I’m going to pick on this tweet for a minute as I want to get some thoughts out for a class project that are relevant to this tweet:
@DavidBalatHC says 75% of insured individuals don’t hit their deductibles, which makes them effectively cash purchasers – if they’re able to comparison shop.
— Charles Miller (@Cmillernd2005) March 2, 2023
There are some big problems with this.
First, a lot of people effectively have no deductible. People on Medicaid effectively have no deductible, people on Medicare with a good supplemental plan barely have a deductible. Secondly, there are a ton of plan designs that have substantial services that are offered without either any cost-sharing (paper to come in April on one set of them!) or where the cost-sharing is only co-pays or co-insurance. Finally, the amount of spending in the bottom 75% of the commercial spending distribution is not particularly high. The bottom half of the entire spending distribution is about $500 in spend. Any mechanism of payment works well enough for this group. The real spend is in the last 10-15% of the population who are not price sensitive because their claims dwarf any allowable out of pocket limit and we don’t have plans with declining co-insurance curves (that is a pin for a future post).
So let’s assume this factoid is right, so what?
Big R
I’ll admit I kept scrolling looking for you to answer, nice variation on the “alphabetize this pack of m&M’s” prank
WV Blondie
I’ve never met my deductible, ever, and I’m in my late 60s. Never met the IRS tax deduction level, either (though that might change in my ’22 filing, thanks to an extended period of PT after a bad fall).
Is there any connection between the IRS deduction amount and what insurers set for their deductibles?
Ohio Mom
Off topic, as I often am. Not looking for advice, just venting.
When Ohio Dad and I started collecting Social Security retirement, Ohio Son was moved off of SSI and on to SSDI as a disabled adult child. It’s a good deal for him, his SSDI benefit is about twice as much as his SSI benefit was.
After two years on SSDI, he is now eligible for Medicare on top of his Medicaid, and we are now in the thicket of figuring out a new system.
We are going with Traditional Medicare. Apparently, Ohio Son does not have to pay a Part B premium because he falls under an income limit (don’t ask me what happens if/when he starts earning money again).
And apparently he does not need a Gap plan because Medicaid will pick up those expenses (leading to questions like, What protects Medicaid from huge bills, is it re-insured? Please note, I don’t really care what the answer is, I recognize it as not my problem).
Thst leaves us scratching our heads about a Part D plan. Right now it looks like he will be responsible for premiums but maybe Medicaid will pick up the deductible and co-pays? We thought we found a plan with no premiums but we were mistaken; we are waiting for enrollment information to arrive on the second plan we identified (“we” in this case means the family fine-print reader, Ohio Dad).
Usually our County DD Board is a great help on issues like these but there are so many variations on this situation that they are declining to give much advice (also maybe because none of this money will go through their books). We are fortunate that Son medical needs are fairly minimal and straightforward. Many individuals in tne DD system have complicated medical needs.
Done. Thank you for letting me vent.
Another Scott
It’s the blind men and an elephant problem, isn’t it?
Yes, people should know what their health care costs are going to be in advance.
But that’s not the real problem, as you say. The problem is that healthcare costs too many normal people too much money. Either insurance that they have (and rarely use) is too expensive, or claims are denied, or payments are delayed for months while insurance companies try to put up every possible obstacle to payment, or they play “not in network” games, or people are victims of the patent system [ insert Dean Baker link here ] that drives up costs and makes some treatments unavailable, or …
People don’t shop for healthcare the way they shop for dog food or mulch.
Price transparency will only help if regulators and people writing the checks pay attention and use those numbers in buying and contract decisions. Us normal humans don’t do those things.
Thanks.
Cheers,
Scott.
Ohio Mom
@WV Blondie: We met our deductible once. Ohio Dad went to the hospital because he was pooping blood. Turned out to be diverticulitis.
It was the next to last week in December and the cost to us for several days in the hospital was a grand total of $75.
Do I need to say that we would just as soon never reach a deductible? We did enjoy our chuckle over the minuscule bill when we weren’t wondering what it would have been had OD’s symptom presented two weeks later.
