Can You Trust Your Health Insurer?
Navigating the healthcare system can be an intimidating task, filled with bureaucratic complexities and unexpected costs. Traditionally, individuals relied on their employers or health insurers to guide them through the maze of healthcare, acting as intermediaries with medical providers to ensure that medical bills were fair and manageable.
However, recent investigations have unveiled that this dynamic may have shifted, with insurers and employers negotiating deals that primarily benefit themselves, potentially leaving patients to face substantial medical expenses. A critical area where this issue becomes apparent is in the case of out-of-network treatments. Patients might choose or need to receive medical care from providers outside their insurer’s network for various reasons, including when traveling away from home.
In the past, health insurers would negotiate with out-of-network providers to lower the charges to a reasonable level. Yet, it seems that the approach has changed, with insurers now focused on reducing their payment share, sometimes leaving patients responsible for a large portion of the original bill.
For example, situations have arisen where an insurer negotiates its share of a bill from $10,000 to $3,000 and leaves the patient to cover the remaining $7,000, as opposed to a more equitable split in former times. Shockingly, in some documented cases, patients have been left owing over $100,000 after the insurer settled its part.
A part of the challenge is attributed to some providers demanding fees significantly over the Medicare rate, leading sizable insurers to use services like MultiPlan. MultiPlan uses algorithms to decide on a “reasonable” charge for out-of-network services. While this might streamline negotiations, it often results in insurers and employers covering their share while patients are left with the highly inflated original bill.
This unfolding scenario prompts a significant question: why is the healthcare system evolving in this manner? Several factors contribute, including laws that prevent discrimination based on health status for enrollment while not addressing the resulting financial dynamics. As employers and insurers grapple with the cost implications of enrollees with high healthcare needs, incentive structures within plans have shifted. Now, plans are increasingly designed to appeal to healthier individuals, potentially dissuading those with significant healthcare needs from enrolling.
Often, employer health plans and policies found in the insurance marketplaces reverse traditional insurance wisdom. They offer low or no cost for minor services but impose high out-of-pocket expenses for significant healthcare events like hospitalization. Such structures can expose individuals and families to steep financial risks should serious health issues arise.
Consider the case of federal employees’ health plan options, where a more comprehensive plan attracts a higher monthly premium but still leaves families vulnerable to high deductible payments if hospitalization is necessary.
The issue extends into the marketplace plans established under the Affordable Care Act, often referred to as Obamacare. These plans might offer preventive care at no cost and have affordable premiums for many, but they come with high deductibles and typically cover very little or nothing if care is sought outside the insurer’s network.
While it’s convenient to point fingers at private health insurers and employers for these circumstances, the root of the issue lies deeper, stemming from government policies that have created these perverse incentives. To achieve a more equitable and effective healthcare system, we need a reevaluation and reform of these policies. One proposed solution is to incorporate a risk adjustment mechanism, similar to that used in Medicare Advantage, to make patients with higher healthcare needs just as financially appealing to insurers as healthier individuals.
In conclusion, trust between patients and their health insurers is crucial, yet the current trends and practices in the healthcare system are eroding this trust. To rebuild it, we must address the underlying policy issues that drive these practices, ensuring that everyone has access to affordable and equitable health care, regardless of their health status.
