October 2, 2024 • 36 mins
What if navigating healthcare costs didn't feel like decoding a secret language? This episode of Bullshit on Stilts takes you deep into the maze of healthcare expenses, likening them to an unavoidable cover charge that drains your finances, just like unexpected fees at a nightclub. We tackle the double-edged sword of healthcare and retirement savings, drawing intriguing parallels between the evolution of the financial services industry and the current state of health insurance, controlled by giants like Blue Cross and UnitedHealth. By breaking down the infamous 'charge master' prices and examining how insurers negotiate discounts, we shed light on the complex dynamics affecting your pocketbook.
Ever wondered why a $550 insurance premium could lead to a staggering $3,400 MRI bill? We demystify this perplexing scenario using our Chex Mix Paradox analogy, illustrating the frustratingly opaque world of medical billing. You'll learn about potential cost-saving avenues, such as charitable care at nonprofit hospitals, and the lifesaving financial assistance programs mandated by Section 501R of the IRS code. Our discussion emphasizes the importance of being informed and proactive, as understanding these options can make a significant difference in managing hefty medical expenses, and keeping more of what you earn inside your house rather than the health care house of cards.
Balancing risk and affordability in healthcare is a personal journey fraught with tough choices. We delve into the nitty-gritty of fully insured plans versus exchange options, offering strategic advice for families grappling with traditional insurance costs. Explore alternative pathways that, while not perfect, provide customizable financial exposure for significant medical events. By evaluating spending priorities and assessing the level of health care risk you're comfortable with, we aim to help you navigate the complicated healthcare landscape with more confidence and clarity. Tune in for a mix of serious analysis and a touch of humor, all in a space that's 99.1% bullshit-free!
We love to hear your thoughts, questions, and ideas. Send us a text!
Developing your financial bullshit sniffer one episode at a time.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to Bullshit on Stilts, a podcast hosted by
two guys with vast financialbackgrounds and great bullshit
sniffers who call out the clichecrap, spackle and flap doodle,
spooed by so-called expertsacross the landscape of
financial advice Identifying asdoctors of bullshitology.
You can count on your esteemedhosts okay, maybe
(00:24):
knuckleuckleheads to bring you alively, if not deadly, mix of
serious analysis, hijinks andtomfoolery, all within a 99.1
bullshit free, safe space.
Let's get after it.
When I was looking through thismark, the document that you put
together here is setting up thediscussion that we're going to
(00:47):
have about health care out thereToday.
It's sort of the financialbogeyman between the premiums
and the copayments and thedeductibles and lions and tigers
and bears.
Oh my, you have this healthinsurance that we all agree with
immediately.
That's an important thing tohave.
We all agree immediately.
That's an important thing tohave.
But at the same time, I thinkthat there's an awful lot of
financial stress, anxiety andeven, in some cases, destruction
(01:11):
due to the cost of healthcareand staying healthy and facing
illnesses and diseases and shutup and take my money.
Speaker 2 (01:18):
I agree, and I think that it is very similar to what
employers face Outside of laborcosts.
Number two is health care costsand I think if we relate that
to the typical household, thereare certain expenses that
perhaps are more than theirhealth care costs.
But I know, as a worry combinedwith the cost, it's got to be
(01:38):
number one or two on people'smind.
Speaker 1 (01:41):
In a lot of ways it's a have to right.
You have to at least providefor caring for your health and
in today's world you knowfamilies are spending between 10
and 20 grand alone just onpremiums for them, the right to
go see a doctor within somenetwork, and then you get some
(02:01):
freebies.
Quote unquote.
The cover charge is $10,000 to$20,000 a year out of your cash
flow Not going into retirement,not building an emergency fund,
not experiencing life a littlebit more, but into the premiums
of a.
Really, in a lot of ways, thepsychological have-to you suck.
Speaker 2 (02:23):
So you pay $500 to get into the nightclub Mm-hmm.
And then you go in and you'reoverpaying for your vodka on the
rocks.
Fair enough, but have as muchcheck mix as you want, we'll
even refill the bowl.
Speaker 1 (02:38):
Yeah, and that's a really nice place.
I mean, if we're talking checks, that's top-notch stuff man.
