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Health Insurance–what good is it when you have such a high deductible? You’re paying for everything!

08-15-2008 by Colleen King

In order to save money on insurance premiums, many people whether in an individual health plan or group health plan will select a health insurance plan with a higher deductible. They figure they are normally healthy, aren’t going to a doctor very often, so why spend a fortune on health insurance premiums? This is how I generally direct people to go.  But then they go to a doctor, pay for the visit and associated costs, and wonder, ‘why the heck am I paying premiums if I’m paying for care too?’


A couple of months ago I had something come up with a client reinforced what I tell people all the time. When you have a higher deductible plan, it’s true, you are paying for a lot of your expenses. But, when you see a doctor or other type of provider that is contracted with the insurance carrier you have your health insurance with, you pay the contracted or ‘negotiated’ rate. Big deal? It sure can be.




My client had a lap band procedure done for weight loss. A couple of weeks after it was done, she received a call from the facility saying her insurance claim had been denied because her coverage had lapsed, and she owed approximately $22,000 for the procedure. Wow! Well, there had been a problem with payment and her group plan was terminated. She and I both called the carrier and got it straightened out, as the coverage was not supposed to be canceled. The facility needed to resubmit the claim, and it would be paid.


The next day I received a very nice call from a claim rep at this carrier saying that the claim had been recalculated and a check in the amount of $3804 would be sent that day. That was the ‘negotiated’ rate, down from $22,000. My client may have been able to negotiate a few thousand off herself, but one reason the insurance companies get strong rates overall is volume. Individuals can try but rarely do they have the ‘volume’ to get the better rates.


Just recently I had something similar happen. I went in for a physical and had the usual plethora of blood tests done. The lab bill alone was $484.50! But the ‘insurance discount’ was $385.25, so I ended up paying $99.25. You can’t tell me the lab isn’t making some kind of profit on this. So when you hear about all the debates in health care reform need to find a way to contain costs, keep these two examples in mind. Remember, it’s not only the insurance companies that are in this for the money–Be well!



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