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Thank God for insurance


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Total for one night in ICU: $14,000. Not including ER charges, or testing (an extra $6k for all of that). $20k for 24 hours in the hospital. My total for all of it is a little under $900 after insurance. The insurance company is paying $18,500 to the hospital with the rest being written off. If I didnt have insurance, or had a high deductible plan, Covid would have bankrupted me. There are also three other ER visits, multiple primary care doctors, and eventually specialists. If everything goes smoothly from here, were still looking at at least another $5000 worth of bills that I wont have to pay, but would kill someone else.

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I have exceptionally good insurance as I am a member of a fancy Hollywood union. But yeah, people are most definitely, regularly screwed by medical bills in this country.

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For most Americans, insurance comes through one of two ways: Medicare. which is government run insurance for the elderly or certain disabled people, or it comes through work. Tank gets his through a union, and my experience has been that union insurance is the best. When I was the manager of a pharmacy, my union dues were $5 a week and that included my health insurance. It was great.

 

My insurance comes from my job, but Im a member of a union. As a government employee, we basically agree to make less than we would in the private sector in exchange for good insurance and a pension.

 

The people who arent old enough or disabled enough for Medicare who dont have coverage through a job are pretty much screwed in America, though. The Affordable Care Act provides for premium subsidies based on income levels, to the point where some people can get free insurance, but still have deductibles to worry about. The two classes this most effects are those unable to find full-time jobs and people who own their own business. Because if your business is success enough, you wont get help, and premiums are insane and can take up a big part of your income, especially if you have a family.

 

And then people who do have insurance still get screwed. A lot of employers are switching to High Deductible Health Plans, which is insurance where you typically have to pay $5k ($3k-$10k is the normal range) before the insurance will pay anything. And that doesnt include the amount the company is taking out of your paycheck for premiums. In that case, unless you have $5k sitting around, youre pretty much screwed if something major happens.

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$500k for a 4-night NICU stay and 4-night regular hospital room when my son was born. I paid nothing. Now, I'd probably pay around $3-5k for it (but I would hit my out of pocket max). I have what you would consider good insurance in the U.S.

 

While I love Obamacare in theory, it kind of made a lot of us have more expensive insurance, and those of us on Cadillac plans lost them. But other companies completely gutted their insurance plans. I almost left to go work for a competitor and couldn't because the health insurance was so bad. I almost asked them if they actually pay anything for the plans because it looked like the employees paid the full cost and the deductibles were obscene.

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Total for one night in ICU: $14,000. Not including ER charges, or testing (an extra $6k for all of that). $20k for 24 hours in the hospital. My total for all of it is a little under $900 after insurance. The insurance company is paying $18,500 to the hospital with the rest being written off. If I didnt have insurance, or had a high deductible plan, Covid would have bankrupted me. There are also three other ER visits, multiple primary care doctors, and eventually specialists. If everything goes smoothly from here, were still looking at at least another $5000 worth of bills that I wont have to pay, but would kill someone else.

I honestly don't even know how medical insurance firms are even in the black. Medical bills are outrageous, and don't understand how people who don't have medical insurance (even if they have coverage through Obamacare) can even make ends meet. Every time someone argues against socialized medicine I want to kick them straight in the nards, Wolfman style.

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I think it's because medical providers and pharmaceutical companies price themselves with inflated BS rates knowing the bulk of their money is going to come from insurance companies.

 

Brando mentions an amount being written off-- we've all seen this. It's like a hospital says OH YEAH THAT BED COSTS 35654355 DOLLARS A NIGHT. We all know that's BS and the insurance company returns with their own random amount. They literally negotiate a price. If costs were actually representative they wouldn't do this.

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Wow. It's kind of hard to fathom but I guess the cost has to go somewhere.

 

the NHS provides free healthcare (but not free medication or prescriptions) but then our tax is probably higher as a result. Still, even residents and (up until recently) EU citizens could use the NHS. It's designed so that people who need lifesaving and everyday treatment can get it. But some people take the piss, and try get cosmetic surgery and stuff on the taxpayers penny. I've never had to use it for anything major, other than a few eye examinations and treatments, a few GP/dentist visits and the birth of my son. But even so, I'm so thankful we have it...for the now at least.

