Monthly Archives: January 2011

Consumer health care costs have been on the rise. How does your spending compare?

Posted on by Simplee
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It would probably be difficult to find one person who thinks health care is a bargain. Still, many are ‘hoping’ most of the cost increase does not have an immediate impact on them. After all, ‘I’m paying my monthly premiums’, right? Well, the reality is health care cost is on the rise for everyone, including you and me. Not only our monthly payments are increasing every year, but our out of pocket (deductible + copayments / coinsurance) as well. Here’s a snapshot:

  • Out-of-pocket health costs for the typical insured family of four were over $3000 in 2010—almost a 50% increase over the past five years!
  • Just last year, the average co-pays for physician visits grew 10%, to $22 for primary care and $31 for specialty care.
  • Premiums have also grown: the average family of four with insurance through their employer paid $4,325 over the year on premiums alone, almost twice as much as their share five years ago.

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We’re guessing you have not realized how drastic these changes have been for you? So what can you do about it? Start by becoming a smart consumer. Understand where you spend your money and why. Learn how to better utilize your plan and learn how you can save money. Simplee already offers the first steps with centralizing and tracking all expenses and understanding your plans & bills. Soon, Simplee will be able to help you search and compare medical services, so you can shop for cost and quality in healthcare, just as you would shop for any other product. Health can be simpler than you think!

[i] Milliman Medical Index 2010.

[ii] Kaiser Family Foundation / Health Research & Educational Trust (HRET) survey of Employer-sponsored Health Benefits, 2000–2010. http://ehbs.kff.org/pdf/2010/8086.pdf

The 10 minute lesson on navigating health care

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You already know that figuring out your health care coverage is one of those things you “should do… when you get the chance.”

If you don’t know where to start, take ten minutes now to get oriented.  After that, it’s easy. Once you know the lay of the land, getting that statement in the mail or comparing a new plan doesn’t have to raise your blood pressure.

1)    It’s all you.

We don’t mean to say that you’re on your own and no one will help you. We mean that the way we get health care is scattered: our insurance plan is always changing, we have multiple physicians, we get tests from all sorts of labs and clinics. Do you have it all organized in one place?  Because if you don’t, no one else will either!  Which means that you must be the one to bring it all together. You’ll be glad you did it.

  • Request a copy of your medical records from all your providers. You have a right to obtain these records.
  • Start a PHR (personal health record) to manage all your health information (or a family members’) in one centralized place.
  • Check your bills. Make sure you are getting billed for the correct services and keep track of each with a tool like Simplee. You may also receive one or more EoBs (Explanation of Benefits). These letters are not bills—EoBs are notices to let you know that a service has been billed to your insurance and how much will likely be covered.

2)    Know your vocabulary.

If you want to navigate the system, you need to know the terms.

  • Premium: The fixed amount you pay to your insurance company (or employer) every month.
  • Deductible: An amount you must reach in out-of-pocket costs before your insurance starts paying. The higher the deductible, the more you’ll have to pay yourself before your insurance helps you.
  • Co-pay:  A fixed amount you may have to pay for certain services each time you receive them.
  • Co-insurance: A percentage of the total cost you may have to pay for certain services.
  • Out-of-pocket maximum: The most your health insurance plan can require you to pay on deductibles, co-pays, or coinsurance in a year.  It does not include premiums. The out-of-pocket max is a protection for you, so the lower the better.
  • Claim: A request for your insurance plan to pay for health services. Usually, your provider will send the claim to your insurance company, the company will pay, and you will be billed for the remainder.
  • Negotiated Discount: The discount in reimbursement a provider agrees to accept from an insurance plan for each service they provide. Each insurance plan will have a different rate from another plan because of this discount.
  • Explanation of Benefits (EoB): A notice from your insurance company that a claim has been made for health services you received. An EoB is for your information only. It tells you that your insurance has been billed and how much you might expect to pay. A bill will usually soon follow an EoB.
  • In-Network Provider: A health provider (physician, hospital, therapist, home health agency) that has agreed to contract with a certain health plan. HMOs and PPOs use networks to keep health costs lower by only covering services from these providers.

