Ever since publishing, How To Get Health Care Subsidies Under The Affordable Care Act, I've been feeling a little left out. In order to help others get health care subsidies, my family has been paying our full health care costs.
It is an honor to help others, so I don't mind. However, after not visiting a doctor for five years and paying about $100,000 in health care insurance premiums, I decided to see if I could get my money's worth.
For three months, I tried to get more health care coverage per month than what I was paying. But I fell short. This failure to get my money's worth is one of the reasons why I've decided to downgrade my plan to Gold from Platinum.
Getting Enough Health Care To Warrant The Cost
In 2018, my family paid $1,760 for a non-subsidized platinum healthcare plan. This adds up to $21,120 a year after tax.
Given there were three of us, my health care expense share was $587 a month. For five years, I hadn't seen a doctor. So I decided to do the following:
- Get a full physical
- Get a chest x-ray
- Go to see my primary care physician for a cold
- Go to the orthopedic surgeon to get advice on my shoulder, elbow, and knees
- Get an MRI for my knees and right shoulder
Surely, I was going to get my money's worth with these five things!
Month #1: Getting A Physical
Before 2018, the last time I got a full physical was in 2013 when I was 36 years old. They say after you turn 40 you should get a physical every year. And after you turn 50 you should get a colonoscopy.
The estimated cost of the physical was $300, not enough to cover my $587 monthly share of health care premium costs. What I later realized was that getting an annual physical is free – no co-pay or co-insurance. A physical is considered preventative maintenance that is offered for free with most plans.
Therefore, for five years I had given up this free benefit worth $2,100. But that's OK. I'm happy to not get physical because physicals are no fun.
Month #2: Went To The Doctor For A Cold
After I got a physical, I got a cold the next month. Instead of just resting and drinking plenty of fluids like I normally do when I have a cold, I decided to pay my doctor a visit. The doctor's visit cost $100 plus a $20 co-pay.
I was having trouble unconsciously breathing after speaking more than a couple sentences. When I was a kid I had asthma and it felt like I was relapsing a little. Instead of just waiting out my cough, I asked him for a script to do a chest x-ray.
The chest x-ray cost $400 and there was 20% co-insurance so I had to pay $80. Thankfully, nothing sinister showed up in the chest x-ray and my breathing eventually got better.
The total value of my second month of trying to get my money's worth was about $500, still $87 below the cost of my monthly premium. So close!
Month #3: Visited An Orthopedic Surgeon
In the third month, I decided to go to an orthopedic surgeon to check out my right shoulder and left knee.
In 2003, I went to an orthopedic surgeon to see why my knee buckled occasionally when I walked up stairs. We did an MRI and it showed I had a small meniscus tear. But the ortho didn't recommend surgery if I wasn't in chronic pain. So I decided to skip surgery and see if my knee would get better. It did.
For my health care experiment, I decided I wanted to get a checkup on my knee. Further, my right shoulder started clicking and was sometimes uncomfortable to hit a high topspin forehand or serve. Throwing a softball didn't feel good either.
The orthopedic surgeon visit cost about $150 for 15 minutes of his time plus a $20 co-pay. In the end, he wanted to give me two cortisone shots. One for my knee, one for my shoulder. I decided why not! If that's what the doctor ordered, I might as well listen.
Each shot would cost my insurance company about $250. At last! I was finally going to get my money's worth for the month!
But when he came back with the two big needles and I saw the amount of cloudy fluid in each syringe I chickened out. Come on now. I wasn't in that much pain. Further, I did some Googling while he went to prepare the shots and found some iffy feedback.
The Cost Of An MRI Is Absurd
Given I passed on the cortisone shots, I asked my doctor if I could get an MRI on my right shoulder and left knee. I wanted to see if there were any issues first before deciding on treatment. He said no problem.
However, the ortho said he would request for the knee first and then another one for the shoulder in three months. He said based on experience, insurance companies often deny more than one MRI at a time.
I discovered from the MRI billing department that each MRI cost $3,500. WTF?! But score! I was finally going to feel great about my health insurance premiums.
I was about to go to the MRI center when my wife knocked some sense into me. She said, “You know we have a co-insurance of 20% right? Better check our insurance provider to see what your out-of-pocket cost would be.“
I did what I was told and I found out I would have to pay $700 out of pocket (20% of $3,500). Damn, foiled again! I cancelled my appointment and decided to wait until I was in significant pain.
I could have received about $4,000 worth of medical care in month three. In the end, I only received $150 worth of care from my one orthopedic surgeon visit. The 20% co-insurance really does save insurance companies money.
If my share of the MRI cost $200 or less, I probably would have gotten one. 10 years is a long enough time to wait.
The Affordable Care Act Is Expensive
Unfortunately, the Affordable Care Act has done nothing to keep my family's health care costs affordable.
The same Platinum plan that cost us $1,760 in 2018, would now cost us about $2,160. That's a 23% increase, which is supposedly relatively good.
But given we have another child, the Platinum plan now costs $2,532 a month for a family of four! We decided $2,532 a month was too much and downgraded to a Gold plan instead for $2,212 a month.
