We get asked this a lot. The answer to this question is both simple and complicated. Health insurance is expensive because…healthcare is expensive. Your insurance premium is mostly reflective of the rising cost of healthcare. Your premium goes up because of things like medications getting more and more expensive or due to the advancements in science, research, and technology. Modern medicine is miraculous. But it also is expensive. When we are prescribed an expensive drug or go through a surgery using cutting edge technology, while we are grateful for the alleviated pain or quicker recovery times, we may not realize that all of this is contributing to our higher insurance premiums.
So perhaps the better question to ask is why is healthcare so expensive?
One of the biggest problems we have with our healthcare industry is the lack of consumerism. We don’t purchase or consume healthcare the same way that we purchase technology, entertainment, or really anything else. Too often we demand the very best and never pause to consider less expensive alternatives for care. When the doctor in the white coat tells us to do something, we rarely push back, ask why, or ask for a less expensive alternative.
High Deductible Health Plans (HDHPs)
We’ve noticed that those clients of ours who are enrolled in a High Deductible Health Plan (HDHP) and that are participating in the Health Savings Account (H.S.A.) that accompanies it are approaching healthcare expenses in a better way. These HDHP plans are unique because there aren’t copays when you go to the doctor’s office or fill a prescription. All services must first meet the deductible. This leaves the person paying the first few thousand dollars for almost all the care they receive. For those with a plan that is structured like this, we are seeing that they are becoming much wiser and more proactive to find care that costs less. This in turn works to lowering the cost of care for everyone.
Put another way, perhaps it’s time for our health insurance to start looking more like our car insurance. For example, we would never expect our car insurance to pay for our new tires or for an oil change, would we? And yet for many they expect health insurance to cover every little thing. If our car insurance did pay for all those smaller up-front things, I would venture to guess that our car insurance rates would all go way up and the cost for those tires and oil changes would also increase. Because these auto retailers know they must compete for our business, we see innovation and cost containment strategies that work to keep the cost of these goods and services low.
Telemedicine
Now that many more people have these H.D.H.P. or H.S.A. based insurance plans, we see some innovative things starting to happen. As an example, we are seeing more and more the availability of telemedicine. This not only costs less but is a much easier method of receiving care. When you or a family member is feeling sick, it is so much easier to have a consultation with a doctor over the phone rather than going and seeing someone in person. True, the telemedicine doctors can’t diagnose everything in this remote consultation, but there are ways of making it more effective. For example, a client of ours was told that the telemedicine doctor couldn’t treat their child that had an ear infection because they couldn’t look into the ear of the child over the phone. This family went online and purchased an otoscope that they can now use to capture the necessary images so that a diagnosis can now easily be made over the phone. We need more innovation like this to drive down the cost of care.
Prescription Drugs
Prescription drugs are one of the biggest areas of healthcare spending. Again, these lifesaving and life altering medications are truly amazing, but what can we do to be wiser consumers and find less expensive alternatives when we are prescribed an expensive medication? One thing you can do is to ask your doctor if there are any similar drugs that do the same thing but that might cost less. Having that conversation might open up new opportunities that you didn’t know were there. Did you know there are some pharmaceutical companies that incentivize doctors to prescribe certain medications? Often the medications that pay kickbacks to doctors are the ones that cost the most. If your health insurance plan has a low copay for this brand name drug, you might not think to question further, but for those with an HDHP plan, paying for an expensive medication can be extremely difficult.
Have you been prescribed an expensive medication? Here are a couple more ideas to consider:
– Another great underutilized method is to find out if the drug you have been prescribed has a discount program offered by the pharmaceutical company. We find that sometimes you can get the cost to some of these expensive drugs down to free or close to free just by letting the company know you would like assistance paying for it.
– Lastly, we can explore getting the same expensive medication you need but from a less expensive source. There are some medications that you can purchase from Canada, Mexico, or even the Cayman Islands at a fraction of the cost that we see here in the United States.
We should welcome and encourage these steps of innovation and creativity. Anything we can do to lower the cost of healthcare will translate to lowering the cost of health insurance.
If you’d like to hear more about these topics to see if we can help you find a better plan for you and your business, click here and let us know.
– Knudson Benefits Group