Ohio Mom
@Another Scott: We ARE shopping for Ohio Son’s Part D plan strategically. Or at least we are trying to. We are college-educated and Ohio Dad is a math whiz, we are somewhat familiar with how Part D works, and still we are fumbling because so much is so unclear.
We know we are probably in the minority. No doubt many people go with Medicare Advantage out of decision fatigue and frustration.
Scott
One, this assumes that healthcare is a consumer product. This is the same fallacy used by libertarians for believing that education is a consumer product. This may work for routine primary care but you don’t shop around for anything beyond that. Primary care is only about 7% of the the US healthcare budget. Yet these people pretend that this will solve everything
And isn’t the deductible limit the risk mitigation part? Isn’t it a fallacy that we should be aiming to “beat the system” and exceed the deductible so we come out ahead?
Roger Moore
The big point for me is that any approach to reducing healthcare costs that’s built around comparison shopping is doomed to failure. If the doctors can’t tell you in advance how much your care will cost, you can’t comparison shop.
Steeplejack
Also, who the hell “comparison shops” for health care?! When you are facing a possibly serious health problem, you want the best care possible, damn the cost (but just not to you!). Nobody wants to go to the medical equivalent of the Dollar Store to save a few bucks.
P.S. And good luck on getting any provider to tell you ahead of time what something is going to cost.
Steeplejack
@Scott:
“One, this assumes that healthcare is a consumer product. This is [a] fallacy [. . .].”
Word.
Chester
We tried to price out a colonoscopy beforehand and were told NO COST to us. Then the anesthesiologist bill came in.
WV Blondie
@Chester: I hope we don’t have the same experience! Hubbo (who’s on Medicaid) has a colonoscopy scheduled Monday.
Another Scott
Wrong thread!
Cheers,
Scott.
Cap'n Keith
How can a sick person shop around? When I need a doctor, I don’t usually know what’s wrong. I just go to the doctor and they arrange the tests and treatments I need. Is it truly workable to have them instead tell me what tests and treatments I need and I go shopping? I assume ordering tests and treatments requires a lot of knowledge? Ever tried to by a clock radio? Which one does what I need. It’s COMPLICATED.
delphinium
@Chester: Anesthesiologist costs are so often incredibly hard to pin down. I am due for mine but will need to have the procedure performed without anesthesia due to a previous issue. Am waiting to see if the office will do this and if they can then provide the potential cost for just the procedure which would seem doable.
Sure Lurkalot
@Ohio Mom: Depending on the formulary you need, part D plans can be pretty cheap. So, if you enroll and then find out next month or so meds are covered by Medicaid, you could just cancel?
Ohio Mom
@Sure Lurkalot: Medicaid is the payer of last resort. If you have the possibility of any other coverage, you must use it.
This was simple enough in the old days, when Ohio Dad was working and Ohio Son was a minor. Dad and his employer split the cost of the premiums and Medicaid picked up any deductible and copays.
Now that Son is on Medicaid, there are Part B and D premiums to pay. Apparently, Son is under the income limit (don’t know what the cut off is) and Medicaid will pay his Part B premiums. But he is on his own for the Part D premium.
If it sounds like there are parts missing from this explanation, maybe there are (because I am still learning this new-to-me system) or maybe it is inexplicable (or maybe both).
I am reasonably sure that once we settle on a Part D plan, Medicaid will cover the deductible and copays. The trick is to find a very low cost Part D plan because that cost will have to come out of Son’s meager SSDI.
Now about the Part B premium, it may be that when Son starts earning money again, he ends up above the cutoff and will have those premiums taken out of his SSDI, leaving him poorer than if he didn’t work. I remember Another Scott mentioning recently that his autistic brother can only work very part time else he would lose benefits, even though he might like to work more hours.
Steeplejack
@Cap’n Keith:
Just a (lengthy) note: Because of an idiosyncrasy in WordPress on this site, if your nym has an apostrophe in it every comment you make will have to be approved by a front-pager, unlike comments from nyms that don’t have an apostrophe.