Looking for more? Find a full health care glossary here.

3)    A cost is not just a cost.

Unlike most consumer goods you purchase, hospitals and physicians generally don’t have a set “sticker price” they charge for a health service. Instead, they negotiate different prices with each insurance plan they contract with. So you and your neighbor could get the exact same surgery done at the same place, and the hospital might put a different sticker on it, depending on what insurance you each have.

It’s difficult to know your costs beforehand, but there are a lot of things you can do to keep your costs low:

  • Stay in your network. Most health plans, such as HMOs and PPOs, will only cover services with providers who are in their network. Or, they may offer better coverage in the network, such as 80% in-network and 50% out-of-network. Check to make sure every doctor you see is in-network by calling their office. Also be aware of hidden out-of-network costs when you visit a hospital.
  • Be smart about your deductible. Know how much it is and when you have met it. If you meet your deductible towards the end of the year and still plan to get a lot of health services, try to schedule them within the year so that you do not need to meet the deductible again right away. And remember, there may be a separate deductible for in-network versus out-of-network providers or for prescription drugs. See here for more deductible tips.
  • Check if you need a pre-authorization. Some insurance plans require you to get authorization from them before a test or procedure. Your doctor’s office should be able to find out or you can call your health plan yourself.
  • Pay your bill on time. Just like any other bill, late fees add up.

Updated 9/29/2012

 

From avoidance to consumerism: It’s time to be a smart health care consumer

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This post was written by Tomer Shoval, Simplee's co-founder and CEO.

I’ll be the first to admit, I avoided managing my own health care costs. Who wants to deal with it? Going to the doctor is already not much fun– dealing with the cost and paperwork makes it worse. Add to that the level of complexity and inefficiency in our health care system and you have a whole list of reasons to avoid dealing with it.

Here’s an example; you get a bill from your doctor for an appointment that happened 2 or 3 months ago. What is this bill for? Which family member needed care? Did I pay for it already?

And that’s only the beginning. What about understanding why I need to pay? I’m paying a lot every month for insurance, so why do I owe more money?

To figure out the whole mess, I try to find the letter from the insurance company that explains the bill. After 10 minutes digging through a pile of papers, I find the relevant claim. After two more minutes of scanning the letter, I see that I still haven’t met my deductible. Really? It seems like with all that I’ve paid this year that my deductible must be met by now. Isn’t it time for the insurance company to pay? Frustrated, I find myself on the phone on hold with my insurance company listening to bad music. Sound familiar?

I won’t even go in to trying to decide what medical plan to choose or deciding whether or not to sign up for an FSA or HSA account (you’re not alone if you don’t know what these are). Why can’t I just pay my insurance company monthly and forget about the rest?

Can you blame me for wanting to avoid all of this? Tons of paperwork, significant delays, complex language, overwhelming amounts of information, cross-referencing of data from doctors & insurance companies, errors, different policies for different types of care, and on and on. Who wouldn’t want to avoid that?

Now, here’s the real problem; we can’t afford to avoid it anymore. The cost of health care — both having a policy and our cost sharing of the payments for services throughout the year (called ‘out of pocket’) — have gone up by 50% in the last 5 years (according to 2010 Milliman Medical Index). Our health care cost — not the government or our employers (it went up for them as well), — OURS!

We pay over $4,000 for premiums and $3,000 out-of-pocket every year!

Let’s step back for a second and compare the process of purchasing a camera versus choosing a health plan or going to the dentist for a root canal. One costs about $200. The other costs at least 10 times that. I’ve spent at least an hour looking for the best price on a camera and didn’t spend any time at all before going to the dentist and paying $2,000 for a root canal (my insurance only paid 50% according to my plan).

Transparency, accessibility, simplicity, and ease of use are key things that allow me to be a smart shopper of consumer goods. It’s time to create that same experience and opportunity in health care.

This is exactly the mission of Simplee.