To save money, we will maximize our “free” annual preventative care visits. I'm assuming we can save money by going for an annual checkup when one of us has some health issue so we can get two consultations for the price of nothing. The better the relationship you have with your doctor, the easier it is to slip some health-related questions during the physical examination.
If we are lucky enough not to have a health issue that requires seeing a doctor, then we'll each get an annual physical anyway.
To save money, we will also pre-order 3-months worth of prescriptions by mail during the last month of our existing plan.
Given the ACA is so expensive for us, I do wonder whether we have any downside if the ACA was abolished. But again, we must think about the greater good.
I'm just going to focus on continuing to build my passive income by another $30,000+ to cover our ever-rising health care premiums.
The Solution To Affordable Health Care
There is one solution to lowering your health care premiums worth considering. Invest in your health insurance provider's stock. After all, if you can't beat them, join them.
I decided to invest in UnitedHealth Group (UNH) five years ago as a hedge against rising health care insurance costs. So far, the investment has worked out. Unfortunately, I didn't invest nearly enough. Take a look at the chart below.
UnitedHealth Group will generate over $240 billion in revenue a year. Further, UNH's CEO, David Wichmann makes about $20 million a year, which includes stock compensation.
The health care system is meticulously set up to extract as much money from you to make health insurance companies and health care providers rich. Therefore, you might as well invest in these atrocious beasts.
It's Best Not To Get Your Money's Worth
Although I've paid far more for health care insurance than I have received in health care benefits, that's a good thing. None of us should want to get sick just so we can get our money's worth. If you don't have a pre-existing condition that costs a fortune to regularly treat, be thankful.
Instead, for those of you who are paying high premiums, it's best to just accept that it is your responsibility as patriotic Americans to subsidize the poor and less healthy. Chant in your head, USA, USA, USA every time you get you massive health care bill. If you can make money from your health insurance company's stock, even better.
Yes, it is kind of irksome there are multi-millionaire early retirees who are receiving health care subsidies. We know subsidies are not meant for them, yet they still take advantage. However, feel good knowing that at least your income is high enough to provide for a more comfortable lifestyle.
Unfortunately, everybody's health care premiums will likely continue to go up by at least 6% a year. Even if you are an employee with tremendous health care subsidies, this cost to the employer comes out of your paycheck.
All of us need to do our best to eat better, exercise more, and work on our mental health. Too much stress does a body bad. We also know 7+ months into a pandemic that COVID-19 is much harsher on those who are obese.
When You Need Health Care, Go
If you are experiencing significant health issues, forget about the cost of co-insurance and your co-pay. See a health care provider ASAP. Call 911. Go to the ER. Take that ambulance ride, no matter the cost. Your bill will be expensive, but at least most of the cost should be covered by health insurance.
Chances are high that you won't need to repeatedly go back and see a doctor for your health issue. Make those one-off visits count. If you do need to see your doctor for many years, then at least feel good knowing that you're finally getting your money's worth.
Last Piece Of Insurance Advice
Don't forget that every time you get treated for a health issue it will be recorded on your medical records. If you are looking to get a new life insurance policy or renew a life insurance policy, you may get hit with higher rates.
Because I wanted to check out this new sleep center years ago, I go riddled with sleep treatments that ended up jacking up my life insurance renewal rate. Therefore, make sure to get life insurance before seeing a doctor. You'll likely save a lot on your life insurance premiums if you do.
Recommendation: If you're looking for affordable life insurance, check out PolicyGenius, my favorite life insurance comparison site. PolicyGenius enables you to get the best coverage possible at the best price. My wife got double the amount of life insurance for less with PolicyGenius. I'm in the process of getting a new term life insurance policy since my 10-year policy is running out in a couple years.
Readers, have you ever got your money's worth for the health insurance premiums you've paid? If so, maybe you can share what your bill cost. Do you think there is any solution to keeping health insurance premiums from rising?
I used the Bronze plan when I was not working some time back. Even the bronze plan is not cheap without subsidies. If you’re generally healthy and have no pre-existing conditions, you should be able to get by with Bronze or even the HDHP plan (so you can use HSA!). If something develops, accept you’ll take a financial hit for a year but you’ll be able to switch the following year.
Hi Sam there’s few points that you may find useful coming from a physician
1. MRI at $3500 and CXR at $400 is absurd for outpatient imaging center, this is probably uninsured price as somebody else commented already, make sure that the imaging center is in network which means contracted with your insurance company and provide your insurance information then have them give you a breakdown of the price
2. You will not get treated differently whether you have a platinum plan vs bronze plan, the doctor or facility will get the same total contracted price after you pay your part
3. Screening colonoscopies should be once every 10 years, unless there is family history of cancer or some other condition that makes you more risky.
I agree with you that I would much rather be the one paying the premium and never “get my money back” . As a self employed, we pay $1260 per month for a family of 3, 45, 44 and 11. PPO, individual/family deductible $6750/$13500 which is the same as OOP max. This is a catastrophic plan as insurance don’t pay a dime until I reach my OOP max (except for preventive care, which is “free”)
Thanks Doc. I wonder if the imaging center just gave me the rack rate, and would ultimately charge less. But that wasn’t a gamble I was willing to make.
