Aloha!
Having just returned from my very first vacation to Hawai'i, I have decided to celebrate my return to the cloudy, sleepy fall weather by sitting down to explain to you the wonders of modern medical insurance. I'll discuss what you're paying for, why you wind up paying more than you thought you would, and how we do things differently here at Stone Turtle Health.
What you're paying for:
Let me start off by saying that I'm not opposed to insurance. I think it is a deeply flawed system, but I believe that many people would be wiped out by the costs of healthcare, were it not for their insurance policies. But it can be so darn confusing! Here are some basic ideas to help you understand it better.
You're paying a premium (monthly fee) just in case something bad happens that would cost you more than you can afford. You're gambling that the amount your healthcare costs will outweigh the amount you pay in your annual premium, co-pay, deductible, and co-insurance. You pay your premium, then you have a deductible (the amount you have to pay before coverage kicks in), co-insurance (that part in your policy about out-of-pocket maximum and a percentage of the charge, generally about 20% of whatever's left of the charge after your deductible is paid), and your copay (due at the time of your appointment).
Why you wind up paying more than you thought you would:
There is a formula to creating a fee schedule, which is based upon numbers released by Medicare every January. Using those numbers and basic rates for a given zip code (which I guess is supposed to factor in an average cost for overhead), and plugging them into the formula, health care providers (outpatient or inpatient) come up with a list of costs for specific services. There is very little wiggle room, but if you turn in your fee schedule to the insurance company with your contract and you are so many standard deviations outside of what your colleagues are charging (which does tend to be 3-4 times what you are reimbursed), there is a red flag on your account and your credentialling (becoming an in-network provider) is held up until they try to figure out WHY exactly you're charging what you expect to be paid. After all this, you are sent a fee schedule from the insurer showing what they are actually willing to pay you. For naturopathic doctors, who code the same services, but spend 5-10 times as long in an office visit, we get about 30-40% of what we bill (remember, still having to fit in with the averages so we don't raise any concerns). For an MD, typically 60-80% of what they bill for the same code (and thus should be the same charge, give or take a few bucks) for a 5-10 minute visit. So, what you see on the Explanation of Benefits is just a silly little game that we're required to play in order to be covered by your insurance.
So, providers are required to come up with a crazy number, just to fit in. Then insurers say they'll only pay a portion of that (which was already agreed upon in the provider contracting process, but showing it on your bill makes US look like the bad guys and the insurer look like the good guy), then you get stuck with all or some of that, which is generally STILL more than if you'd paid cash. Dizzy yet?
How we do things differently at Stone Turtle Health:
The challenge comes from working with large organizations that won't lower the remainder of the bill (your deductible, your co-pay, your co-insurance) to reflect the fact that you're not an insurance company that we're playing the game with, but an individual who has obligations like mouths to feed, rent to pay, insurance to buy. However, there's a clause in every insurance contract I have ever signed that says something like "the provider agrees that they are NOT REQUIRED (emphasis mine) to charge the member (that's you) any uncollected amount between the allowed and paid amounts". The allowed amount is the amount the insurer agrees to pay and then, more often than not, foists upon you as part of your deductible, co-insurance, and co-pay (or sometimes, as a non-covered charge, even though it is legitimate and supposed to be covered, which is another nightmare to deal with altogether).
Since I run a small practice, I am able to let the insurance companies apply that $100-$200 (that they didn't cover in your allowed amount) to your deductible and only charge you $75 for it, saving you $25-125 or more. For a 30-60 minute visit instead of a 5-8 minute one. Like that idea? Give us a call and we'll get started working with you to provide you with safe, effective, and financially-conscious health care.