My Health Insurance Experience and an Idea for the Affordable Care Act
As many of you may know from my recent blogs, I experienced “drive-by” surgery for a bilateral hernia repair. It has been about two months, which has given me time to pay the bills and to think about various aspects of the experience. Now, I would like to address health insurance.
Many have looked forward to the repeal of Obamacare, the Affordable Care Act; we could not keep our doctors or health insurance plans even if we liked them, and many of us have had a significant jump in our insurance costs. I was surprised that the opportunity to repeal and/or revise Obamacare appears to have taken the other major political party by surprise. Perhaps I can help.
So, let me tell you of my experience. I have a high deductible plan and a Health Savings Account (HSA). While doing my income tax this year, I learned that my employer, the University of Colorado, pays a little over $15 thousand per year for this health insurance. A good strategy with a high deductible plan, is to lump a lot of medical care into any plan year in which you meet the deductible; my deductible of $3000 has been met for the first time. This year will by my year to see the dermatologist as well.
My hernia repair was exceptionally simple from an accounting point of view. There were costs for services prior to the operation, like imaging and a pre-op visit, the hospital fee, and charges for the anesthesiologist and for the surgeon. They were discounted and then shared between myself and my health insurance provider.
Here they are in table form:
| Billed for: | Discount | Insurance | Patient | |
| Pre-Op Visits | $ 491 | $ 110 | $ 0 | $ 381 |
| Hospital | $ 26,385 | $ 23,644 | $ 117 | $2,624 |
| Surgeon | $ 1,508 | $ 399 | $ 942 | $ 166 |
| Anesthesiologist | $ 2,590 | $ 1,521 | $ 908 | $ 160 |
| TOTAL | $ 30,483 | $ 25,644 | $ 1,967 | $3,332 |
The thing that struck me is that the BIG value of having health insurance appears to be the discount that hospitals give to health insurance companies and their patients, not the money that insurance companies chip in toward the bill.
The total bill for my operation was about $30 thousand; after a discount of well over $25 thousand, I paid about $3000 and the insurance company paid about $2000. I used my Health Savings Account to pay my portion, so I had an additional savings of about 25% because of the tax benefits of an HSA.
Behind every societal institution is a foundational philosophy. I believe that in the US our philosophy should be that all have equal access to healthcare and health insurance.
To me, this would play out in the marketplace as hospitals, physicians, and pharmacists charging the same price to all patients. Instead, we have a system in which some patients receive heavily discounted rates while others pay a much higher price for the same healthcare simply because they do not receive the discount.
In 1960, four African American college students politely asked for service at the Woolworth’s lunch counter in Greensboro, NC. Their refusal and struggle for equal treatment is now part of the legend of the civil rights movement. Suppose they had instead been served but required to pay 5 times more than others for the food. Is that not how we are currently treating many Americans through our “affordable” healthcare system?
A bilateral hernia repair is a serious healthcare encounter, and at $5300 you might have to save up for the operation. But that’s a darned-sight better than the same operation for $30,600. And I speak with patients regularly who are asked to pay $1000 a month for their health insurance plans even though they receive little benefit until a deductible is met.
To me, this wreaks of a financial shake-down just to get to pay what hospitals and physicians accept from other patients who are more well-off.
If patients were allowed to save and pay the price that hospitals and providers regularly accept for medical services provided to insured patients, many more folks would actually have “affordable care”.
So, why don’t we adopt a national philosophy that medical care should be equally available to all.
If a hospital accepts my dollar for health care, then anyone with that same dollar gets the same amount of care. Based on my experience, this approach would provide an immediate reduction of around 75-80% in the cost of a bilateral hernia repair for someone without health insurance, and the procedure might be just a financial hardship rather than financially devastating. Even the hospital and physicians would benefit from the decrease in paperwork.
It’s time to reconsider our nation’s philosophy for health care.
Our current system has inflated the prices for those without health insurance so that insurance companies and government programs can boast the discounts that they bring to healthcare. We would all benefit from an upfront single price system for medical care and encouraging savings to cover medical expenses.
I usually suggest that you talk to your prescriber and pharmacist about things. This week, talk to them about how their lives and the care they provide to patients are affected by our current health insurance system; most are not happy with it. And consider talking up a health care philosophy and system that provides all patients equal access to health care services at a single price and allows all patients to benefit from HSAs.