I thought you were just goingto go with.
Go with just a pretzel orpopcorn.
Speaker 2 (02:48):
What are you talking about?
Speaker 1 (02:51):
So you've spent a lot of time in the healthcare space
over the last five, six, sevenyears now and it's interesting
to get a take of a financialbrain that has come along and
did more of a, let's say, afinancial analysis of healthcare
From a big picture standpoint.
The financial service industry,which we both come from, has
(03:13):
gone through all sorts ofdifferent things in terms of the
pricing of services offered,the ability and access to
information for free, and on andon, and on and on, and those
forces have shaped the industrythat we know today within
financial services.
And it's interesting when youstart comparing what financial
(03:34):
service has gone through to whathealth care seems to be going
through, smarter people than usconfirm.
In fact, that's exactly wherethey think you could have just
said almost everybody OK Insteadof smarter people than us.
Speaker 2 (03:46):
in fact, that's exactly where they think you
could have just said almosteverybody okay instead of
smarter people than us.
Well, well, well.
The other thing I want to askwhat the heck does this have to
do with the bowl of check mix?
But you're, but you are on tosomething, so let's get back to
paying a cover charge for no,okay, go ahead you're right,
there is a lag on what financialservices went through and what
(04:06):
healthcare is going through.
So, for example, back in the 80sand 90s if you wanted to buy a
hundred shares of GeneralElectric in other words getting
access to the stock market let'ssay you went to Merrill Lynch
and let's make them analogous toBlue Cross or UnitedHealth or
Aetna and we're talking aboutthe health care market to
(04:27):
physicians and facilities.
Let's say you went to MerrillLynch.
You'd go and say, well sure,you can have 100 shares of
General Electric and thecommission on that will be $300.
And to get information aboutthe markets or on your General
Electric, you went throughMerrill Lynch.
Let's say so.
They had control, much likeInvestee and Pravda did, of
information in the Soviet Unionback in the 50s.
(04:48):
They pretty much controlledaccess to information market
data that now we can get forfree.
Speaker 1 (04:54):
So stop right there.
So something comes to my mind,because we're really here about
healthcare and drawingcomparisons.
Right, so you're dealing in the80s with having to go through
big investment companies thatcontrol the information.
How does that relate to thehealthcare industry today?
Speaker 2 (05:10):
Well, it's the same thing In effect.
You have the big houses, youhad Blue Cross, you've got
United, cigna, aetna, and foryou to access providers you go
through their network.
Then those providers are paidby, let's say, blue Cross, a
negotiated price that theysettle on to provide those
(05:31):
services.
So you go to Merrill Lynch.
They have stated commissions$300 for 100 shares of General
Electric I'm making all of thatup.
You go to access healthcarethrough Blue Cross.
They've negotiated their priceswith those providers at some
discount to what might be theirstated price or their retail
price.
Their charge master, so tospeak, is what it's called.
Speaker 1 (05:54):
So the term that you're talking, charge master,
is the term in healthcare thatequates to retail price.
Yeah, Okay.
Speaker 2 (06:02):
So these are phonied up numbers to begin with, so
that the insurance carrier cansay well, we've got 40%, 50%,
60% discounts on these itemsthrough our network.
So when you go to a providerthrough our network, you're
getting negotiated discounts onthe services provided.
Problem is that's not reallycompared to anything.
It's just a negotiated discountoff of an arbitrary number off
(06:25):
of which they set the discounts.
Does that make sense to you?
He thought he was in control.
How wrong he was.
Speaker 1 (06:33):
Are you fucking kidding me?
So I have my health insurancepolicy whether it's through my
employer or through the openexchanges, whatever Right and I
have to go see my doctor.
When I go and see my doctor, mydoctor is the insurance company
, or is that the provider?
Speaker 2 (06:49):
He's the provider.
Okay, yeah.
Speaker 1 (06:51):
That's in your network.
Right.
Speaker 2 (06:53):
So he's offering his services to you at a discount
because he's in that network.
Speaker 1 (06:58):
So I have my insurance policy, the insurance
company has this network of careproviders professionals,
doctors, nurses, technicians,whatever and when I need to go
see my doctor.
And since I have my insurance,that shouldn't cost me anything,
right.