And you know what? Maybe I’m remembering wrong like Memento… maybe the $3,500 was for TWO MRIs since I wanted to get two done in one go. But 20% of $3,500 was still more than I was willing to pay.
I’m glad I at least downgraded to a Gold plan…. baby steps!
My wife had cancer at 18 and considering the limb salvage surgery, ankle surgery, lung surgery, months of chemotherapy, 18 months of preventative therapy, countless office visits, etc. I presume her father got back every penny he paid in his lifetime. But I also imagine he would have gladly paid out his whole life without having his daughter go through what she did.
Any serious injury or disease will eat up years (or a lifetime) of insurance premiums in an instant.
But for most healthy people, thousands and thousands shelled out along the way with very little return, but that’s a good thing. My wife and I hope our $3,300 in life insurance is also something we we never see a return on, same as auto insurance or all our other insurances for that matter. Our health insurance is covered at work, but I hope the other $7,000/yearly in insurance (auto, life, homeowners, umbrella, etc.) never sees a return.
And as far as premiums and excessive costs go, the medical industry, groups, and companies behind it all are so large with so much lobbying dollars at their disposal that I doubt anything drastic changes in the near future.
Healthcare is the biggest scam ever on the American citizens.
They get away with it because of all the lobbying with the government for all kind of regulations. Free market will solve this but unfortunately we don’t have any more free markets in this country.
That MRI doesn’t cost $3500, it costs less than your $700 copay , about $300 but the insurance company still need to make money on your copay.
I take the cheapest plan, i consider it as a catastrophe Insurance policy, it only makes sense once you reach your deductible of about $6500 per person per year.
In 2018, my family paid $1,760 for a non-subsidized platinum healthcare plan. This adds up to $21,120 a year after tax.
—————-
What was the deductible? What was the out of pocket max?
Those are just as important pieces of information as the premium.
Good question! $3,500/$7,000 out of pocket max for individual/family, which includes deductible. But I gotta check what those deductibles were. They were very low. What do you think?
That sounds reasonable considering you were paying $1,760/month in premiums.
How about dental/vision? I assume those were not included. Did you purchase separate plans for those? If so, what were the costs?
Cool. How much do you pay a month and what is your plan for how many people?
Health insurance is much like any other kind of insurance.
Take life insurance. You are betting you are going to die. The life insurance company is betting you won’t. Who do you want to win?
True… but life insurance is DIRT CHEAP compared to health insurance.
Cost is the big variable that many are struggling with.
The irony is that despite the low cost, way less people get life insurance.
“And after you turn 50 you should get a physical every year and a colonoscopy.”
Who told you to get a colonoscopy every year?!?!?
I find it truly amazing how the cost of medical imaging varies all over the place. The most expensive place you can get imaging studies is in a hospital setting.
I can tell you that at my place a cxr is under $100. As a radiologist about 1/3 of that is billed as a professional component (ie the compensation to the actual physician reading it). 2/3 of the charge is the technical component (ie the payment to the facility that owns the equipment and pays for staffing and maintenance of said equipment).
Even the MRIs we provide clock in under $1k for the vast majority of studies (off top of my head I think a knee MRI would be maybe $600-800).
So definitely shop around and see what the various pricing you can find (of course your choice may be limited to those in network places. Even so you may find something out of network that the net expense is less than going in network)
Sam, I was unable to reply to your last comment directly, so I’m addressing your questions in a new comment here.
I guess my question is: why are there so many medical insurance horror stories about massive bills people/families end up being billed for even if they have insurance? I’m pretty sure all these disaster stories don’t have people on Silver, Gold, or Platinum plans.
Every health insurance disaster story is different with their own special nuances, but generally, I think this is mostly due to individuals either obtaining healthcare services out-of-network, or individuals receiving services that are all-together not covered under the plan provisions. The out-of-pocket max peace of mind I mentioned previously only applies to in-network covered services.
In either plan, out-of-pocket maximums only apply to in-network services. Additionally, under the same health insurer, each plan likely covers the same in-network benefits – the only difference is the level of coverage: deductible, coinsurance, copays, out-of-pocket max and the premiums. Basically, if you are in one of these disaster situations, you may be screwed whether you have a platinum plan or catastrophic plan.
The other question is: if Gold and Platinum plans are such poor value, why do they exist and why do people get them?
I’m not saying Gold and Platinum plans are poor value for all individuals, but based on the background you’ve provided about you and your family, and the fact that you’re questioning the value yourself, they may be poor value for you. Here are a few reasons why rich plans exist and why people select them:
• Most individuals are inherently risk-averse.
• Individuals tend to prefer to pay a higher known fixed cost vs. a more variable unknown cost, even if there is a high probability that the variable cost ends up much lower.
• Individuals naturally suffer from inertia. People don’t like change. So whatever plan they are currently in and comfortable with, they will stick with, even if it’s not to their best advantage.
