August 26, 2014 by Tony Novak
The number of consumer complaints I receive through OnlineNavigator about out-of-pocket health care costs seems to be growing every week. Yesterday I counted about 10 complaints. (Some call and write for help multiple times from different numbers or addresses so counting the number of complaints is not so easy). All I can do is try to present a positive attitude in this often negatively charged environment. One caller yesterday said “I’m afraid to go to the doctor anymore because I don’t know what’s not covered by insurance”. Most of these consumers are disgusted with their insurance companies and health care reform in general. A record number of insurance customers cancelled their coverage during the month of August, according to the copies of confirmation emails that I receive through Freedom Benefits. Only one caller bucked the trend saying “I need to buy more insurance”. The number of policy cancellations outpaced new enrollments by a factor of about six to one this month. The consumer response is clearly just emotional, not logical, but could become a serious threat to implementation of health care reform.
Of course health care financial advisers knew what’s not covered and have been trying to warn consumers for years since passage of the Affordable Care Act. The name was a misnomer for a law that was clearly designed to move more of a patient’s routine care away from government and insurance and back to the consumer sector. ACA major flaw of lack of cost controls at the consumer level was widely known years ago. I’ve written and talked many times about the requirement for increased cash reserves to pay for medical care. Under current policies most of a household’s normal health care costs are out-of-pocket. In the event that a medical procedure is required, the cost could grow to $5,000 for a single person or more for a household. Few people are financially prepared for that type of unexpected expense.
What we didn’t predict was the voracity of health care providers to take advantage of that shift in demanding additional payments from patients. It appears to me that medical providers have quickly become expert in learning how to extract extra revenue from those millions of newly insured patients now coming in for “free” treatment that they heard promised under Obamacare. It doesn’t occur to most to read the fine print and ask questions. The few who do ask the right questions often get vague or not-useful responses.
The story usually goes something like this: patient goes to doctor for a service that is supposed to be “100% covered” under the law. It could be something as simple as a flu shot or an annual exam. The medical provider either adds to the service or submits the charge to the commercial insurer or the government plan under a different diagnostic code for billing purposes. The result is that the patient’s portion of the bill is large; the portion covered by insurance is small.
Until recently this issue received little attention in mainstream media. Now I am beginning to get a few questions or social medial comments from reporters. An industry publication updated their coverage of the topic, originally launched in 2012, with a new story this week.
Meanwhile, all I can do is help people boost their cash savings and insurance reserves for what, ultimately, will be their largest lifetime expense. Some opt for supplemental health insurance instead, thinking that may be an easier approach. Either way, this is not a message that consumers want to hear.