Speaker 2 (07:15):
Well, sometimes it doesn't, it depends on the plan
document.
But for the most part you havea copay.
So when you go see yourphysician it might be $50.
You go see a specialist, itmight be $80.
Speaker 1 (07:27):
But I'm paying my premiums, so why should I have
to pay?
When I go see the doctor Seemslike I'm already paying a lot.
Speaker 2 (07:35):
Well, you are and it does.
It seems like the premium thatyou're paying is onerous to
begin with, and then you'repaying a co-pay.
So the provider is let's say,just for a routine physical it
might be two or $300, that isbilled to the insurance company.
The insurance company pays that, but you're paying $50, what
(07:57):
20% of that with your co-pay?
So you say, well, wait a minute.
I'm paying a premium also andlet's say it's $500.
That's $6,000 a year that I'mpaying just for the privilege of
now going to see my doctor andpaying $50.
Someone just made me very angry.
Speaker 1 (08:14):
So I have my insurance policy.
I get sick.
There's a network of careprofessionals that I have access
to, and then when I go and seethe doctor, I'm probably going
to have an out-of-pocket expense.
It seems like every time I knowwhen I go to the doc, there's
always additional tests thatneed to be run.
Is that included?
(08:34):
Am I going to have to pay morefor those services?
How does that work?
Speaker 2 (08:38):
Typically, so let's just use a Blue Cross Blue
Shield Silver Advantage and theone that I'm referencing is
Texas and it was bought in themarketplace for an individual
and in that case you would pay40% of whatever the imaging is
or whatever the blood work costsare.
Okay, so if Blue Cross BlueShield said a brain MRI is
(09:03):
$1,300 cash price, then you'dpay.
If you're in your deductible,you're going to pay all of that.
Say it again If you're in yourdeductible, you're going to pay
all of that, but if you'rebeyond that, you'd be paying a
co-insurance.
You'd be paying 40% of whateverthat price is.
Speaker 1 (09:17):
When you're explaining that to me, here's
what goes through my mind, justto get it simply put in my mind.
So I have an additional testand you said I might pay 40% of
that cost.
You could.
Speaker 2 (09:27):
Now, if you're in your deductible, you're paying
all of that, so we're beyondthat.
Speaker 1 (09:30):
That's only after the deductible, yeah, so you've
already paid $5,000.
Speaker 2 (09:33):
You've been chewing through, let's say, a $6,000
deductible.
Speaker 1 (09:46):
Now, before that, you're paying, let's say, 40
percent of whatever the cost is.
So wait, wait, wait.
So let me.
Let me get this right.
I'm going to use 500 bucks amonth in the insurance premium
cost, just paying that.
Whether I use it or not, that'sgoing out the house.
Then when I do go and see mydoc, I'm probably going to pay
50 on a, a copay.
Yes, okay, do right at the timeof service.
And the good news is, if thedoctor's visit costs $300, I
(10:06):
paid $50, and my insurance thismonth that I just spent $500 on
is going to cover thatadditional $250.
Right, they?
Speaker 2 (10:15):
pay the physician Right.
Speaker 1 (10:16):
Okay, Now, normally when I go to the doctors there
are additional tests, so in thatcase that's a deductible
question, meaning that if Ihaven't exceeded the dollar
amount that is my deductible,all of that is coming out of my
pocket.
Yes, Wow.
And the good news is, after Ipay for that, 100% of that that
(10:41):
gets added to the amount ofdeductible that's been used, I
presume.
But the good news is next monthI got a $500 bill.
I got to pay for insurance.
Speaker 2 (10:49):
Shut up and take my money.
Speaker 1 (10:51):
But at least I'm accumulating the amount of money
I'm spending completely out ofpocket to maybe at some point
exceed $6,000.
I think you used.
Speaker 2 (11:02):
So let's use a case of where this can be onerous
while you're still in thedeductible phase.
An individual, his wife, neededthree MRIs to rule out MS
multiple sclerosis One of thebrain, one of the spine and one
of the lumbar vertebrae.
Also Three of them Cash price.
These were the doctor's orders.
Speaker 1 (11:22):
Yes, they were doctor's orders.