• Older and/or sicker individuals.
• Individuals that consistently hit their out-of-pocket maximums and expect to in the future.
The last bullet is a simple and key benchmark to consider. I think it also covers the majority of the reasons you listed for individuals well-suited for a Platinum plan in your previous post, Is A High Deductible Health Plan Worth It So You Can Contribute To An HSA.
Some questions worth considering:
• Have you ever hit your out-of-pocket max?
• How many years have you hit your out-of-pocket max?
• Did you hit your out-of-pocket max during your wife’s pregnancy and is your family expecting another pregnancy?
It may be worth modeling total healthcare costs: premiums, deductibles, coinsurance, copays between a Platinum plan and a Catastrophic plan. The worst case and best case are quite easy to determine. Worst Case = (premiums + out-of-pocket max). Best Case = (premiums-only). Medium Case = something in between. Attach probabilities to these three scenarios and compare. I’d be surprised if the Platinum plan yields a higher value for an individual/family with low to average expected healthcare spend. You mentioned yourself that you didn’t even see a doctor the last five years while paying top dollar for a Ferrari plan.
If you’re not continuously hitting the plan’s out-of-pocket max, you are paying extra to subsidize costs for less healthy individuals. Technically, anyone with low or no healthcare spend is subsidizing costs for less healthy individuals in the pool regardless of plan; however, if you’re forced to subsidize others, you may as well minimize your premium contribution.
Lastly, insurance companies are certainly smart enough to understand that these Platinum plans attract adverse selection from individuals expecting to have high healthcare costs. The extra risk is of course priced into the premium. Why pay for this extra risk charge if you’re unlikely to be one of the individuals benefiting from it?
Of course, a wealthy individual is fine with either plan, but I feel that a healthy individual selecting a Platinum plan is essentially throwing $20K away in the trash annually. I think a strong capital allocator like yourself could find much more productive uses for this money.
Good questions to think about. Maybe I’ll make it into another post when considering Gold and Platinum plans.
I’ve gone down to Gold and it feels good paying $300/month less in premiums. If all goes well, maybe i’ll go down to Silver the next year, and then Bronze etc. Baby steps!
I would love to read your review of gold vs. platinum plans. Also your reason for avoiding the bronze plan. Health insurance is a big reason my wife doesn’t want to retire from her day job, ironically at a large health insurance company. Our coverage isn’t better or cheaper than other large employers, but it does seem better than ACA.
Sam, I love you, and that’s why I’m going to tell you the Dr. wrote an “order” for your MRI, not a script.
A script is short hand for a prescription or treatment.
Faithfully yours,
T. Flynn, BSN, RN
Right on. Changed.
I’m surprise no one has challenged this post on two points –
1) The MRI would not have cost you 20% of $3500. Your insurance would have had a negotiated rate, say $700. So your 20% would have been $140, which I suppose would have made you feel better as you would have felt that you somehow came out ahead. Same thing goes for the x-ray. It seems your numbers are more in line with someone who is uninsured.
2) So you go to doctors to get a diagnosis and a treatment, only to second guess the doctor by using Dr. Internet?
This post seems like disinformation.
This comment is a good point. Hospitals can ask for any amount they want from an insurance company. Insurance companies never pay the whole amount. Some companies pay 40 cents on the dollar and the worst payers pay like 17 cents on the dollar.
Even if you are a private payer, you can call and negotiate bills. Hospitals would rather get some than none.
The high cost in healthcare is primarily from the hospitals and hospital related services (Admissions, surgeries, lab and imaging owned by hospitals). A ct or mri is usually 50% less at an independent (non hospital affiliated) imaging center.
If your experiment would have interfaced with a hospital superbill with the many inflated, non-transparent charges you would have “got your money’s worth” no doubt.
Hospitals have to cover emergency care. They have to have staff available 24-7/365. They have to have a cafeteria,usually, and have full time staff to keep it clean. There are many costs associated with a hospital that are non-revenue generating. Thus, the difference with most outpatient facilities.
Hi Sam,
Interestingly, our son was self-employed when the ACA kicked in. He had 2 children then and one on the way. (He has 4 great kids now:) Not only did his premiums skyrocket, but they had to give up their beloved pediatrician, and he and our daughter-in-law were unable to find any pediatrician within 100 miles who would even take their kids as patients under the ACA! He finally was forced to take a different job and quit working for himself so he could have healthcare for his family. Premiums and drug prices were unsustainable under the ACA for many people. It really does need to be repealed and replaced with something sustainable, in my humble opinion.
Yes, I do wonder how it could get much worse if ACA was repealed. But for people who are receiving tremendous subsidies… it may indeed be a bad deal.
Your challenge in understanding the value is stemming from not having to deal with a truly chronic condition that requires extensive medical management. It can get a lot worse without the ACA for many people.
Look up hydrocephalus as an example. Most of these kids end up needing numerous brain surgeries, which cost $100k+ each, to live a functional life. The main treatment is a shunt that does not last a lifetime and is an invasive surgery to replace.
