Contributor’s Corner: Making Healthcare Insurance Decisions Today

The Times They Are A-Changing*

[*Song Written by Bob Dylan, 1963.]

 

All too often my professional and personal life values collide. This was especially true more recently when it came to choosing a health plan. When you cross the Rubicon—in this case—at age 65, some amazing things happen: one in particular–Medicare. Suddenly everyone wanted my business. And for good reason! It’s a payer that pays quickly with rates that (when compared to other payers) aren’t too bad. However, never did I think I’d sign up for a Medicare Advantage (MA) plan. But I did. Why? $50.00 a month in premium was a whole lot better than the $800+ I was paying monthly before the crossing. And also better than the $500+ plan I might have purchased on the healthcare Exchange for a platinum plan if under 65 years of age.

My negative predisposition centered on my professional experience watching my hospital clients and industry reports of how poorly MA plans paid claims—especially delaying payments. But when faced with the economic value of the monthly premium, being able to have a PPO (preferred provider organization) of physicians and hospitals to choose from that meet my in- and out-of-network choices, it became a no-brainer.

The other choice was to select a Medicare supplemental policy; the best of which appeared to be the plans offered by AARP. In contrast, there were no networks at all to be concerned with, and the supplemental plan would pay all of the deductibles, copayments and coinsurances associated with Medicare (Parts A&B)—if you selected the most expensive option. Still a good buy, if your out-of-pocket (OOP) costs under an MA plan were to approach the maximums offered by those plans. It seemed a better bet to pay lower premiums with a known OOP limit if you were not likely to approach those limits, rather than paying supplemental premiums as a defined monthly cost.

There is truth to the old adage: “If it’s too good to be true…..” The MA premium increase for 2015 is going up to $71.00 month; quite a jump—but probably still a good buy. I still need to check the payer directory to be certain my key providers are still in-network. If they are not, then it’ll be time to reevaluate the value proposition.

Speaking of networks, there are now concerns that Exchange based plans are going to be further restricting their networks. After so many years of emphasizing the need to have consumers more involved in their healthcare decision-making in order to make better choices, as an industry, we now seem more willing to restrict choices. If there is anything the industry should have learned is these decisions aren’t based solely on price. It’s the same as with living in a representative democracy. We elect representatives who then vote (we hope) in our best interest. When we choose a physician, we place that same trust that when they recommend a procedure or hospitalization, it will be the best for the patient—not just based on cost. Of course, if you have a 20 percent coinsurance responsibility, then a $4,000 procedure that might be available for $3,000 represents a $200 savings/cost to the patient—all other factors being equal. Then again, who said there was any logic to our pricing model. While the payers insist that they have selected their networks based on quality, as industry insiders, we often know that means payer network providers are less costly—not always of the same quality.

Industry reports suggest that many previously uninsured patients are now gaining access to coverage through state or federal Exchanges. That’s the good news. Although with many selecting bronze level plans or those with very high deductibles, there may be surprises individuals receive, especially those entering the healthcare system for the first time as insured. Anyone who has had an automobile repaired after a collision knows that the OOP costs—usually a policy’s deductible (which can vary from $250-$1,000) can be a surprise—even when you have insurance. [Note: You stand a better chance having the same collision estimate done by two different examiners than having the same price quoted for a medical procedure by two different providers. It’s standardized pricing guidelines that most automobile insurers and collision shops seem to use.]

We’ve also begun seeing hospitals scaling back on financial assistance (charity care) by now making it a prerequisite that patients who may be eligible for Exchange based plans need to apply for them, rather than electively remaining uninsured. This may have a boomerang effect, having recently heard of a story of an individual who went on to an exchange plan that no longer had a particular doctor/hospital in its network necessitating a change in both for the patient, so that a followup hospitalization procedure would be covered. Be careful what you wish for!

We’ve all seen the Geico commercials where you can save 15 percent on your car insurance. Medicare patients will similarly see advertisements offering more from various MA plans. But not surprisingly, healthcare insurance exchange advertisements aren’t as prevalent. No one seems to be saving those individuals “15 percent” or offering something special. The more educated the population becomes, the more powerful their purchasing power will become. Instead of: Caveat Emptor—Let the Buyer Beware; perhaps one day, we could get to: “Let the Payer Beware.” Then the times will really be a-changing.

 

 Allan P. DeKaye, MBA, FHFMA, is President and CEO, DEKAYE Consulting, Inc., a revenue cycle healthcare firm. He is also a member of the Health Law Editorial Advisory Board for Wolters Kluwer Law and Business. Mr. DeKaye is author/editor of The Patient Accounts Management Handbook. He is working on a second book, My Medical Bills Are Killing Me © What Americans Need to Know About Health Insurance.