Speaker 2 (11:23):
Yep $3,400.
Holy bucket, Yep $3,400.
Speaker 1 (11:27):
And that's with the insurance.
Speaker 2 (11:29):
Yeah, so that's the in-network, yes, the in-network
price, discounted price, so tospeak, for those three items
$3,400.
Speaker 1 (11:39):
So next month, after I spend $3,400 on the test that
my doctor's saying you reallyneed to do these so I can tell
you what our next steps are, ifany.
And then next month I gotanother $500 bill coming Sure.
Speaker 2 (11:50):
That's fantastic, and he still might not meet his
deductible.
What's his deductible?
Do you recall $7,000.
Speaker 1 (11:56):
Oh.
So if this was the first thinghe spent for his care this year,
in 2024, and he paid for itthrough his network and the
negotiated discounted price,that's $3,400 of $7,000, leaving
what $3,600 left for him tospend before he gets any more
insurance support.
Speaker 2 (12:14):
Okay, Is there anything you'd like to talk to
me about that we haven'tdiscussed yet.
Let's get back to the networkfor a moment.
So I'm in the Blue CrossNetwork or I'm in the Aetna
Network.
The insurance network generallyspeaking.
What does that mean?
Does it really mean gettingback to the Chex Mix Love this I
got to get back to the Chex Mixbowl again.
(12:34):
Does that mean that Blue Crosswent and took all of the wheat
Chex Mix?
No, it doesn't.
It's not like they're pickingthe best, so they didn't pick
out the good stuff out of theChex Mix bowl.
Speaker 1 (12:47):
They're just picking docs, or are they even picking
docs?
Well, guess what it's?
Speaker 2 (12:50):
usually the same guy.
Look, if 99% of doctors are innetworks and multiple networks,
is there any?
Speaker 1 (12:58):
exclusivity.
Yeah, there's no discernment?
There, right?
Speaker 2 (13:00):
No, you're not getting the better doctors.
Discernment there right there'sno apparent like no, you're not
getting the better doctorshere's a question.
Speaker 1 (13:14):
Maybe at a facility level you may, but certainly not
from a network level.
So let's stay on that point.
Is there a fiduciary?
So that's a buzzword right Infinancial services.
I'm a fiduciary, you shouldtrust me, I'm a fiduciary, we
are a fiduciary and we alwaysmake light of that.
So the question is does thehealth insurance company have a
fiduciary responsibility to methat within their network, these
doctors are top notch, don'tmake mistakes, right?
(13:36):
Blah, blah, blah, blah, blah?
Speaker 2 (13:37):
It's almost like in the financial services industry
where you know you check theirbackground and see if there's
any nicks on it.
Same thing with the doctors,where you check their background
and see if there's any nicks onit.
Same thing with the doctors Ifthey've been suspended or if
there's been a complaint and howwas that resolved, then they'll
bring you into the network.
So you don't have to bepristine with a clean record all
the way back.
It's just there's not a bloodyhatchet involved with this.
(14:00):
So whether you're in Blue Crossor UnitedHealthcare, really
what the differentiator is isnot the quality of the provider,
it's plan options, differentways to put together a plan and
what the features are.
Speaker 1 (14:20):
Interesting to sort of shop and pick and choose what
I want?
Or is someone just saying thisis the plan we've developed for
you?
Pick A or B?
Do?
They all generally then coversimilar services, but the cost
is just an access.
Maybe is just different Moreoften.
So the fancy terms are justmore direct access or more
(14:42):
access without permission Rightor a different copay level oh,
fair enough.
Speaker 2 (14:46):
Or a different deductible.
So you've got a higher premium,okay, or a lower premium, and
you'll take a higher deductible,okay, and cross your fingers.
Speaker 1 (14:56):
We are aware that some listeners may not agree
with our earlier interruption ofwhat is known as the Chex Mix
Paradox.
The following is provided todefend our editing of this
spiral into bullshit and banter.
You're welcome.
Speaker 2 (15:10):
And you know what.
Here's where we are today.
One might say that if I'mpicking out all the wheat,
checks out of there that Ireally like the wheat.
Another one might say what doyou got against those?
Why are you committing in thatbowl a form of genocide and
eating all of those?