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Total for one night in ICU: $14,000. Not including ER charges, or testing (an extra $6k for all of that). $20k for 24 hours in the hospital. My total for all of it is a little under $900 after insurance. The insurance company is paying $18,500 to the hospital with the rest being written off. If I didnt have insurance, or had a high deductible plan, Covid would have bankrupted me. There are also three other ER visits, multiple primary care doctors, and eventually specialists. If everything goes smoothly from here, were still looking at at least another $5000 worth of bills that I wont have to pay, but would kill someone else.

I honestly don't even know how medical insurance firms are even in the black. Medical bills are outrageous, and don't understand how people who don't have medical insurance (even if they have coverage through Obamacare) can even make ends meet. Every time someone argues against socialized medicine I want to kick them straight in the nards, Wolfman style.

Coverage through the Affordable Care Act is regular health insurance. Its the same type of product thats been around for decades, only with a few added items.

 

I can do an in-depth explanation of how insurance companies make money, if you would like.

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Okay, I have a little bit of time, and I'm on a computer so it's a little easier. I'm going to break it down as simply as I can.

 

Insurance companies of all types make most of their money from investments. State Farm could completely stop doing business and survive on investments for a good amount of time. Basically money that comes in immediately goes to investments, and then they take money from that to pay claims, salaries, and any other expenses. If you look solely at premiums (amount people spend to have coverage) and claims payments, health insurance companies have to spend at least 80% on claims or refund money to their customers.

 

This does NOT mean that if they don't spend 80% of your premiums on claims that you get a refund, this is company-wide. I'm sure that all of you are smart enough to understand that, but I've dealt with complaints from people who don't get it. This effects how the company prices their policies, and the market has been incredibly confusing since 2017, and especially then, because of the GOP attempts to end the Affordable Care Act.

 

Now, you'll see me call it the Affordable Care Act or ACA, but rarely if ever Obamacare - I did that before I was in insurance, because I dislike the pejorative, but also because it's the proper term and what people in the industry call it. So if you see Affordable Care Act or ACA, think Obamacare.

 

Now, the ACA is really a set of guidelines regarding what insurance companies can and cannot do, and there are exceptions for certain policy types. It's not a type of insurance by any means. The law did create for marketplaces where policies can be purchased, but these are just standard insurance policies, and you can get premium assistance in most cases. It's income based, so you may or may not get assistance, and it's based on family size as well.

 

Now, back to company profits: most of it comes from investments, and of course the company is going to aim to keep expenses as low as possible. Claims are going to be as close to 80% as they can get, but the company would rather spend 85% on claims than 79% and have to issue a refund. It's going to be interesting to see what happens in 2020, because everything is crazy. A lot of healthcare has been put off, but then Covid has also caused some crazy spikes for some people.

 

So, in short, insurance companies hire actuaries to figure out what they need to charge in premiums to ensure that claim payments are as close to 80% as possible, leaving 20% as profit. They immediately start investing as much as possible to maximize the profit they'll get. Remember, it's only 80% of the premiums that need to be paid out, anything they make on investments is gravy that they get to keep.

 

Now, the second part of that is claims. You've got super smart mathletes figuring out the premiums, but you also need to figure out how to keep claim payments as consistent as possible. Insurance companies do this by creating networks for different policies. A network is a list of providers that has a contractual agreement with the insurance company to accept a certain payment for a certain service. So this could be that the doctor has agreed to accept $60 for an office visit. Now, they'll still bill the insurance company $100, because that's what they charge for an office visit, but they know they're only getting $60, and that's actually good for the provider as well. They know they're getting paid, they know exactly how much they're getting paid, and they know it's what they need. If you go out of network, the company is still probably going to max out at paying the $60 in network amount, and now you're going to get stuck paying the $40 that the doctor charges over that. This is called balance billing and is legal in most cases. It's fair if you made the choice to go out of network and completely unfair if you go to a hospital that's in network but that one ER doc isn't in network. Or the doctor doing your surgery is in network but the anesthesiologist isn't. Then you get screwed without any way of knowing.

 

So what happens is, the insurance company and the hospital already have agreed that for these services, we're going to approve $13,000. The hospital might charge $14,000, but that's only relevant if they're not in network or if you don't have insurance. So they write off $1,000. But it can happen the opposite way as well. The hospital can charge $12,000 and then the insurance will approve $13,000, and that's what they're paying. This doesn't matter if you've hit your maximum out of pocket, but if you have to pay 20% coinsurance on it, that can REALLY stink. Suddenly your bill goes from $2400 to $2800. And I've seen bigger changes. Typically it's better for the consumer, but it can really suck too when those weird situations happen. And the insurance company has a contract with the provider, so they have to pay based on the contract and not the billed amount.