There is a way around it. You have to use a formal, “slanted” apostrophe—▶ ’ ◀—a single right quote, rather than the straight quote you get by default when typing.
You can copy the one above or you can insert one in your nym using the “special characters” gizmo above the comment box. It’s the Omega (horseshoe) icon at the right end of the comment toolbar. You don’t want the first one that looks like a right quote, two spots before §; you want the second one, two spots after ». This is obvious on a computer, where the characters are labeled, but you might need it on your phone.
You have to do this only once, if you have checked the box to have WordPress remember your nym. (And of course your first comment with the revised nym will have to be approved by a front-pager.)
La Nonna
Really, if little Italy can manage universal healthcare at a fraction of what the US spends per capita, even with all the chaos and slightly nutty bureaucracy here, how/why cannot the US cut out the damned insurance companies? Oh, and the healthcare is amazingly good, only the highest praise from us olds and handicapped. We would be dead and/or bankrupt under the American system.
RaflW
It was a major PITA to figure out, as cash buyers of non-exchange plans, wether my BF should switch to a different insurer for 2023. The key question in his case was the formulary, but I think it relates to this whole price transparency thing.
Last year we had different insurers who both offer the same clinics and (largely) the same caregivers. We went together to a travel medicine nurse for a (planned but later missed) trip to Kenya.
My total out of pocket for the visit, jabs and offsite scripts (malaria and stomach bug pills) was around $75. His was well over $250. I had the significantly higher deductible plan! How the heck do people ‘shop’ for care or coverage in such a dumb, opaque world?
I’d never walk up to a ticket counter, say ‘two round trip tickets to NYC please’ and then see 5 weeks later that my seat cost $250 and BF’s identical seat was $500 – with zero price disclosure in advance. It’s nuts.
StringOnAStick
Made our deductible once, on my first knee replacement. Then I realised that doing the second knee in the same year would be BOGO, so I gritted my teeth and did it. Talk about a perverse incentive! I’m glad I didn’t wait until the next year because Covid hit and orthopaedic surgeries came to a halt for a long time.
I love my new knees; I’ve skied 42 days so far this year and every one of those days I got my turns by climbing the mountain first, usually 3-5 trips up per day. I will note that it took until year 3 before I never felt any post surgical pain anymore and had also finally lost the PTSD from years of always having severe arthritis pain from skiing or any other activities. It’s difficult and brutal surgery with a very long recovery period, and if you don’t stick with the PT and continue to push forward, you are just trading arthritis pain for on going, poor outcome pain. I see so many who replaced a painful knee, continued to just hang out on the couch, and didn’t gain much as far as overall lived pain level. That’s the aspect they don’t mention at the surgeon’s office.
Yutsano
My deductible this year is $350. It’s already gone.
WeimarGerman
I am fine with many people having no deductible. The problem is for those of us stuck with employer based plans. If you have a $5k deductible and you never meet it, then what is your premium for ? Is it purely for catastrophic expenses? Its not its just cost shifting and profiteering for the insurance plan and hospital execs. The whole for-profit system is rigged in many ways.
Chris T.
@Scott:
Ridiculous! Whenever I have a heart attack, I wait for heart surgery to go on sale!
Chris T.
@Ohio Mom:
I’m still always astounded at what shows up in the Explanation of Benefits paperwork. This example (from memory) is from about 20 years ago… Tthey wanted X-rays. Price: $380. Agreed-on-in-advance-price with insurance company: $18. We paid: $10; you owe: $8.
Which means that if I’m covered by Blue Cross (I think it was at the time), the cost of an X-ray at the local hospital is $18, but if I’m not, it’s $380? What the everloving f…?
Ragbatz
@Chris T.: i stock up on heart surgeries at Costco. Since they sell 3 packs, I always have a spare one around so that I never need to drive out to Costco to get another whenever I need a second or third one prior to full recovery from the first.