What's the?
Speaker 1 (15:26):
issue.
There's a third option thatyour actions aren't because you
like them, or that you're tryingto wipe them off the face of
the bowl, that you just want toconsume them, to deny other
parties within this group allfeasting on Chex Mix to have
maybe what they perceive theirfavorite.
I mean, that's a thirdpotential scenario here.
(15:47):
Incorrect answer.
Speaker 2 (15:49):
Okay, we're back.
You know it's amazing what 15minutes on our little mats will
do right.
Speaker 1 (15:55):
So we're going to rerun this real quick.
I got insurance.
I got a network through theinsurance company that I have my
insurance with.
I got $500 a month costs when Igo and see a doc in our example
$300 doctor bill but I pay $50in a co-pay when I get there and
$250 is paid by the insurancecompany.
So thus far this month'm out550 bucks and I've seen my
(16:18):
doctor who's now prescribed me,in our story, three mris in this
case.
Obviously I'm going to go.
Typically, do I tend to I mean,as a consumer, do I tend to
shop that or don't I just gowhere my doctor says what?
Speaker 2 (16:34):
happens.
It's not like shopping onAmazon for items you're familiar
with or on Priceline.
It isn't People don't know.
People don't really know whereto shop.
They don't even know what thetest is.
Fair enough.
So often if the doctor says, gohere or you're with a large
healthcare system, you just getit done there.
(16:55):
But if you're in yourdeductible that can be awfully
expensive instead of going outinto the marketplace and seeing
if better pricing exists.
Speaker 1 (17:02):
So in our case, in our example, those three MRIs
were priced at about $3,400.
Speaker 2 (17:09):
That was the negotiated discount price for
the privilege of being with BlueCross discount price for the
privilege of being with BlueCross.
Speaker 1 (17:18):
So my $550 at this point this month is paying for
the discounted price of $3,400.
So what would happen if Ididn't have insurance?
What would happen if I saw adoc?
I ended up paying $300 for thatdoctor's visit in this example,
because I don't have insurance.
But something's been botheringme and I get hey, you need these
three tests.
Now I got 3,400 that I'mlooking at and I don't even have
(17:41):
the pleasure of having thatcount toward a deductible.
So I'm out of pocket in thisexample.
3,700 bucks this month, maybe.
What do you mean?
Maybe I mean that's thediscounted price in that
insurance network.
That's why it's all about.
Why, right?
Speaker 2 (17:54):
but if you don't have insurance, you might be able to
get it a whole lot lessexpensively.
Speaker 1 (17:59):
Kelly shut the front door but having insurance gives
me access to the insurancecompany's network of
professionals at discountedprices.
Speaker 2 (18:10):
And you mean which may not be the best in the Chex
Mix Bowl.
Speaker 1 (18:14):
Oh, that's why we're talking Chex.
I didn't understand.
There was a connection here.
So if we both like the wheatChex, it doesn't mean that the
doctors and the serviceproviders in the network are all
wheat Chex.
Speaker 2 (18:27):
They're not all in the in this case.
Whatever the carrier, theymight not be in that the wafers?
Speaker 1 (18:36):
I'm not taking those, I mean, who the heck decided to
put those in?
So the wafers could be otherprofessionals in the network,
all right, so we got 3400dollars in expenses.
With an mri, I may be able toaccess it for a lower price how
do I do that?
Speaker 2 (18:49):
a couple of different ways.
Depending on your income, youmay qualify for discounted or
charitable care for those sameMRI at a nonprofit hospital
serving your community.
Okay, so if your income is,let's say, below Dude, I do not
like the sound of that.
Speaker 1 (19:07):
It feels like dark clouds over some institution.
It's charitable care.
It sounds like Lurch from theAdam family is going to be in
the emergency ward.
That doesn't sound positive.
Are these good facilities?
Are these?
Speaker 2 (19:23):
Well, they are typically the top tier providers
in any given community.
Are your nonprofit hospitals?
No kidding, yep.
Speaker 1 (19:30):
That's not the image.
That's about 4,000 of them.
Speaker 2 (19:33):
I have a weird image.
So you think of the big anchorhospitals in any given community
.
They're the nonprofit hospitals.