Without the ACA, these are “pre-existing conditions” and good luck getting insurance if you aren’t fortunate enough to work for a large company that offers it to everyone.
This is different than people living sedentary lifestyles and eating fast food daily ending up costing the healthcare system a fortune to treat their diabetes. There are literally millions of people, who through no fault of their own will need expensive care that would blow your annual caps up consistently.
If you get to know some people in that camp it may change your perspective a bit.
It’s similar to how I used to look at social security until I had a chance to learn just how woefully unprepared most people are to invest in themselves for the future. This might resonate with you as well after spending so much time trying to educate people about personal finance. This country needs some strong safety nets to protect those who rightly or wrongly got left out of the world of capital gains.
True. “But for people who are receiving tremendous subsidies… it may indeed be a bad deal.” So I do realize it’s not ideal for those who do receive subsidies. I also say so towards the end of the post.
I think it’s our duty to help others by paying higher taxes and higher health care premiums. There is just a threshold where there will be pushback and eventual cheating of the tax system or figuring out a way to get subsidies as well, despite having multi-millions.
How much do you think is too much to pay for a family of four? What should the cost be dependent on? I feel that $2,500/month is reaching a orange/red line. Hopefully people who do get tremendous subsidies can also understand it is partially due to people who pay the maximum.
How much do you pay in health care insurance a month? And does your child have a chronic condition like hydrocephalus? If so, I’m happy s/he is getting medical treatment. Please tell me more about yourself so I can understand where you are coming from. Thanks
We pay about $1,000/mo with a $3,000 in-network out of pocket annual max for our family of 4. We have locations all over, so most systems are in-network for us. We are in the lucky insurance crowd as I work for a F500 company.
I do wholeheartedly agree the cost of healthcare in this country is absurdly high. We’re approaching 20% GDP spent on healthcare, excluding current pandemic spending.
There are some interesting things happening in the industry to try to mitigate the ballooning costs. You basically have have to either stop treating people (like repealing ACA and minimizing availability), deliver care cheaper (reimbursement and/or quality of care cuts), or lower the healthcare needs (improve general health).
The first option is cruel. The second forces efficiency in the system but needs to be managed. That last option drives costs down and actually helps the population.
Capitated medicine is blowing up as a result, particularly in your home state of CA that is on the forefront. Basically, insurance companies are transferring risk down to providers for a fixed rate. This does a couple things:
1) things like telemedicine make sense. It’s cheaper and many issues just need to be talked out. I’m fee for service, this would result in lower reimbursement since it costs the provider less and you’d end up being told to waste your time driving to the office.
2) because the providers get paid a rate whether you show up sick or not, your primary care doctor now has vested financial interest in helping you prevent things like diabetes versus just running through the motions and billing for every test they can get away with (not all docs will do this, and you know which if you hear them telling you it’s hard to make money in medicine generally).
3) patients generally have no idea what costs are for various facilities. When your doctor network has to financial incentive to lower your care costs, your referrals all of a sudden are to lower cost facilities that will spur price wars to attract patients.
Capitation has had mixed results in some areas and kinks are being worked out, but overall it has shown to effectively lower cost of care without sacrificing quality (by including quality based rate modifiers to keep with the financial motivation theme).
The point is that we can decouple a little bit healthcare spending from healthcare insurance as they have unique drivers that independently result in you paying a crazy premium.
The solution is delivering care more efficiently and educating people about healthy lifestyles that will reduce prevalence of preventable chronic diseases. Insurance rates will follow general health trends.
I say this as a senior healthcare investment banker.
To answer your other question, yes one of my sons does have hydro. We were incredibly fortunate to be able to fly him to Boston Children’s for a etv/cpc that, knock on wood, may result in a shunt free life for our son. We met many families since in similar situations who did not have same access to care over costs and it sickens me to watch these kids suffer and knowing full well at least some of them could have my son’s outcome if they could afford it. We ended up paying something like $20,000 including all the travel costs to have him treated (mostly because Boston is expensive and not our insurance). He’s subsequently had 100’s of pt/ot/speech therapy sessions to get him back on track. I stopped tracking his total cost of care, but it was north of $250,000. I’m very blessed to be able to afford to pay that if necessary out of pocket. I can very proudly say my son is living a completely normal life and you’d never know he had an issue if you weren’t told.
We started a non-profit around it after our experience and have met many families with children in the same boat. It has been beyond eye opening to see how people don’t have the same opportunity to get treatments depending on where they live or what insurance they have (unless they are wealthy).
By the way, great site. I love reading about finance from someone that actually understands the subject!
I’m glad your son got great treatment! I am onboard for everybody getting health care because health does not discriminate between rich and poor. At the extreme, why should someone wealthy get to live while someone poor with the same issue dies. That’s not fair.
I work for the government so I pay $497 a month as a single 27 year old for my insurance. It is quite good coverage though.
Earlier this year I had a rabies scare and went to the ER for the vaccines. The rabies vaccine requires several visits/injections so it cost over $10K but I only paid $100. Luckily my insurance has paid for itself and then some this year which I’m very grateful for.
