bill.
I don't really care to see the government insure expensive cars and the assets of the wealthy (expensive cars and asset protection are the big drivers of expensive insurance).
My master plan could similarly relate population density to accountability.
You have a good point about "luxury" assets (and certainly there would be many special cases like this to account for), but I'm not really talking about government insurance per se, because it's based on actual damages. If no car accidents happened in a year, nobody would pay any money.
People that carry collision are doing so because someone made it a condition of a loan or because they are worried about the cost of losing a vehicle. I don't see any reason to bring the government into those situations.
It isn't so much bringing the government in, as just using them as the non-profit middle man to tally all the car-related damage costs, then foot the bill to the public. If someone wanted to opt out and use private insurance, they would be free to do so.
Obviously this will never happen in the USA, but it would be an interesting social experiment for a smaller country perhaps.
I'm in no way willing to make that wager though...
This is pure Moral Hazard. If any cost you may incur is diluted over a pool of over 100,000,000 other people what do you care that you smash up someone elses car? Every $1,000,000 of damage costs you less than a penny. And if you put your car in a ditch the government (read: other people) will buy you a new one and you don't pay a dime...
Edit: not to mention the health risks of purposely smashing up your car :)
I think I trust the Time article a lot more than this linkbait.
[1] http://healthland.time.com/2013/02/20/bitter-pill-why-medica...
I have only once come across a physician that didn't take any kind of insurance, but know from other anecdotes that it is becoming more prevalent.
I also had an experience recently where I went to a specialty provider that didn't accept my insurance, so it was handled as out-of-network. However, they billed me only what I would have paid had it been an in-network provider, which was considerably less.
Before I had insurance I was getting ~$1200 quotes for procedures. Paying up-front would get that knocked down to ~$1000. Paying cash would get it knocked down to ~$800.
After I had insurance, the claims statements showed the insurance company's negotiated rate at ~$400 for the same exact procedure.
If I let the up-front bills go to collections, the due amounts would drop massively from that $800. But that's not a sustainably advantageous strategy. And even then it's not going to be appreciably better than even paying cash at the insurance company's negotiated rate.
[1] In which case, you really aren't a person who should have a capped medical plan. It's always going to cost you more to carry such a 'cheap' plan. Even if out-of-pocket payments are cheaper than going through your insurance plan and paying the difference. You'd be better off paying more up-front and getting proper coverage, if at all possible.
The hospital only charged me about 40% of the full bill, due to my "hardship" of being unemployed. Still, it was $1200 for nothing a little weed and a gallon of Gatorade wouldn't do. Most of the bill was to have a doctor walk in the room, make a few jokes at me, and leave. If I knew I'd be paying for a standup routine, I would have preferred to go see Louis C.K. and saved $1100.
I still haven't bought health insurance, which is certainly a gamble, but so is buying health insurance. When you buy health insurance, you're betting against the insurance company that you're going to put less money into insurance premiums than you're going to get out as benefits. In the last 2 and a half years of not having health insurance, that one ER trip is the only medical need I've had. In the end, $1200 was a lot less than I would have paid in premiums. So far, I'm winning my gamble.
In the specific case of cancer, I'm not sure the treatment is worth it. I've seen a lot of people go through really awful treatments that ruined the quality of their last few months/years, only to die anyway. I don't want to put my families through the emotional and financial burden of that. I've personally never seen any insurance that fully covered someone's cancer treatment.
In the end, cancer always gets you. You could do everything to try to prevent every other cause of death, but cancer will always eventually get you. That's a big part of why I'm working on the things I care about now, rather than waiting for some nebulous "future" when I have "enough money". That future may never come.
These folks are working to provide an easy directory where you can look up all the doctors in your area and get their pricing for services on a cash basis.
It's interesting watching as the industry goes through these undulations trying to sort itself out.
(Disclaimer: I know the folks working on it, so if you have any comments/questions/concerns I'd love to pass them on.)
Medical billing is so screwed up. I walk in and pay up front and it still somehow counts as a write off. A write off for what I am not sure, I am supposedly paying list price. I assume they really jack up the prices, have a pool for "uninsured" (regardless of merit) and then mark down from there to get a nice tax benefit because they gave a lot of "charity" care. I'd consider the $135 I paid for a < 10 minute visit to be more than ample compensation, whatever they're getting for the $90 write off should be fraud.
(From http://en.wikipedia.org/wiki/Health_savings_account): "There is no deadline for self-reimbursements of qualified medical expenses. High-income individuals can take advantage of this by paying for medical costs out of pocket, retaining receipts and allowing their accounts to grow tax-free. Money can then be withdrawn years later for any reason, up to the value of the receipts. [23]"
I find any article that doesn't mention the word "allowable" completely disingenuous.