Speaker 1 (19:39):
So those are going to be typically the hospitals that
someone that needs financialassistance for their health care
bills or services that theyneed to consume.
Those hospitals probably havesome kind of a program With the
nonprofit hospitals.
Speaker 2 (19:54):
It's all through.
I think it's Section 501R ofthe IRS code.
It says look for you tomaintain your tax-exempt status,
you have to, among other things, provide charitable or
discounted care to lower tomid-income residents in the
communities in which you serve.
Is that new?
No, it's been around since 2010.
(20:15):
So, for example, I could be ahousehold of four making almost
$60,000, and I'm below, withoutgetting technical about this
200% of the federal povertylevel.
I could get free care, nokidding, it's paid for, it's
fully subsidized by thathospital.
I could be making $100,000.
Speaker 1 (20:33):
Do they make this hard though, though, to do it,
because I mean, it sounds like,yeah, they do.
There's a well of money tosupport so I can be healthy.
I can take care of it.
Speaker 2 (20:42):
The law- states that you have to make salient, if not
even promulgate, that financialassistance is available to them
if they meet certain financialcriteria.
So they have to do that.
Then you have a form that youneed to fill out and if you
think that that form's easy tofill out well, it's gotten a lot
easier, but it used to be justonerous to fill out and then
(21:04):
they will make a determinationwithin 30 days whether you
qualify for charitable care,meaning free care or some
discount off the bill.
Speaker 1 (21:14):
My view of the consumer, as you know, is not
necessarily a super favorableone.
In certain instances, andwhenever we have a legal
document that needs to be filledout, my view of the consumer is
.
I don't want to go through thatand I feel sorry for you and
your lack of soul.
I'm going to divulge all mypersonal information.
Where's that going?
I got to wonder how often arethese programs used by
(21:36):
individual patients of thehealth care system?
Speaker 2 (21:39):
Not very much.
I don't have the statistics,but I know that it's a very—.
Just give a number and theywon't know.
Oh yeah, that's right incorrectanswer so you know like well you
know what I do.
Remember one from gala that wasduring covid and it was 68
percent of people did not fillout applications for relief when
they knew it was a highprobability of them receiving
(22:00):
some type of subsidy because theform was too onerous.
They just didn't want to gothrough it.
Then there's other factors thatcome in, like shame.
They don't want to fill it out.
So there's other factors thatcome in like shame.
Speaker 1 (22:12):
They don't want to fill it out, so there's a lot of
factors that go into it.
Speaker 2 (22:14):
How long does it take to fill the form out?
Well, it probably doesn't takemore than a couple of hours to
gather, maybe three hours togather all the information, make
sure it's accurate and thencomplete the form and then
submit it, and then oftenthere's requests for additional
information.
So people often just don't wantto get into that, and they know
that the hospitals know thatyou suck.
Speaker 1 (22:33):
In terms of this MRI stuff for $3,400 exposure out of
pocket.
Give me some examples of whatthat might cost a person.
If they didn't have insurance,didn't have the access to that
discounted great pricing, whatwould they do?
They just go down the block andsay, hey, my doc gave me this
order.
It's not the right company, butI see you guys do imaging,
(22:53):
knock on the door and ask themto do it.
I mean, is that fair?
Speaker 2 (22:56):
No, typically you'd have to shop for providers that
offer cash pay lower cost cashpay.
Why it makes sense for a lot ofthem?
Because they're able tocircumvent all of the rigmarole
of going through processing aninsurance claim.
Speaker 1 (23:13):
So is cash paid different?
I mean, I'm confused here.
Speaker 2 (23:17):
It's totally circumvents insurance.
Remember our example was theyweren't insured.
But it can apply to someone whohas insurance.
It's totally circumventsinsurance.
Speaker 1 (23:26):
Okay, so before we go back to the insurance person,
the uninsured person shopsaround, potentially just finds
out hey, do you accept?
Would you say cash pay or can Ijust pay pricing?
Can I just pay cash for aservice?
I need these MRIs done for me.
Speaker 2 (23:41):
Yeah, we're separating this away from
insurance and we're talkingabout a whole different market.
I have no insurance in thisexample, it's a cash pay market
rather than the market ofnetworks.