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A good example of the weird billing is a woman had a procedure, and the doctors office billed $400. The contracted amount was $3000. She got stuck with 20% of that, and wouldve been better paying the doctor cash

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A good example of the weird billing is a woman had a procedure, and the doctors office billed $400. The contracted amount was $3000. She got stuck with 20% of that, and wouldve been better paying the doctor cash

This happened to my mom a few years ago when she had to schedule an MRI. Lucky for her, the hospital people told her not to use her insurance because it would cost her like $350 more than paying cash.

 

This is such a stupid system that we're in.

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As Ive said before, Americans have a backwards way of looking at healthcare. Hell, we actually believe that insurance is healthcare. Every time someone uses the term Obamacare, they back that idea. Thats what makes it especially dangerous, and also very Republican.

 

Healthcare isnt a financial product. Insurance is a financial product. We need to start with the basic idea of whether or not we want people to live, and the answer so far is a resounding no.

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Brando, I just wanted to compliment you on such an excellent breakdown on the insurance industry. As a lay-mam myself, it's confusing how insurance works. I feel you have helped me understand, and I appreciate you taking the time to help me do that!

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Brando, I just wanted to compliment you on such an excellent breakdown on the insurance industry. As a lay-mam myself, it's confusing how insurance works. I feel you have helped me understand, and I appreciate you taking the time to help me do that!

Thanks! Part of my job is consumer education, but thats typically done in a one-on-one situation with back and forth, answering a lot of questions. Ive done a class for a church group, and have thought about doing others. I know a lot about all lines of insurance, so Ill gladly answer any questions.

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Great because we're having the damnest time getting a general liability policy for Trevor's handyman service business. Nobody wants to insure a handyman. He's not a licensed contractor or anything either. Though he does hold a backflow inspector's license and can get insurance to cover that part of his job, but that doesn't help if he like falls through someone's ceiling while working in their attic installing a brace for a ceiling fan or something.

So, you tell me what he should be looking for/asking for so people will be like "oh good, yes we'll take your money!".

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It's because of government that prices are so high. I say privatize it all, or at least strip it down a bit so that doctors and hospitals have the freedom they once had to wave fees for lower-income patients, and care would generally be more affordable as well when they can compete in pricing. I feel the same way about education.

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Great because we're having the damnest time getting a general liability policy for Trevor's handyman service business. Nobody wants to insure a handyman. He's not a licensed contractor or anything either. Though he does hold a backflow inspector's license and can get insurance to cover that part of his job, but that doesn't help if he like falls through someone's ceiling while working in their attic installing a brace for a ceiling fan or something.

 

So, you tell me what he should be looking for/asking for so people will be like "oh good, yes we'll take your money!".

So, in this case, we're looking at two things: state law and underwriting guidelines.

 

I have no clue about Texas state law, but in Ohio there's no legal requirement for someone to have a license for that type of work, and most insurance companies won't require it. Now, companies are allowed to have their own underwriting guidelines, which gets stupid, and frequently they'll try to pretend it's a legal requirement but it isn't.

 

I would say check with a local independent agent, or maybe even a couple. Tell them the specifics of the situation and they might know a company that will work with you. Smaller companies are more likely to override their underwriting guidelines. You're definitely not getting any help from a big company.

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It's because of government that prices are so high. I say privatize it all, or at least strip it down a bit so that doctors and hospitals have the freedom they once had to wave fees for lower-income patients, and care would generally be more affordable as well when they can compete in pricing. I feel the same way about education.

You're partially right, but doctors and hospitals do have the right to waive fees in many cases, except when contractually obligated to not do so. In the case of many hospitals, they get around it by having a separate charity that pays the bills but is fully funded by the hospital.

 

You're not wrong about it being the government, but it's primarily Congress not allowing Medicare to negotiate prices. They basically just have to accept whatever, and they're so big that it's hard for even huge insurance companies to do anything about it.

 

Beyond that, I could get into a long discussion about why I think you're wrong, but that sounds incredibly exhausting.

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