Understanding Basic Health Insurance

Whether you are an #individual without an employer sponsored #healthinsurance plan, obtaining your health benefits through a #Medicare eligible supplement or drug policy, or are an employee who’s company offers benefits, understanding the how and why of how the insurance coverage works causes struggles for all of us.

Utilizing the knowledge and expertise of a health insurance #broker will afford you the option of shopping companies and coverage. Brokers deal with multiple carriers, review the available markets, address differences in plans/levels of coverage, and pricing from carrier to carrier.

Understanding the Cost

The costs of health insurance are built on a variety of factors. There are more than what I will review below; however you have to start somewhere 🙂

The Cost of Care

If you haven’t realized that clinics charge different prices for services rendered, you need to be aware. Shopping around if you have a health insurance plan which requires you to meet a deductible is imperative! Today most individual health insurance plans have a select network of providers, mandating that you receive care from an in-network doctor; however if you have a group #medical plan through your employer or are on a Medicare Supplement you may have the choice of any doctor of clinic you choose. Most health insurance companies have moved to PPO’s (Preferred Provider Organization) to curb the increased cost of care. Working with a PPO allows the insurance carrier to manage procedure and prescription drugs costs.

Higher cost of care = Higher cost of claims paid by insurance company = Higher cost of insurance. It’s simply business.

Over use of Emergency Rooms or Urgent Care

If you have the flu or your child is running a fever research your plan to utilize a #VirtuWell or a Doctor on Demand type service. Many times your symptoms or those of your child/family member are easily diagnosed over the phone or via an internet chat. The service will then review the best practices for how to treat the ailment and if a prescription is needed it is sent to your preferred in-network pharmacy. These services help reduce the cost of care AND over time may reduce the cost of your premiums if more members utilize this service.

Don’t get me wrong, emergency rooms have their purpose! However when you sit at a hospital for 5 hours to have your child diagnosed with an earache who really is benefiting? Nobody.

ER visits and Urgent Care facilities charge more for the immediate care that you receive. This increased cost is not necessary in some cases.

Increased Cost of Medications

Pharmaceutical use is on the rise. Lets face it. We all have insight enough to see our children, family members, or acquaintances taking prescription drugs for depression, anxiety, ADD, high blood pressure, diabetes, migraines, or other ailments. These drugs solve issues and make the quality of life more manageable in many cases, but at what cost?

Many of our conditions can be managed by analyzing the how and why in our lives that make these medications needed. Health Insurance plans are now including Wellness Programs and Coaching to help address this growing trend in our society. According to the ASPE (Office of the Assistant Secretary for Planning and Evaluation) our estimated spending on prescriptions in 2015 was a whopping $457 BILLION dollars. Lets break this down a bit. This is 16.7% of the total cost of personal health care services. In 2015 our nation accumulated roughly $2.729 TRILLION dollars in health care services spending! That’s A LOT!

Why do you think that healthcare providers are regulating in and out of network pharmacies? Why major health carriers are merging with major drug store chains and fulfillment companies? We can curb this trend and here are a few ideas how:

  • Utilize generic drugs when possible. If a brand works better for your specific situation, use it, but you will pay a higher cost or copay for doing so. Brand drugs cost more than generics, that’s just the fact.
  • Use the in-network pharmacy. Doing this will keep you from paying the out of network cost for filling your prescriptions.
  • Look at alternative methods for controlling your condition (if possible). If you suffer from depression look at trying out a Wellness Program or seek the help of a professional to see what parts of your life could change and benefit from changing your #lifestyle.
  • Know your family history. If you have a history of high blood pressure research and put a plan in place that will keep you from relying on medications.

Location, Location, Location

We can’t avoid the costs if you live in a rural area. Just understand the more rural the area usually the higher the medical costs. There are fewer doctors and pharmacies to make pricing competitive, and further distance to travel to seek a specialist, who is usually out of network.

A few other points to note:

  • Individuals who choose lower #deductible health insurance plans usually choose to pay a higher premium in exchange for more coverage. Usually known medical conditions, planned doctors visits, and prescriptions that need to be filled on a monthly basis are the reasons behind this choice. These individuals use their insurance and cost the insurance carrier more than healthy individuals who choose higher deductibles since they do not go to the doctor but want coverage in case the unexpected occurs.
  • The United States of America has historically had one of the highest health care costs in the world according to ConsumerReports.org. WHY aren’t we doing more to curb provider costs and prescription drug costs?
  • Doctors will often order more tests than necessary. According to the Congressional Budget Office up to 30% of the care provided in the United States is unnecessary. Our health insurance providers and our government need to recognize this issue and assess processes to curb this trend. 30% IS A BIG NUMBER!
  • The Affordable Care Act mandated exchanges with tax subsidies for those who are not able to afford their care. Preventative care visits are COVERED! USE THEM! Go in for your screenings, mammograms, annual checkups. Doing these simple things will catch more major health issues before they develop into more serious and expensive conditions.

In Closing

We all have a part to play in our health care system. By controlling our individual costs through research and comparison,  taking the best care of ourselves we possibly can, and understanding the system we can manage and change how our country addresses the subject of healthcare.

Contact your local representative or research their stance on healthcare. By being well informed we can play a part in the next steps in the progression of healthcare.

Sources Used:

ConsumerReports.org. Data obtained from https://www.consumerreports.org/cro/magazine/2014/11/it-is-time-to-get-mad-about-the-outrageous-cost-of-health-care/index.htm

https://www.consumerreports.org/cro/news/2014/09/health-insurance-plans-that-help-hold-down-costs/index.htm

Department of Health and Human Services – Office of the Assistant Secretary for Planning and Evaluation, Issue Brief Observations on Trends in Prescription Drug Spending, 3/8/2016

https://aspe.hhs.gov/system/files/pdf/187586/Drugspending.pdf

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