Speaker 1 (23:53):
Yes.
So in the first example, allthe way up into this point, 500
premium, 50 bucks copay on mydoctor's visit, $3,400 for three
MRIs.
In this example I don't have apremium, I don't have insurance.
I did my doctor's visit but itwas 300 bucks, so I have to pay.
Speaker 2 (24:09):
Well, it might not be $300 because there are
physicians Okay, now my head'sstarting to rain.
Yeah, there's physicians thatsay you know what?
I get paid $300 from theinsurance company but I'm paying
$150,000 for medical assistanceand secretaries to process all
of these claims.
I've got to wait sometimeseight weeks to get paid all of
(24:31):
these claims.
I've got to wait sometimeseight weeks to get paid.
I can make as much money at a50% discount than as I can
getting paid $300 from theinsurance carrier.
Speaker 1 (24:37):
So instead of $300 now I had my doctor's visit.
I paid $150 out of pocketversus $50.
And then I take my MRI and I dowhat you're suggesting.
Hey, call around a couple ofplaces.
I do what you're suggesting.
Hey, call around a couple ofplaces, see if they have a cash
pay option and then schedule myvisit with that facility and go
get my test done.
What's that going to run me?
(24:58):
Same $3,400, right.
Speaker 2 (25:01):
It might run between $900 and $1,100 for all three.
All in cost, mm-hmm.
How is that possible?
Same type of facility thattakes the Blue Cross or the
Aetna or the United.
Why?
Because they're circumventingall of the cost associated with
that.
Speaker 1 (25:17):
The thing that comes to my mind right now is it
sounds too good to be true.
It's a Ponzi scheme.
There's swamp water in Florida.
I want to sell you All of thosethings come to mind.
How could it be?
Possibly less than a third thecost?
Now, are these same facilities,same train?
Speaker 2 (25:33):
no, you might have to walk through a um kentucky
fried chicken or something intothe back area back area, yeah,
or something yeah, but these arequality, nationally recognized
fast food.
You know it's not so.
It's a partnership.
Speaker 1 (25:49):
Yeah, so it's very much like that.
I like that.
So while you're waiting, youcan have a wing and a biscuit.
Speaker 2 (25:55):
The new thing of waiting with the wings instead
of in the wings.
Indeed, I like how you did that, yeah, so no, really, they are
the same facilities, samemachines, same technicians with
the same education, and skillset, so there's no question of
quality.
It's just that you're not goingthrough.
You're not going through yourinsurance and all the onerous
costs and rigmarole associatedwith being in your network for
(26:17):
that negotiated discount.
That really isn't very much ofa discount.
So in our first example,compared in the cash price
market, so in our first exampleI get all of this done.
Speaker 1 (26:26):
I'm 550 out of pocket and then,400 out of pocket, so
I'm at 3950.
Is that right?
Yeah, 3950.
I don't know, I don't listenthat closely.
Call it, I thought you would.
I can't believe that.
So call it four grand, just tomake it easy on my brain.
So four grand out of pocket innetwork coverage policy, all
(26:49):
that, and in this case, noinsurance, 150 for the doctor's
visit.
And call it a thousand out ofpocket.
Well, let's make it 1200 all in.
So 1200 bucks all in versusfour grand.
And I had insurance, yes, inthe first example.
And next month, guess what'scoming down the pipe, straight
ball right down the plate, 500bucks.
(27:10):
Yeah, here we go.
Okay, so we've been talking alot about this insurance versus
now this idea that if I don'thave insurance, I can still
access healthcare services, andI either can do it through
financial assistance programs atthese nonprofit community
facilities.
They're grade A facilities,they're great service providers
(27:30):
and highly trained individuals.
There's no different.
So I don't want to be theperson that's demonizing health
insurance either.
There's a place for healthinsurance and if you can afford
it, it's fantastic, because itdoes give you that peace of mind
.
That's a huge deal, but how doyou deal with the fact that not
everybody can afford it and noteverybody has access to it?
You deal with the fact that noteverybody can afford it and not
(27:52):
everybody has access to it.
And even on the exchange withcredits, we could still be
looking at $500, $1,400 monthlypremiums for just the health
insurance and thus the access towhat we found out not so
discounted pricing for MRIs inour examples.