The article does not account for the difficulty of shopping around. If you have the time to travel then it's possible, but often medical care has some urgency so you need to use the closest service provider.
If this really is a trend then the best result would be for people to start taking out catastrophic health insurance. The idea is that they would be insured for very large and very unusual events and cover the routine payments by paying cash.
As would taxing it no matter who pays.
I can't see any good reason why health insurance should be tax deductible - it's a private good with minimal external benefits.
Say you're a parent. You have a house and three kids. Your spouse makes alot less than you do. Then you get afflicted with a chronic disease like MS.
Without healthcare, you eventually cannot perform at work and get fired or laid off. You have some sort of episode, and end up in the ER. You can't pay your mortgage, and you cannot replace your income. So you stop paying the mortgage and go on food stamps. Then your house gets foreclosed.
Next, your spouse leaves you and takes the kids. You're indigent, your kids are now on Medicaid (at taxpayer expense) and getting assistance for housing. You're behind on child support because your disability case was rejected and your appealing it.
If you add up the costs, you'll find that the cost of providing deductiblity is lower than the costs of all of the other outcomes. Actually, a year of healthcare probably costs less than that 1 ER visit.
Also, corporate write-offs for health insurance benefits has nothing to do with what happens to your healthcare when you get laid off. If anything not having it be deductible would help because then you're insurance has no reason to be tied to your employment so you could just pay for it yourself like you do anything else.
What would fix your scenario is universal healthcare.
[Insert rest of your sad story here.]
Therefore, purchasing pants should be tax deductible.
This page (which was the first Google result) disagrees. http://taxes.about.com/od/deductionscredits/qt/healthinsuran...
If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction. People working for "the man" don't get this luxury.
Not entirely true. If you're employed by an S corporation you own, the S corporation is the employer, not you, but you can take the deduction.
The bigger issue is people generally are accustomed to larger/bigger plan coverage from employers, and employers contribute a portion, skewing the 'real' price.
High deductible policies help A LOT, but I fear those are going to be harder to use under Obamacare (for seemingly ridiculous reasons). We're paying $330/month for a high deductible policy with $5k deductible. Would be close to $250/month for a $10k I think. And, I think, that's likely how it should be, vs paying $800-$1000/month for a plan with a low (or no!) deductible.
I've had friends say "well, I don't have $10k just sitting around in case there's a medical bill!" A few rebuttals to that mentality:
1. Some of these same people have no issues with financing new cars every few years.
2. You'd have $10k in savings much faster if you were only paying $400/month instead of $1400/month for insurance.
3. We had a big issue a couple years ago, and had an emergency room visit. That was January - we didn't get a bill until April, and it had a number to call to work out a payment plan - you can finance your emergency medical expenses.
I realize these numbers don't work out for everyone in all cases, but neither does employer-provided health care.
That does not square with this[1]: If you are not self-employed, and you don't work for a company that provides health insurance with a cafeteria plan, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that has to be spent on health care before any out-of-pocket medical expenses can be deducted.
[1]http://healthinsurance.about.com/b/2010/01/25/are-my-health-...
Without this capability, shopping around for healthcare is absolutely impossible. How can you shop around when the prices aren't publically listed and aren't known by the staff/physicians?
This article, by the way, is terrible. He gives horrifically bad advice, acting as if the majority of clinics/hospitals actually discount costs for the uninsured. THEY DON'T, as the vastly better researched article "The Bitter Pill" from Time Magazine last week clearly illustrated.
I've been a consumer asking for prices as part of a HSA high deductible health plan before. There is no mechanism to support shopping around at all, and the clinics/hospitals still act on a zero price transparency model. See the "chargemasters" discussed in the Time article. They are databases of prices which are not at all publically accessible.
The federal gov't should step in, and, at a minimum, force hospitals/clinics to make their chargemaster databases publically accessible. This would be a game changer for consumers in health care.
I mean, when the insurance company negotiates to pay higher prices, they are lying to overstate their benefit and justify higher prices. Hospitals are complicit in this scheme. But hospitals make more from higher margins, and insurance companies can justify greater prices.
It's a broken system when both buyer and seller want to negotiate the highest price they can in secret, away from the person who is funding the buyer.
Healthcare expenses are deductible, but only those that exceed 7.5% of your AGI. So if you are a software developer making $100K a year at a start up with crappy health insurance, you can start deducting expenses once they exceed about $7500, depending on your tax situation. Of course, health premiums deducted pre-tax from your paycheck are not deductible at all.
Also, the reason you can't deduct the "pre-tax" premiums is because you were never taxed on them in the first place.
[snip]
If you tell them you have insurance, they will be bound to charge you the insurance company’s negotiated rate. Those are the up to 89% higher fees documented in the previous paragraph."""
2400 is 860% higher than 250, not 89% higher.