Healthcare insurance is big business. In first half of 2018, stocks were up by 50-70%...crazy numbers considering money is being made while millions in our communities are suffering financially to pay their bills. There are only two ways for the insurance company to make money:
1. increase the number of people on their panel
2. decrease the spending on healthcare costs
With the Democrats taking the house in the midterm elections of 2018, the healthcare stocks went up by 4-5% the next day just because of the possibility that some government mandated scheme will increase the number of people who will end up on the rolls of insurance companies by expanding coverage.
Healthcare is a non-partisan problem and you better believe that insurance companies are going to make money regardless of who is in power...Democratic policies will increase the number of people on insurance rolls, and Republican policies will deregulate the market allowing insurance companies to cut their costs by denying coverage or providing products that cost a lot but deliver nothing...it’s a win-win situation no matter who is in power.
So how do health insurers take your money? They basically do this three ways:
So now you know--you sink $7k to $19k into a premium just so you are given the illusion of being covered by “insurance” but when you go to use this insurance, you will realize that you are still responsible for visit cost at the time of your service AND you will be responsible for your deductible.
Here is a simple example--let’s say your child needs to visit an urgent care; you already bought a policy for $19,000. Then you pay $50 for the urgent care visit, and then you find out that the urgent care billed the visit for $300 but since you are lucky and have health insurance, your insurance company got you a “contract” price of $120...but since you already paid $50, now you only owe $70 because your family hasn’t spent $15,000 already on healthcare costs. Now if you had just asked the urgent care at the time of visit--”how much for the visit if you pay “cash” at the time of service?” The most likely answer will be between $70-$100 depending on your market.
In our next blog, we will look at why the insurance companies operate the way they do...are they just sadistic or constrained by the realities of our healthcare market...as usual the truth lies somewhere in the middle, though perhaps closer to the sadistic range :)
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Comments (1)
Usman Sheikh 2019-01-03 07:08:30
Highly informative and eye opening.