I always go for my annual OBGYN appt and also get a blood test, which my insurance covers.
Otherwise, I try to avoid the doctor! Investing in the insurance is a good idea!
Next months post: Sam “extracts more value” from his wasted car insurance/umbrella policy premiums by taking the Range Rover to a demolition derby!
Kidding aside, you’ve touched upon the central policy and legal issue in the ACA which is forcing people to pay for insurance when they are healthy (vs just getting insured later when sick) and setting rates where the young/healthy/wealthier subsidize others. I tend to think it’s the way it has to be for a well-functioning society. Interesting to see the firsthand psychology through your post, thanks for writing it!
Also with two births, maybe you aren’t doing as poorly as you think – that’s probably around $30k right there?
If only health insurance was as cheap as car insurance and an umbrella policy!
Incentivizing Americans to get healthier by providing health insurance discounts is a no brainer. Preventative medicine is a no brainer. But the natural course of action is to not exercise and eat beyond what one needs because we are overall a rich, service-oriented nation. Further, insurance companies and health care providers want to make max money in our capitalistic society.
I think the average cost of on birth is $11K without complications and up to $30K with complications. Therefore, yes! I’m glad we got some benefits!
Come to the UK – MRIs from $250. That’s privately, not on the National Health Service, where they are free, but you might wait a while.
Spend the rest on first class tickets and a holiday. Maybe not right now though…
Not a bad idea. Will the doc see me if I just make an appointment and pay with cash?
Even the $700 co-pay means I have $450 left over for the flight. Good idea.
Fun analysis. I would have chickened out of those cortisone shots too! I haven’t used health or dental insurance that much this year for myself.
The pandemic scared me away from going to the dentist after they canceled my spring appointment. But I did go get a routine check up with my doctor this month and get some lab work at least. My kids have gotten all their routine exams though so that’s good.
I oddly felt safer going to the pediatricians and my doctors office than in the past because people are being so cautious.
The milky fluid in very big syringe tubes is what made me think… hold up a minute! haha.
Thanks for reminding m to brush and floss more. I, too, skipped my 6 month checkup and don’t want to go back. I got cool dental-grade tools to remove plaque myself.
Sam, get the shot it is painless as they spray the area before injection. Had it in my shoulder and was out of pain within hours, the pain hasn’t come back in over 4 years.
If your wife is still working, why don’t you allow her to sign up for family health insurance at work. It will be cheaper and saves you lots of money, since her work facility will be paying half the cost of the health insurance.
Wife hasn’t worked since 2015. Not on the WiFI plan!
I tried my best to convince her to go back to work after 6 months with each child, but she said no. All good. I’m happy she loves to take care of our children before they go to school full-time.
This is why we need to cut out the middleman. Have the whole country on one plan so doctors and hospitals have only one payer source and maybe give people money back at the end of the year if not all the premiums are used… Medical care is expensive but why should insurance companies benefit at all?
I don’t know if this is legit or not, but I’ve been able to negotiate my way out of paying deductibles on repeat visits. Sometimes they’re happy to take whatever your insurance pays them. I think this occurs less with the popularity of the High-Deductible plans.
I like the idea of a catastrophic plan and saving money into an HSA. You might be able to get more “cash price” services as well.
Sounds legit to me. Everything is negotiable!
I’m surprised you didn’t have to pay deducible first for most of those expenses.
Indeed. A low deductible or no deductible is one of the benefits of a high tier plan with high premiums.
I recently investigated a basic plan cost (in Canada) for dental care. Anyway, it was about $2500 annually but the coverage wasn’t great so we decided to take our chances.
I used the U.S. system once for an Emergency in Hawaii 3 years ago- and didn’t have travel insurance. A visit to the doctor cost $200 + $50 for medication. If I didn’t improve I would have needed to attend the E.R. and was quoted at $2000. In this case delaying care was not an option, but lesson learned- you never know what’s going to happen.
FS, here is some unasked for advice, which you will not take.:-)
1) follow Joe’s suggestion, and get a vasectomy.
2) Get the cortisone shots for shoulder and knee, which will allow inflammation to recede while you are recovering from #1.
3) do crunches (not sit-ups) and strengthen your core. This is where the power for serve and throwing comes from, but 99% of us are lazy and use lower-back and shoulder. You will find the pain in back and shoulder recedes once inflammation goes down and you use your core.
Also, Matt’s ‘catastrophic plan’ is great for otherwise healthy people. That $100,000+ would have been about $30,000.
As for meniscus and rotator cuff orthopedic clean-up, I’ve never met anyone over age 25 who got the results they hoped for. If you change your serving mechanics to a slow-spin and your throwing mechanics to a 3/4 motion, you can keep the inflammation down and still play. And Advil is your friend! Hope you feel better!
Thanks. However, how does one have children if one gets a vasectomy?
Storage.
Thanksgiving is coming up, turkey basters are on sale!;-)
It’s called Health Insurance not Health Care for a reason. You only insure what you can’t afford to lose, and many SERIOUS health needs will cost you hundreds of thousands of dollars! Doctors and capitalists like to make good money off of this fact!
