The Affordable Alternative to Traditional Individual Health Insurance

As a way to begin let’s define what I mean by traditional health insurance. The traditional health insurance policy is composed of:

The deductible – This is the amount that you have to pay for a medical event before your health insurance will start to pay. In today’s world that deductible is often $3000 or more.

The coinsurance – After the deductible is met most policies require that the insured pay a percentage of all medical costs up to a maximum. Usually the insured pays anywhere from 20% to as much as 50% of every dollar billed.

The copays – In an attempt to make routine health care accessible many policies include a copay for doctor visits and prescriptions in lieu of having to meet a deductible. An example of this is the $10 office visit copay.

Maximum Out-Of-Pocket Costs – This is the most that an insured can expect to pay regardless of how large the medical bills are. As a general rule the maximum out-of-pocket costs for an individual are limited to around $7000. This can be a very misleading number because it assumes that all of your providers are in your network. If they are out of network your costs can be significantly higher.

And finally the “Network” – Virtually every traditional individual health insurance policy is tied to a network of providers. The narrower the healthcare network, the lower the premium. There is too much wrong with “networks” for this article. Suffice it to say that “networks” are the enemy of the healthcare consumer (you).

The Problem Facing Working Americans

The problem is simple: health insurance premiums are too high for most working Americans in the absence of a subsidy and when combined with extremely high deductible and out of pocket costs, healthcare becomes unaffordable. Let’s look at a couple of examples right here in North Carolina.

A non-smoking couple ages 62 and 63 find that their lowest premium option with BCBS of NC is $1999 a month for a $13,300 family deductible with no copays. A plan with a $7000 deductible and $25 office visit copays would cost $2682 per month.

Assuming the least expensive plan the annual cost would be $23,988 annually. And if either person had a medical event such as cancer, the actual cost for healthcare would be $37,288. You have to ask: “Why even have health insurance?”

A non-smoking 30 year old couple found that the least expensive plan would cost $787.84 a month for a $13,300 family deductible with no copays. The least expensive plan that included copays was $1056.88 but had a $7000 deductible and the most restrictive network. Assuming the least expensive plan, should either member of this young couple have a medical event their total annual cost (deductible + premium) would be $16,454.08. That is a devastating amount of money for a young couple.

The simple solution to this problem is a Fixed Benefit Health Insurance. Unlike a major medical policy where the policy pays for all eligible expenses after the deductible and out-of-pocket maximum, a Fixed Benefit Health Insurance Policy states exactly how much will be paid for each specified service. Examples of specified services might include: daily benefit for in-hospital stay of 24 hours, specific dollar benefits for specified surgeries, a specific benefit for doctor visits and other specified charges. A great Fixed Benefit Health Insurance Policy will have very robust benefits, a wide range of specified covered charges, a very comprehensive surgical schedule and more. The most important service that Fixed Benefit Health Insurance Policy can include is medical bill negotiation, a service that can significantly reduce out-of-pocket expenses.

What is really great about this type of policy is that empowers the insured to be a better consumer. Knowing how much your policy will pay you for a specified medical service allows you to better shop and negotiate the price. But the really great thing about this policy is the affordable premium.

The couple ages 62 and 63 are an actual client of mine who had been uninsured for 5 years as a result of the high premiums. I was able to put them into a robust Fixed Benefit Health Insurance Policy with a $5,000,000 lifetime benefit for $683 a month. That is an annual savings of $15,792. As I explained to my client the Fixed Benefit Health Insurance Policy will do a great job of covering 70% to 80% of everything that can happen. If they actually saved the $15,792 difference in premium they would have incredible access to healthcare with very little out of their own pocket.

Back in 2014 I was diagnosed with colon cancer and had a partial removal of large intestine (CP44205). Back then I was covered on a traditional major medical policy. My total out-of-pocket costs were more than $7000. Had I had the Fixed Benefit Plan that I sell today not only would my costs have been zero but I would have received a check from the insurance company for $4619. Not every medical event would have resulted in a check and many might have resulted in out-of-pocket costs of several thousand dollars, but in general the savings would have more than offset those costs.

So, before you choose to go without any health insurance I strongly suggest that you take a hard look at a Fixed Benefit Health Insurance Policy.

Do Your Homework to Minimize Denied Health Claims

A patient balance was turned over because of continued non-payment. The patient disputed she owed the balance. The provider resubmitted the bill to the insurance and still received a denial. The following particulars of the patient’s benefit plan led to the denial:

  • She needed a preauthorization prior to the service based on the codes/modifiers submitted.
  • The service provided was classified under non-emergency care based on the chart documentation which led to a preauthorization requirement.
  • The provider was not contracted with the insurance company, meaning they did not have to accept their allowable of the charge as payment in full and could bill the patient for the entire non-covered balance of over $ 1,500.00.

As you can imagine, the patient was extremely upset. She stated it was an emergency and she experienced a lot of pain. Had she known all of the above, she would have selected an alternate service. She also felt the provider should have told her all this because it was their responsibility. She paid a lot of money to the insurance company only to receive this unfair treatment.

Six Areas for Patients to Know About

No matter what the healthcare coverage, you must take it upon yourself to know the specifics of your plan’s coverage and it is your responsibility to do so. Otherwise, you may end up with a situation like the above. If you are unsure of coverage or verbiage, ask for details. Remember, too, insurance companies also may deny charges in error. If you disagree with a health insurance decision, you have the right to appeal. Be sure to follow your insurance plans appeal process for a timely response.

Here are six areas to check prior to medical service:

  • Payment points such as co-pays, co-insurance, deductibles and percent of coverage owed after deductibles are met. There is a vast difference between amounts owed for an in network vs. out of network provider. Patients new to insurance coverage usually do not know the difference.
  • Where to go to navigate health plan information.
  • Member resources.
  • How to stay in network.
  • Out of network payments.
  • Preventative services covered.

Where can you find this information?

  • Websites: All health plans usually feature very extensive websites that are becoming increasingly more sophisticated. For example, the United Healthcare site contains lists of prices, providers by zip codes and even whether the provider is accepting new patients. Some information might be a little outdated but it’s a start.
  • Documentation: Generally, by the first of the year, healthcare plans mail out information on the changes to the coming year’s insurance. It’s easy to find deductibles, co-pays and other information via these documents.
  • Telephone: Call the number on your healthcare card. Be sure you obtain a reference (tracking) number for the call.

Because you bear a larger cost burden for your healthcare costs, digging into this information is a must to know the difference between a preventable patient balance and one you actually owe – before the bill arrives.