In the United States, navigating a healthcare system that runs on profit, without losing your shirt, might seem like a monumental feat. But it’s doable as long as you’re an informed consumer. In this post, we’ll guide you through the basic do’s and don'ts of healthcare consumerism and how to get the most for your money when it comes to treatment and health insurance.
Do: Understand different roles in the medical system, including yours
You are the consumer. Everyone else is selling something. Here’s how those relationships interact.
You. We refer to you, the patient and purchaser of health insurance as a “consumer” because that’s what you are. Just like you purchase (and perhaps spend hours researching) a vacuum cleaner, you are purchasing health insurance and medical care.
As a consumer, you have options. You don’t have to accept the first medical opinion that’s offered to you, you don’t have to keep your doctor just because you’ve seen him or her for years, and you don’t have to buy any specific type of health insurance just because it’s what your employer offers.
Your employer. Whether required by federal mandate or out of the goodness of their heart, if your employer offers you sponsored health plans, you’re a little closer to receiving affordable healthcare (theoretically). However, your employer buys the health plans that make sense for the company as a whole. That doesn’t mean they don’t care about your health (healthy employees are productive employees), but you might find the choices they make aren’t the choices you’d make for yourself.
Health insurance companies. Their job is to sell you a health insurance policy on which they make money. They are not a charity. You pay a certain amount each month and in turn, they promise to pay for a previously agreed-upon amount of the medical care you need. Sometimes they honor this agreement without issue, sometimes you need to advocate for yourself in order to get a claim paid. How your insurance company makes its money largely dictates the premiums it charges and the level of coverage it provides.
Your doctor. Your doctor’s job is to provide preventative and reactive care to keep you healthy. However, your doctor isn’t a volunteer. So your doctor’s office staff is in charge of making sure the office makes money on whatever services it provides. As such, you might find different doctors charge different amounts for the same type of treatment.
Hospitals. Like your doctor, a hospital has two jobs: provide treatment and make money. Where the hospital is located, its prestige, and how the hospital makes its money will largely dictate the prices charged for treatment. Like with doctors, you might find costs differ between hospitals (and even between different locations of the same hospital).
Do: Shop around
Whether you’re looking for health insurance, a primary care provider, or a facility in which to have a knee replacement, canvas the market for options.
Health insurance. Before purchasing a health insurance plan, thoroughly research your options so you get a sense of where the market is in terms of cost and coverage levels. It’s impossible to know if a plan is “expensive” if you don’t know what you’re comparing it to.
That being said, employer-sponsored health insurance is almost always the most affordable way to purchase a health plan because most employers cover at least a portion of employee premiums. Some employers even cover a portion of premiums for spouses and dependents.
However, if you review your employer-sponsored plan and see that it won’t meet your health needs (either too much or not enough coverage), you can always buy a plan in the private market. If you don’t use the medical system much outside of preventative care, it might make sense to buy a High Deductible Health Plan (HDHP) and put the money you save on monthly premiums into a Health Savings Account (HSA) to save for future medical costs.
Medical care. A big part of medical care comes down to trust. If you can’t trust your practitioner, it’s pretty difficult to follow their advice. So interview different doctors in your network until you find one with whom you have a good report.
Also, different doctors have different approaches so it’s important to understand that there are very few hard-and-fast rules when it comes to medical treatment. For example, in treating cancer, one doctor might recommend surgery first, then radiation afterward. And another doctor might recommend the reverse. As such, get second and third opinions when it comes to a diagnosis or treatment plan. Also, if you use alternative medicine as part of your treatment or wellness plan, you might want to look for a care provider that can incorporate this into a traditional treatment plan.
Hospitals. If you have a medical emergency, you want to go to the closest in-network hospital if possible (sometimes during an emergency you just need to get to the closest hospital, period). To ensure you end up at an in-network hospital you should:
- Make sure you know what and where your in-network hospitals are.
- Keep your insurance card in your wallet in the case you’re not conscious or otherwise able to get yourself to the correct hospital.
If you’re going to a hospital for a procedure like surgery or to give birth, make sure you get a quote of the total costs associated with said procedure. Then get quotes from other hospitals and compare them.
Something to note: if your procedure requires anesthesia, make sure the anesthesiologist is also in-network. Hospitals will sometimes out-source anesthesia services and those providers are not always in the same network as the hospital.
Don’t: Assume a medical bill you receive is correct
Medical providers and insurance companies are run by people and sometimes people make mistakes. Sometimes the wrong Current Procedure Terminology (CPT) code is given to the insurance company, sometimes the dates are wrong, sometimes the way the bill was submitted to the insurance company was wrong. And sometimes, approval for certain treatments is subjective and the person at the insurance company who was responsible for said approval decided not to approve payment. All of these can be fixed.
If you’ve received an unexpected bill from a medical provider for treatment that you thought was going to be covered here are the actions you can take:
- First, contact your insurance company to find out whether the claim was rejected or denied and the reason.
- If your claim was rejected it’s most likely due to a coding error. If an error was made by the medical care provider, ask your insurance company exactly what the error was and how the billing office can correct it. Then call the billing office and relay the information to them. In rare cases, you may have to connect a representative of the billing office with a representative from the insurance company to ensure the issue is resolved.
- If the claim was denied by the insurance company it’s usually because there was missing information in the claim, the treatment is missing prior approval, it includes uncovered services or the insurance company deemed it medically unnecessary. In order to correct this, you must ask your insurance representative exactly why the claim was denied and how to appeal it. Then, you will have to call your medical provider and explain the issue. Appealing a denied claim often requires the help of your medical provider to prove that a procedure was medically necessary or to clear up any clerical errors.
- If, after the appeals process, the insurance company still denies your claim, you have two options: you can sue your insurance company to pay the claim (this probably only makes sense if it’s a very large bill), or you can negotiate a lower rate with your medical care provider. Sometimes medical providers give “cash” discounts for people paying out of pocket, and almost always they can set you up with a payment plan. You can also always use your HSA savings for any out-of-pocket costs.
Don’t: Let too much time pass after you receive a bill from a medical provider
Whether you were expecting to receive a bill for treatment, or one arrived unexpectedly, look at it immediately. If the bill is correct, make a plan to either pay this bill in-full by its due date or call the billing office to set up a payment plan.
If you receive an unexpected medical bill from a provider because of a rejected or denied claim, call your insurance company immediately. Insurance companies only allow a certain amount of time in which to submit a corrected claim and once that time passes, you could be on the hook for the outstanding cost. Remember, you can use your HSA to pay for out-of-pocket costs.
Navigating a for-profit medical system requires being an informed patient. And to be an informed patient, you have to do your research, assess your options and make sure you don’t take a rejected or denied claim as a final answer. Being an informed patient also includes contributing to your HSA so you have tax-free money with which to pay out-of-pocket expenses, which could save you up to 30% on said expenses depending on your tax bracket.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.