I agree. Too bad insurance cost so much partly bc health care costs so much. How much in insurance premiums are you paying a month or a year?
this is a terrible take. Doctors don’t make money “off” health insurance. Doctors make money caring for patients. Health Insurance employees and investors in Health Insurance companies make money off insurance.
I have been getting an annual physical every year. It’s quite good. Other than that, I haven’t needed anything recently which is great. From 2010 to 2012, I saw the doctors very often. I got all kind of checkups and tests. I had dizziness and my heartrate was super slow. It was all stress related because I haven’t had any problem since I retired from my engineering career. For those 2 years, I probably got my money’s worth.
This year I’ll ask my doctor about a vasectomy. Might as well get it done while we have insurance, right?
Ouch. Let me know how that vasectomy goes! I would think with your wife in her mid-40s, you don’t have to worry. The chance of getting pregnant in one’s 40s is less than 5%, even if you guys are trying within the monthly window!
Maybe I should write a post about it…
I don’t think we have to worry much either, but she gets stressed out about it.
She really doesn’t want another kid.
Don’t let the hype deter you, It doesn’t hurt that much. Just ask for a leather strap to bite down on and skip the local anesthesia (that was the worst part of the process anyway). Drink some bourbon when you get home. And look forward to years of no pregnancy risk ahead of you.
I went mountain biking the next day.
haha, nice.
I guess the hole thing is… the big shots better be less painful than the pain I feel in my knee and shoulder. Otherwise, I’ll pass until the equation is flipped!
Sam,
You should get a catestrophic plan and drop your premium health insurance. You keep enough cash on hand to cover your basic medical needs. The $8,000 deductible on a catastrophic plan will not hurt you.
Sounds good. Is that something you have for your family? If so, what is the monthly premium? Thanks
Yes I have this for my family. If memory serves its currently approximately $800 per month. The premium increase coming in 2021 is only 3% more than 2020. Family composition is as follows:
Me – 39 male
Spouse – 37 female
Son – 6
Son – 5
Daugeter – 2
Thanks for the color. $800/month sounds pretty great! So, $1,400/month less, or $16,800 less. Seems to make sense. I’m just fearful that we might get treated differently with a bottom tier plan. Perhaps it is unfounded, but the stories I’ve read everywhere are concerning. Or maybe this is my own psychosis.
I’m hopeful that with a Gold or Silver plan… it covers all these random loose ends that a patient would never think about. This constant cost surprises is due to health insurance being so complicated. It’s like taxes. There’s always at least one error/deficiency.
While that is certainly possible healthcare providers will treat you different because of your insurance plan, it has not been my experience. For Example:
In April this year my 4-year-old son had a major accident. He was airlifted to the nearest children’s hospital, $27,500 ambulance. Between the hospital and all the specialist who treated him, the bill was $75,832. I never had any inclination that we were being treated differently because of our insurance plan. The hospital and staff were exceptionally caring and helpful.
My responsibility was up to our single member out-of-pocket maximum; $6,350. My plan’s family out-of-pocket annual maximum is $12,700.
Yikes, glad your son got help. You’re right… these emergency health care providers are focused on saving lives. The billing and all that is not in their heads while servicing.
It’s when patients have to deal with the health insurance administrators later that might be painful.
I’m paying up to try to eliminate any unknowns. That’s the irony of being able to afford a catastrophic plan.
You can afford the massive deductible, but you can also afford the high monthly premium. So it’s kind of like pick your poison. At this time, I place a massive premium on peace of mind. The higher tier plans provide me more peace of mind so that is where I’m going.
Sam, I’ve been a big fan of your site for many years. I’m a healthcare actuary and I completely agree with Matt’s suggestion. Matt – I hope your son is recovering and doing well!
The title of this post basically corroborates the fact that you haven’t been getting value from your super-rich platinum plan. Rather than spending your way into making this plan “worth it” for you (which, by the way, only increases the premium requirement for you and the other members in your insurance pool next year), why not pay less for a higher deductible plan since you and your family are relatively young and healthy?
Simply put, it’s like you’re paying for a Ferrari that’s collecting dust in your garage while you mostly walk or ride your bike. Why pay such a high premium for something you’re barely using?
A high deductible plan should provide you with the same peace of mind. The only difference is you’d be throwing away much less money for nothing:
1) You’re wealthy and can afford the higher deductible & coinsurance costs in the low chance that you’d incur those costs.
2) You could contribute the family maximum of $7,200 in 2021 to a Health Savings Account (which I’m sure you’re aware, is triple-taxed advantaged).
3) The HDHP can offer you the peace of mind you’re seeking – knowing that the maximum out of pocket (deductible, coinsurance, copay spend) is capped at $14,000 for a family plan in 2021. If anything, I’d be losing my peace of mind knowing that I’m throwing away $20K year after year!
To sum it up, the worst-case scenario in a HDHP does not seem that much worse than the default/guaranteed scenario in your super-rich platinum plan. The worst-case also appears to have a very low probability of occurring considering the health status of your family.
