The Underinsured Crisis
For years we have heard about the uninsured crisis and the devastation that hospital bills were having on those who could not afford health insurance on their own and were not offered coverage through work, if these individuals were employed. However, today a new problem is arising and in many ways, it can be just as dangerous as being uninsured. According to a 2014 Commonwealth Fund Biennial Health Insurance Survey, 31 million Americans – approximately 23 percent of Americans aged 19 to 64 – are considered to be underinsured.
If you are considered to be underinsured, you currently have health insurance, but the insurance might not offer the coverage that other more expensive policies offer. Typically, the lower your monthly premium, the more you could be responsible for out-of-pocket in the future. This is becoming more and more common as healthcare premiums rise; people are opting for a lesser quality healthcare plan so that they can afford the monthly cost. Unfortunately, this often spells disaster when a healthcare emergency happens.
A deductible of $10,000 – which is not uncommon today – is enough to brake many Americans. If you add to that a personal responsibility of 20 percent of overall charges, many Americans would have to file for bankruptcy. This scenario is seen repeatedly across America. A necessary surgery is performed, before which a hefty deductible is paid. The charge for surgery was $60,000, of which $10,000 was applied to the patient’s deductible leaving a balance of $50,000, of which $40,000 was covered by the health insurance plan. The consumer is responsible for paying the remaining $10,000, meaning that the patient paid a total of $20,000.
Add to this the very possible scenario of an unexpected out-of-network surgeon or anesthesiologist, and the consumer has been completely blind-sided. Another issue in healthcare that is happening on a regular basis across the U.S. is the contracting of out-of-network physicians, surgeons and anesthesiologists within a facility. Although the facility might be within your health insurance’s approved network of facilities, not all internal staff are in-network as well. Consumers argue that an in-network facility should make sure that all internal staff are considered to be in-network with the same health insurance companies, but that is not always true when it comes to contracted staff.
This consumer has now spent $10,000 out of his pocket for a deductible, which very possibly was put on a credit card or two, he is in debt to the facility for another $10,000 as his responsibility of 20 percent of the charges and now he has another bill hanging over his head. This new bill could potentially break the bank. It’s not uncommon for an out-of-network surgeon’s charges to reach tens of thousands of dollars.
Do you have tens of thousands of dollars set aside for a situation such as this? Most Americans do not. What happens next when you do not have this amount of money for the facility? You can try to make payment arrangements with the hospital, but chances are, that monthly payment is going to be more than you can handle if you could only afford the lesser health insurance premium. After some time when the payments are unable to be paid, you will likely be sent to a collections agency.
It’s not unheard of for a healthcare institution to go after a patient’s personal assets as payment. Years ago, this was almost never heard of. But today, this is a definite possibility, depending on what actions the facility chooses to take. Not every healthcare institution will do this, but it is a real possibility if you owe the facility a large sum of money and adequate monthly payments are not being made.
Many hospitals and other healthcare facilities offer a discount to patients who are uninsured. This discount can typically offer savings up to 35 percent. Facilities are able to do this because they already accept lower reimbursement for services for patients who carry health insurance. Healthcare facilities negotiate discounts with health insurance companies and accept a lower price from these insured individuals in exchange for the health insurance company sending the hospital a large amount of business.
If you are underinsured, there are steps you can take to help prevent a financial hospital bill catastrophe. First, you must be familiar with your health insurance coverage. It’s not uncommon for a consumer to receive a surprise bill because they thought that their health insurance covered procedures and services that it did not. Additionally, you must know what your financial responsibilities are under the coverage. If you think you know what your out-of-pocket maximum is, read your policy and make sure that you are correct.
If you receive a bill from an out-of-network doctor when the procedure was performed at an in-network facility, talk to your health insurance provider. Many times, the health insurance company will decide to cover the procedure if the claim is resubmitted. But again, make sure you are very familiar with your health insurance plan coverage, since this might already be addressed within your policy.
Your main defense against being underinsured is to be familiar with your policy and to try to have a plan in case of an emergency for covering any extra expenses. Of course, knowing that most hospital bills are full of inaccuracies and are usually inflated, checking to make sure your charges are true and accurate is an absolute necessity. Request a detailed, itemized statement as soon as possible and scrutinize this document line by line. If you know that you did not receive a supply or service, contact the facility’s billing department and let them know to remove these charges. Once you are satisfied that your bill is correct, make sure that the pricing is fair and reasonable. Research prices for the same procedure in other area hospitals. If your pricing is above average, let the hospital know. If you need help reducing your bill to a fair and reasonable price, contact a reputable medical billing advocate to do this work for you.
About the Author
Pat Palmer is the Founder and CEO of Medical Billing Advocates of America and Medical Recovery Services. MBAA and MRS’ mission is for all healthcare payers to only pay medical charges that are True and Accurate and prices that are Fair and Reasonable.