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Shamelessly Uninsured Self-Pay Patients Pay Themselves

July 28, 2016

Consumer Power Report #513

Doctor with credit card

So a man walks his wife up to the receptionist’s desk at a surgery center to check her in for a minor invasive procedure. A smiling twenty-something woman in purple scrubs greets them. She chirps a handful of questions to make sure the wife’s file is current. As she scrolls down on her oversized computer monitor to verify the wife’s insurance information, the couple waits for the penny to drop.

And there it is.

“But … it says here you’re self-pay,” the receptionist says, her smile gone.

“And we are,” the man says.

“But you need to pay $1,500.”

“And here is our credit card.”

The receptionist reaches for the embossed plastic rectangle the man is sliding across her desk. She holds the card in both hands, contemplating it before running it through her machine. She appears bewildered. Probably she does not realize she just earned her employers easy, and maybe extra, cash.

Receipt in hand, my wife and I walked off to surgery prep, pleased to have paid our provider for health care and not one dime to an insurance company. We belong to a growing minority of American patients who not only lack health insurance--we like lacking it, and we like the health care we buy, too.

The receptionist, however, belongs to the dwindling majority of American health care professionals, patients, elected officials, and appointed bureaucrats who have been conditioned to conflate health care and health insurance.

A world, and worldview, of difference separates the two.

Many people and governments of the Ideally Insured worldview erroneously consider health insurance the sine qua non of health care--the payment method “without which not” a single red-blooded American can get so much as a blood test, except by incurring obscene expenses for himself, his provider, taxpayers, or all three.

Surely patients who go uninsured, according to this worldview, fall somewhere on the caste system below the Ideally Insured Patient (may he live forever, etc.). Lower rungs of this caste include the uber rich, the indigent, and lawless bandits who don’t know or don’t care President Barack Obama signed the Affordable Care Act into law six years ago.

By contrast, self-pay patients of the Unconcernedly Uninsured worldview know the truth, and the truth is setting them and their health care providers free.

Although self-paying requires a modicum of cash flow and short-term savings, self-pay patients need not be rich. They can and frequently are poor, or close to it, by federal poverty guidelines. And the self-payers we know are aware enough of ACA’s mandates to factor its penalties and exceptions into their cost-benefit analysis.

These self-payers’ analysis weighs the cost of insurance premiums and deductibles--which have increased dramatically in dozens of states since ACA’s implementation--against their unlikely prospect of maxing out their deductible in a given year. Whoever does not max out their deductible may as well be paying cash, because insurers won’t be reimbursing them.

In fact, patients who don’t max out their deductibles would do far better for themselves and their doctors by paying cash straight up. Providers typically charge 20 to 50 percent less when they can get paid immediately and without funneling payment through a third-party health insurer. That’s not charity. It’s savvy.

Physicians and surgeons set their prices to cover all costs related to patient care, including the time and labor spent processing insurance claims to make sure insurers pay what patients do not. Sometimes insurers compensate these doctors months after service was rendered. Cutting out the middle-man insurer is saving providers so much time and money that more are ditching the insurance model to run cash practices and offer patients direct-pay membership agreements.

Consider the $1,500 the happy couple (my wife and I) paid. This amount was the second of three prices the provider quoted us: $2,250 if billed through insurance, or $1,500 paid the day of service, or $550 paid the day of service plus $1,700 through an indefinite payment plan.

Our bet, in hindsight: The office recovered its costs and maybe a modest profit with the first $550 we paid--the bare minimum payment, presumably for a poor patient unlikely to pay the rest (hence the payment plan with no deadline). The next $950--which we also paid same day--was gravy for the practice. Had we paid through insurance, the practice would have banked the gravy plus some of an additional $750 after administrative labor costs, possible claim disputes, and haggling. (I love a good fight.)