Anyways, thank you for all your work on this site. I’ve learned a lot and I appreciate it greatly.
Last thing I forgot to mention is that your fear of being treated differently with a high deductible plan is completely unfounded. No medical practitioner, billing specialist, or customer service rep will treat you any differently if you have a platinum plan or a catastrophic plan. The platinum plan is nothing like a platinum credit card with extra perks. The ONLY perk is lower deductibles and coinsurance costs.
Sam, I’ve been a big fan of your site for many years. I’m a healthcare actuary and I completely agree with Matt’s suggestion. Matt – I hope your son is recovering and doing well!
The title of this post basically corroborates the fact that you haven’t been getting value from your super-rich platinum plan. Rather than spending your way into making this plan “worth it” (which, by the way, only increases the premium requirement for you and the other members in your insurance pool next year), why not pay less for a higher deductible plan since you and your family are relatively young and healthy?
Simply put, it’s like you’re paying for a Ferrari that’s collecting dust in your garage while you mostly walk or ride your bike. Why pay such a high premium for something you’re barely using?
A high deductible plan should provide you with the same peace of mind. The only difference is you’d be throwing away much less money for nothing:
1) You’re wealthy and can afford the higher deductible & coinsurance costs in the low chance that you’d incur those costs.
2) You could contribute the family maximum of $7,200 in 2021 to a Health Savings Account (which I’m sure you’re aware, is triple-taxed advantaged).
3) The HDHP can offer you the peace of mind you’re seeking – knowing that the maximum out of pocket (deductible, coinsurance, copay spend) is capped at $14,000 for a family plan in 2021. If anything, I’d be losing peace of mind knowing that I’m throwing away $20K year after year!
Lastly, your fear about being treating differently with a HDHP is completely unfounded. A medical practitioner, billing specialist, or customer service rep will treat you the same whether you have a platinum plan or a catastrophic plan. The platinum plan is nothing like a platinum credit card with extra perks – the only perk offered is low deductible and coinsurance costs.
To sum it up, the worst-case scenario in a HDHP does not seem that much worse than the default/guaranteed scenario in your super-rich platinum plan. The worst-case also appears to have a very low probability of occurring considering the health status of your family.
Anyways, thank you for all your contributions with Financial Samurai. I’ve learned a lot and I appreciate it greatly.
Good thoughts! I guess my question is: why are there so many medical insurance horror stories about massive bills people/families end up being billed for even if they have insurance? I’m pretty sure all these disaster stories don’t have people on Silver, Gold, or Platinum plans.
I’m trying to simplify thought and action. I wrote this post: Is A High Deductible Health Plan Worth It So You Can Contribute To An HSA. I came to the same conclusion… no.
The other question is: if Gold and Platinum plans are such poor value, why do they exist and why do people get them?
The funny thing about being wealthy enough to have a HDHP is that you are also wealthy enough for a low deductible health plan.
Which plan do you have and how much does it cost?
I’m a physician who does a lot of physicals. If someone comes in with a concern in addition to the physical, we are to bill as a separate visit. It is considered undercoding and therefore fraud to not bill it. So you may not save the way you’re wanting. It saves you a trip but not necessarily the money to have a physical and another concern addressed at the same visit.
Dang, foiled again! But makes me more bullish on investing in health insurance companies.
Luckily, many people have known their PCPs for a long time and have rapport. During the 30-60-minute physical, slipping in some questions like:
* What do you think I should do for the splinter in my thumb?
* What is the game plan if I get COVID-19?
* Any idea what this clicking sound is in my shoulder?… as the doc is checking out you mobility
* I’m having breathing issues sometimes … as the doc is checking out you lungs… what could it be?
Should be fine. After all, you’re getting a thorough physical checkup!
Yes. I just noticed this last physical! We did discuss a few other things, so the physical was coded other services.
As someone who is past the need for life insurance and close to going on Medicare we’ve also paid for five years of high cost unsubsidized health insurance for my wife and me. That’s an interesting take that we are in fact subsidizing others with our high payments. What is a little surprising is how expensive Medicare is. While the total cost of Medicare and the needed supplements for my wife and me will be less than the private insurance high deductible plan we were using it won’t be close to free. In fact it will cost $7,200 per year for the two of us assuming we don’t have a single doctor visit or prescription. That’s almost half of what we were paying for the private insurance so people sliding into retirement in their sixties need to realize Medicare is not even close to being free insurance. And you are dead on about the impact diagnoses can have on insurance costs. We got long term care insurance when we hit age 60 and because I was diagnosed with an episode of transient global amnesia while working out at the gym ( a 3 in 100,000 rare ” “Gray’s Anatomy” kind of thing) our premiums are higher than normal. Even though transient global amnesia is generally considered harmless and nonrecurring the insurance company treated it the same as normal amnesia, which I learned is very serious and correlates to a lot of bad outcomes. The two maladies are completely unrelated but because TGA has the word amnesia in it and because nobody knows what causes it my rate was increased.