The Risks of High Deductible Plans

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We have provided past guidance to healthcare consumers regarding the financial risks associated with high deductible health plans. These health plans were intended to be paired with health savings accounts (HSAs) which would allow the consumer to save money on a pre-tax basis to pay for their annual healthcare out-of-pocket costs.

Unfortunately, only a small fraction of consumers with high deductible plans actually has an HSA. In a recent post, we have highlighted recent data that showed the buildup of $88 billion in medical debt. The link below documents the result of this situation by indicating that the majority (58%) of hospital bad debt now relates to the out-of-pocket costs of insured patients. This confirms that many healthcare consumers are selecting the wrong health plan for their circumstances.

https://www.healthcarefinancenews.com/news/high-out-pocket-costs-are-negatively-affecting-revenue-cycles#.Yw-iWN_h53U.linkedin

Did you know that Medicare Drug Supplemental Insurance plans can raise your drug prices within a month after you have already selected and locked in your plan for the upcoming year?  

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NPR, just highlighted in their article “Drug plan prices touted during Medicare open enrollment can rise within a month” that consumers of Medicare Drug Supplemental Insurance (Part D) Plans have to select their plans in December for the next calendar year; yet the pricing for many commonly used drugs can increase as early as the following January.  This situation makes it impossible to have any confidence in the health plans pricing information, or ultimately how much the consumer will pay out of pocket for their prescriptions.  

And, unfortunately this scenario isn’t isolated to Medicare.  This is true of any health insurance plan.  Drug companies, insurance companies, and pharmacy benefit managers are in constant negotiation with drug pricing and individual prices can fluctuate without notice.  However, the insured is not able to change plans based on these fluctuations because they have signed a contract for their premium rates.  

It is an incredibly frustrating situation that many Americans find themselves in, and the problem is growing. 


At Health Care Big Ideas, we want to empower you to become a more savvy consumer of healthcare.  Check out our FREE GUIDE to learn how to make smart healthcare decisions and financial decisions. 

The Consumer Financial Protection Bureau Targets Medical Billing: Yet Another Resource For Healthcare Consumers

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The Consumer Financial Protection Bureau (CFPB) recently issued a report entitled “Medical Debt Burden in the U.S.” which indicates that approximately 20% of American households have an estimated $88 billion in medical debt.  This medical debt appears on approximately 43 million credit reports and represents 58% of all consumer debt in collections agencies.

 

The CFPB’s study found that when medical debt is included in credit reports, consumers have reduced credit access and a higher risk of bankruptcy.  It can also negatively affect their ability to get a job and access future medical care.  This is especially acute in marginalized populations.

 

The CFPB is challenging the appropriateness of medical debt even being included in credit reports.  The CFPB charges that the current fee-for-service billing system is comprised of complicated insurance coverage rules; and subject to opaque pricing and common billing errors.  This action is both good news to healthcare consumers and bad news to medical providers stuck in the quagmire that is the fee-for-service billing system. 

 

Healthcarebigideas.com Empower Bundle describes many of the scenarios where large medical bills can arise and provides you with the resources to better understand your medical bills and resolve your outstanding medical debt. The CFPB is yet another resource for healthcare consumers to turn to for assistance when addressing their medical debt.

The High Costs Of COVID-19: Does The Right To Healthcare Also Come With Responsibility?

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A Harvard study estimated the total financial losses due to the pandemic at $16 trillion[1]. Health losses made up over half of the total including $4.375 trillion from premature death; $2.572 trillion from long term health impairment; and $1.581 trillion from mental health impairment.

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Heroes And Villains: Healthcare Price Transparency Issue Reaches CBS’s 60 Minutes

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If Mr. Becerra is confirmed as the next Secretary of Health and Human Services, it is likely that the issue of healthcare pricing regulation will be high on his agenda. Healthcare leaders could be viewed by the public as “heroes” instead of “villains” by addressing this issue before that occurs.

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A Mom’s Perspective: A Surprise Medical Billing For COVID-19 Tests

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In this day and age, my account in their system includes all of my insurance information. I don’t understand 1) how they could not have already known about this problem; 2) when they are inputting the test into their system, why it doesn’t alert them to an out-of-network laboratory; and 3) why they didn’t provide me with that information, so I could decide whether or not to go ahead with the tests.

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A Mom’s Perspective On Price Transparency: How Much Is This Going To Cost?

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The healthcare industry needs us just as much as we need them. As healthcare consumers have more control than we ever thought possible. We can take back control and demand the transparency of healthcare prices.

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The Affordable Care Act Decision: Can Common Sense Prevail In The Midst of Political Chaos?

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However, to borrow from Ruth Bader Ginsberg’s last communication with her granddaughter, it is our “fervent wish” that the Supreme Court will apply basic common sense and will take into account the stated intent of Congress when they make their decision regarding the ACA’s fate. In our view, although it is far from perfect, the ACA has played a central role over the past decade.

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The Beginning Of The End Of Fee-For-Service Medicine: Chapter 2 – Price Transparency Is Here To Stay

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Value-based pricing and vertical integration of insurers and providers may be the models of the future. But the bridge to getting there is long and needs to provide a “soft landing” for the healthcare industry. The first step in building that bridge is fee-for-service price redesign and transparency. The technology exists to provide better fee-for-service price transparency, simpler pricing models and more alignment of price to the cost of service.

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The Beginning of the End of Fee-for-Service Medicine

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If ever there was a time for a new healthcare payment paradigm, the time is now. Healthcare providers can no longer rely upon an outdated fee-for-service payment model to provide long term financial health for their organizations. They need to consider an immediate redesign their operating revenue portfolios to (1) better align their fee-for-service prices with actual cost; (2) convert more of their physician services to managed risk and value-based care arrangements; and (3) consider strategic alignments or potential mergers with health insurers of scale in their markets.

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The "New Normal" Medicaid: A Viable Public Option Alternative to Medicare-for-All

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All this likely points to renewed arguments that a Medicare-for-All single payer government healthcare system would be a potential solution to this new normal scenario. We do not support that plan for all the reasons described above. However, we are convinced that the current crisis will require some type of public option alternative going forward. We believe that the New Normal Medicaid program we described last month could be utilized as one model for this type of public option alternative.

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The “New Normal” Medicaid: A Practical Approach for State & Local Government Relief

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Our practical solution and rationale, outlined below, proposes to mirror the Medicare funding model by transferring all Medicaid funding responsibility to the federal government. This bold action, which is in keeping with much of the government’s virus response, better positions the U.S. healthcare safety net to perform its critical task in this crisis and its aftermath.  If it is to care for us, we must first care for it.

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