Looking back, and assuming we’re right about the three quoted charges, our only regret despite getting a $750 discount is failing to claw back even more of that gravy, due to our being fairly green self-payers then. This would have fattened not only our own wallets, but the purse of the health care sharing ministry (HCSM) that reimbursed us for $1,200 of the $1,500 we paid. Better yet, our HCSM financially incentivizes us to seek documented discounts, so we could have made bank.

That’s not charity either. It’s just how self-pay patients do business.

-- Michael T. Hamilton


IN THIS ISSUE:


SUCCESS OF PENCE’S MEDICAID EXPANSION FAR FROM SETTLED

The success of the conservative approach to Medicaid devised by Indiana Gov. Mike Pence--Donald Trump’s pick for vice president--is a mixed bag so far, according to a report that offers fodder for both sides of the political spectrum.

A new analysis funded by the state shows both positive and concerning elements to Indiana’s alternative Medicaid expansion. It again exposes the dichotomy of Pence embracing President Barack Obama’s healthcare reform law even though his presidential running mate, Donald Trump, has called for full repeal of the Affordable Care Act.

The report also comes as Indiana state officials continue to raise objections to the CMS performing its own analysis to see if Pence’s Medicaid expansion has been harmful to beneficiaries. Pence has argued there is no need for the agency to perform its own evaluation because the state already commissioned a report by the Lewin Group, an independent consultancy.

Pence’s version of Medicaid expansion took effect last year. His Healthy Indiana Plan 2.0--which includes premium contributions, health savings accounts, incentives for healthy behaviors and a benefit lockout for people who don’t pay premiums--has become a model for conservative Republican governors in other states such as Kentucky and Ohio.

More than 90% of HIP 2.0 beneficiaries have been able to continue to make contributions into an HSA as a condition of coverage, according to the report. Payments range from $3 to $25 a month depending on income level.

But almost half of Medicaid enrollees sometimes, usually or always worried about being able to make those HSA contributions.

People living below the federal poverty level who don’t pay into the HSA will still have basic Medicaid coverage, but will lose dental and vision benefits, according to Indiana’s waiver.

People living above the poverty level who miss HSA payments are locked out of coverage for six months. …

SOURCE: Virgil Dickson, Modern Healthcare


43 STATES FAIL TO MAKE HEALTH CARE PRICE INFORMATION AVAILABLE

There are 43 states that fail to adequately make healthcare price information available to consumers despite pressure from employers and policymakers for greater transparency, a new analysis shows.

Just six states earn a passing grade of a C or better and a seventh state gets a D when it comes to price transparency, according to the latest analysis from the nonprofit Health Care Incentives Improvement Institute and Catalyst for Payment Reform.

The annual “Report Card on State Price Transparency Laws” is important because millions more Americans have coverage thanks to the Affordable Care Act. But those obtaining this new coverage as well as those who have long had insurance are seeing their out-of-pocket costs rise, and they need better information on what the true cost of healthcare is.

In addition, it’s important for states to provide price information because consumers don’t trust insurers to provide it, the study’s authors say. “For many consumers, the trustworthiness of information that emanates form health plans isn’t very high,” François de Brantes, executive director of the Institute, known as “HCI3,” said in an interview.

Information about price information is becoming more important as employers shift more costs onto workers, generally in the form of higher co-payments and deductibles. Thus, the lack of transparent price information means consumers still don’t know what the real cost of healthcare is when they pay out of pocket for more care.

Though an increasing number of states are working on legislation when it comes to price transparency because more have laws on the books, that doesn’t mean the information is available.

The states that received an “A” do so because they provide “detailed pricing on a variety of procedures through easy-to-use public websites, backed by rich data sources,” the groups said. …

SOURCE: Bruce Jaspen, Forbes


Idaho Lawmakers Get Full Health Insurance Benefits Despite 3-Month Session

Amid the Idaho Legislature’s latest discussion on how the state will address health care needs of the working poor, a reader wrote to ask: What health benefits do state lawmakers receive? Here are the vitals:

Lawmakers are eligible for the same benefits package available to all state employees. Though Idaho’s 105 legislators technically serve part-time, they are considered full-time employees for purposes of insurance and retirement benefits. The state group health plan is held by Blue Cross of Idaho. See the rate schedule at IdahoStatesman.com.

