How to Bring the Big Health Insurers to Their Knees
Now that the midterm elections have passed, it’s time for Americans’ favorite fall pastime: shopping for health insurance. It’s open enrollment time for the Affordable Care Act. By now almost everyone scoffs at the term “affordable care” because health insurance is no longer affordable and care seems to be lacking as patients have to compete with computers for their doctors’ attention.
There was a time when doctors knew their patients more intimately. From grandparents’ ailments to children’s checkups, the same physician was there for the bulk of a family’s life. And the family paid this doctor directly, be it in cash or on the barter system—chickens, pigs, cakes, what have you. There were no copays. The doctor managed his own offices, typically with a competent nurse and possibly an additional assistant to help schedule appointments.
But with the proliferation of managed care in the late ’80s, patients as well as doctors have slowly ceded control over their health care to insurance companies. For years now, this reality has been accepted because the changes were implemented subtly. Then one day Americans woke up and realized they no longer controlled their health care at all, forced instead to bow to the edicts issued by Big Insurance.
Health care spending in the United States weighs in at a staggering $3.5 trillion. That’s nearly 18 percent of the American economy. Beyond the government players who manage Medicaid and Medicare, the four big insurance companies—United Healthcare, Anthem/Blue Cross Blue Shield, Aetna, and Humana—have done very well for themselves of late. On April 1, 2010, their shares were trading between $26.38 and $53.80. April 1, 2010, is significant because the Affordable Care Act was signed into law by President Barack Obama on March 23, 2010. Shares of those same insurance companies were trading between $68.33 and $97.30 per share on January 1, 2014. On November 2, 2018, their shares closed between $198.21 and $323.05 per share, an increase of 500 percent to 850 percent over the last eight years. In the meantime, interference by those companies in the doctor/patient relationship has only increased.
Americans continue to blindly pay their premiums in the form of payroll deductions for those employed by large companies or monthly checks to the insurance companies if they’re self employed. The average health insurance premium for a family of four is roughly $1,500 with no subsidies. Over 12 months, that makes the average annual total $18,000 plus a $5,000 deductible before insurance will pay. That’s a significant amount of money considering what you get in exchange: doctor’s visits for $20 and specialists for $50.
The way out of this mess is for Americans to remove themselves from the health insurance market altogether—or to participate in other forms of health insurance such as health sharing ministries and short-term insurance plans. Individuals can actually pay a doctor, hospital, or outpatient center for a service performed without filing claims or getting pre-approval from a clerk in a cubicle. There are primary care physicians across the country embracing this new way of providing health care (notice I did not say health insurance). The new way is called Direct Primary Care. Direct Primary Care physicians are focused on the patient. They can sometimes take as much as an hour to perform a comprehensive assessment and they’re available after hours and on weekends.
“Heresy,” some will say, “totally irresponsible.” But you don’t have be a math genius to see how much health care you can purchase with the $23,000 referenced earlier. The average office visit to a primary care doctor ranges from $75 to $150. As you get older, your doctor may order routine laboratory tests, just to see if there’s anything out of the ordinary, a blood count, metabolic panel if you’re at risk for diabetes, a hemoglobin A1C, and cholesterol. These blood tests, if purchased on the open market, cost between $80 and $100. Hemoglobin A1c kits to test for diabetes (and monitor those already diagnosed) can be purchased from Amazon for $40 and shipped to your home. If you’re a woman and you need that mammogram, you can get one for $181. Gentlemen, for $200 you can have your annual physical, and ladies, your price is $400, including the mammogram. This is what you should be paying for a year’s worth of preventative health care.
But what about emergency room visits? For starters, try using a local Urgent Care, which are open until late in the evenings if not all night. An X-ray with an office visit usually costs less than $500. The lesser the problem the lesser the cost. If you do have to go to an emergency room, be prepared for the hospital’s charges. If you’re knowledgeable about what resources are available to you, you can negotiate them with the hospital.
Like Dr. Kevin Wacasey, M.D. says in his book Healthcareonomics 101, “it isn’t the cost of healthcare that’s outrageous, it’s the charges.” Hospitals negotiate their agreements with insurance companies based on the chargemaster list. Think of that as the full sticker price on a new car plus 20 percent. But you’ll never know what those negotiated rates are because neither party is compelled to release them.
With a little research from companies like MDSave.com and NewChoiceHealth.com, the consumer can know prices for nearly every type of intervention or procedure. Anything from blood tests to angioplasty to knee replacement can be found there along with physicians and hospital networks that are willing to accept it. Consumers can usually find a participating provider within 200 miles from home. This new way of thinking about surgeries began with Dr. Kevin Smith and his Surgery Center of Oklahoma in 1998, which displays the prices for the most common surgical procedures right on its website. When prices are available for all to see, other players in the health care process are coerced into keeping prices in line.
Consumers shouldn’t get too caught up in the jargon of politicians and health policy wonks. Health care is available to anyone willing to purchase it and no one can be denied basic emergency care. It is health insurance that has become cost prohibitive and provides no real value except to shareholders. In 2017, there were an estimated 7.5 million people paying insurance premiums without subsidies at an average price of $400 per person (the average premium for a family of four, two adults and two children). Let’s say those 7.5 million people decided health insurance wasn’t worth it and left the insurance market. That would cost health insurance companies $3 billion—that’s “billion” with a B and nine zeros. Withholding that much from a company that earned $201 billion in 2017 just might get someone’s attention.
Right now, “innovation” and “disruption” are the buzzwords of American health care. Maybe the disruption that’s really needed is for the insurance system to lose a large amount of money.
Jennifer Hawkins is a mother, freelance writer, and registered nurse.