Saturday, November 14, 2015

Consumer Driven Health Plan?

Imagine going grocery shopping where the price of none of the items was marked and you went to the check out counter and they scan all your items but still don't identify the prices and then a week or two later you get a bill showing what you spent for each item.  Of course these being consumable goods you have likely eaten them by the time the bill arrives so when you find out that the bag of chips that you thought would cost about $2.00 actually was priced at $35.00 you have little recourse as those chips are long gone.  A family member recently had some sinus issues and went to a physician where she was prescribed 3 medications.  The local pharmacy happily filled these prescriptions and in addition to the myriad amount of drug related information the receipt joyfully reflected "You Owe:  $0.00".  Well that sounds good... until you get the full story...

I've had a consumer driven health plan for a number of years.  Overall, I think it's great and the best choice (or lesser of the evils) among the health insurance options for my family.  With my particular plan we are started with a $2400 health account which we draw from throughout the year to pay medical expenses as they arise.  After exceeding the $2400, we are mostly on our own to pay the medical bills until we reach a high deductible at which time a standard type insurance plan kicks in to pay a percentage of the bill.  If you don't use all of the $2400 in a calendar year, it will roll over if you elect the same plan the following year.  The theory with this plan is that if the consumer drives the spending of the $2400, then the consumer will exercise prudent care to maximize the use of this money.  For example, a wise consumer may push for generic medications over name brand medications to reach a satisfactory result.

About a month ago, I was happy to see that we still had a little over $1,000 in our health account - yippee, I thought; we'll have money to roll into the following year to be ready for any emergency.  And then the explanation of benefits rolled in and like a punch to the gut, I learned that one of those medications that I owed "$0.00" actually cost around $230... ugh!  Yes, I realize that I may not "owe" because there was money in the health account to cover it, but I sure would have liked to have known the cost up front.  I don't know if my family member obtained $230 worth of relief.  Additionally, I will note that due to the privacy laws (HIPAA), it was not disclosed on the explanation of benefits which of the 3 medications cost $230.

We are encountering a similar situation will allergy treatments.  My family member is exploring allergy shots.  One would think that a basic decision making factor would be to know how much it costs and you would think that if you go to the provider's office they would be able to at least give you an estimate of what it costs.  Appallingly, when you try to ask you quickly find that most of the health care providers have no idea.  When my family member asked, she returned home to proudly report that "with our health plan we pay so much as a deductible and then the insurance pays 80%...".  So instead of getting an answer, she was given the black hole recitation of insurance speak.  What would have been helpful would be to know something along the lines of about how many visits for shots would be needed for the first year and about how much each visit will cost.  We can do the math on our end to guesstimate about how much the insurance company will cover.

In addition to my Consumer Driven Health Plan, I also must make some elections for a Flexible Spending Account (FSA).  Thankfully, my employer has recently implemented the election for the $500 yearly rollover of unused money for FSA.  Flexible spending accounts are also a consumer driven tool in our health care system but once again a basic tenet of planning an allocation for your flexible spending account is knowing how much your anticipated health care may cost.

Knowing costs upfront is a basic ingredient of consumerism.  I recently took my car to the dealer for service.  Before starting any work an estimate was given as to how much it would cost.  The dealer made some recommendations for service and provided estimates as to what that would cost.  Finally, as work progresses and if the dealer finds any additional work that should be done, the dealer contacts me to identify what they believe needs to be done and how much it is going to cost.  While I realize that health care is not 100% like auto care - if I am sprawled out on the pavement, I don't want someone to resuscitate me to give me an estimate to see if I want to be taken to an emergency room.  However, more often than not, health care is not an emergency and I do not understand why with all the health reforming that is going on there is not a law that the provider be required to disclose the cost before providing the service or medical goods.  I understand that there is often a negotiated amount which is less than what the provider may typically bill, but knowing the "billed" amount can be an important starting point for the consumer to get a flavor for the cost of health care.   I want to know if a 30 day dose of medication is going to be billed at $230 or whether it is being billed at $70; depending on the situation, I may want to revisit the situation with the prescribing doctor before spending the higher amount.

Just for fun, I ran a quick Google search, "How much do allergy shots cost" and was quickly able to find several sources that provided a ballpark range.  I also encountered allergy clinics which reinforced my experience with providers in that their first response is to refer potential patients to their insurance company.  Any of us in the real world who has had the displeasure of calling our insurance company would not find this to be a satisfactory answer.  My experience in these situations generally has been that the provider will pass the buck by referring you to your insurance company and the insurance company will in turn complete the circle by referring you to your provider.  I realize that given the many insurance plans out there it may be unreasonable to expect your provider to be able to tell you how much you will pay out of pocket; however, I do think it is entirely reasonable for a provider to identify what they are recommending for you ("CPT codes" and estimated number of instances) and what they will be billing for those services.

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