The state’s health care contribution per full-time employee, including a 9 percent increase that kicked in this month with the new fiscal year, is $12,240 a year -- $1,020 a month. … So what do they pay? Per the rate schedule, the total premium for a married employee with one child ranges from $126 to $181 a month depending on the type of plan and deductible, or $1,452 to $2,172 annually. …

State Sen. Dan Schmidt, D-Moscow, turned the spotlight on the subject of legislator health care in March. To protest the Legislature’s lack of action on better health care options for the poor, Schmidt announced that he would give up his state coverage until lawmakers addressed the issue. He said he and his wife would obtain coverage on the Obamacare-created state insurance exchange.

But as Schmidt subsequently learned, people who refuse workplace coverage aren’t eligible for health plans on the exchange. As a result, Schmidt has no coverage. Further, under Obamacare, those who go without insurance are subject to a tax penalty.

SOURCE: Bill Dentzer, Idaho Statesman


10 STATES JOIN FEDS’ LAWSUIT TO BLOCK HEALTH INSURANCE MEGA-MERGERS

… The long-anticipated move by the Justice Department and attorneys general in 10 states will at least temporarily prevent Anthem Inc.’s purchase of Cigna Corp., a combination that would have created the nation’s largest health insurer.

And it will stop Aetna Inc.’s bid to acquire Humana Inc., a merger that would have combined the nation’s third and fifth biggest health plans.

“Competitive insurance markets are essential to providing Americans the affordable and high-quality health care they deserve,” Attorney General Loretta E. Lynch said Thursday after the suits were filed in federal district court in Washington.

“These mergers would restrict competition for health insurance products sold in markets across the country and would give tremendous power over the nation’s health insurance industry to just three large companies,” she said. “Our actions seek to preserve competition that keeps premiums down and drives insurers to collaborate with doctors and hospitals to provide better health care for all Americans.”…

In a joint statement Thursday, Aetna and Humana said they would “vigorously defend” their deal.

“A combined company is in the best interest of consumers, particularly seniors seeking affordable, high-quality Medicare Advantage plans,” the companies said. …

SOURCE: Noam N. Levey and Jim Puzzanghera, Governing


BLUE CROSS BLUE SHIELD OF MICHIGAN EXPANDS PLAN OFFERINGS WITH NEW PPO COORDINATED CARE SYSTEM

Blue Cross Blue Shield of Michigan has launched Michigan’s first Organized Systems of Care-based health plan -- Blue Cross Personal Choice PPO.

Organized Systems of Care are communities of doctors and hospitals within the Blue Cross PPO network that collaborate to provide customized, coordinated patient care.

Blue Cross Personal Choice PPO offers small and mid-sized businesses a product that lowers health care costs by delivering coordinated quality care to members.

“Blue Cross is at the forefront of health care innovation by providing our customers one of the nation’s largest OSC- and value-based health plans,” said Dr. David Share, senior vice president of Value Partnerships at Blue Cross Blue Shield of Michigan.

The OSC model provides mutual accountability for performance and cost among primary care physicians and specialists. It helps to connect members to a designated primary care physician and a community of care, which improves quality and lower costs by managing population health.

Blue Cross’ newest health plan provides access to 38 OSCs throughout Michigan, offering members the ability to choose from more than 4,300 primary care doctors, 11,630 specialists and 118 hospitals.

The Personal Choice PPO plan divides OSCs into two levels to ensure quality of care and lower costs. By selecting primary care doctors and providers in Level One OSCs, members have lower copays and deductibles. Opting for doctors and providers outside the Level One OSCs provide high quality, coordinated care but at a higher cost to the member. …

SOURCE: Alyssa Sturm, Oakland Press Business

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Health Care
Author
Michael Hamilton writes and edits for the liberty-minded clients of Good Comma Editing, LLC, a freelance writing and editing company.
media@heartland.org @MikeFreeMarket