Speaker 2 (28:07):
Health insurance is for catastrophe.
It is not for controllingout-of-pocket costs for routine
outpatient care the 98% of stuff, kelly, that folks of working
age need lab work and imagingscreenings, minor outpatient
surgery.
It's not for controlling thosecosts, it's for catastrophe.
Speaker 1 (28:30):
Yeah, I think that there's so much emotion.
As I said earlier, it's when Imight not be able to or I just
outright can't afford it.
But maybe I just need to learna little bit more about how to
access healthcare atsubstantially lower pricing than
even those folks that walk inwith health insurance card in
hand.
The question then alwaysbecomes well, for those families
(28:52):
that can't afford it.
They don't have access to theMedicaid services in their state
.
They make too much money.
The exchanges are out there andthey certainly you know, if you
can afford it again should shopit.
Speaker 2 (29:03):
And there's great subsidy.
The problem with marketplaceinsurance and this is anecdotal
to some extent is some providersdon't take it.
So you can have the plan but Idon't know how many doctors will
take it Aw boo.
There are other ways to accesscare discounts on care and a
(29:24):
safety net below you, and thosecan be healthcare ministries.
They don't call themselvesinsurance, they can't.
But you know share programs.
Some employers will offer whatare called MEC plans.
Mec for minimum essentialcoverage that are often much
less expensive than majormedical, which is what typically
(29:45):
you get through anemployer-sponsored plan through
one of the large carriers thatwe've mentioned is major medical
, so it handles the preventive,it handles vaccination, wellness
screenings, typically at nocost, but it does provide that
safety net for you to incurmajor illness or a major
accident or something thatsuddenly you're looking at.
(30:07):
Medical bills in the tens, ifnot hundreds, of thousands.
Speaker 1 (30:11):
So, at no cost, you have all these screenings and
access to these services, butI'm spending six grand a year.
That's the thing that I don't.
It's the checks mix at the bar.
Speaker 2 (30:20):
Well, that's the network.
That's the network, but the no,but it's also the checks mix.
Because you're not paying forthat?
It's at no cost?
Yeah, you're paying for it.
Absolutely you're paying for it.
Yeah, absolutely You're payingfor it Instead of incident.
Speaker 1 (30:30):
You're paying membership pricing, as we've
talked.
I always view it as a covercharge to get in and if you can
afford the cover charge, getinto the club and enjoy yourself
.
And it's those that can't ordon't have access and again make
a little bit too much money toqualify for other insurance
coverages.
If I'm out there as anindividual, that middle of the
(30:51):
road group, is there healthinsurance out there that can
cover my backside, like I didhave that accident, and there's
coverage where, if you'rehospitalized or if you have this
type of illness or that, thatwill help cover some of that
medical expense.
Speaker 2 (31:08):
There are catastrophic plans.
There's indemnity plans thatmight pay several thousand
dollars for a hospital stay.
Without getting too in-depthwith us, just keep it conceptual
.
And I believe if you're 30 oryounger, all you need to buy on
the marketplace is catastrophiccare.
Something really bad happens toyou.
You're taken care of.
Why?
Because they know it's a lowprobability for needing anything
(31:31):
else.
It's like a term policy in lifeFor hospital.
They might pay $1,000 or $2,000a day for a set period of time.
Cancer policies are the sameOther types of policies that you
can cobble together here thatmight have you adequately
covered for most things.
Now by covered I don't meanfully covered, I mean some
(31:52):
portion of it might be coveredWith these indemnity plans.
It's a defined benefit.
So if you're in the hospitaland your coverage says it'll pay
$1,000 or $2,000 a day and ifit's $2,500, you pay the $500.
But if it's $1,800, it's paidfor by your indemnity plan.
Speaker 1 (32:10):
I see so indemnity kicks in and they can either pay
the hospital, they'll pay youand you pay the hospital.
Indemnity kicks in right awaywith some kind of an amount and
there's a cap to the amount.
Yeah, that's why it's called adefined benefit, just like a
pension.
Yes, I get that.
So if I'm paying 500 bucks amonth on a premium Blue Cross,
blue Shield, vantage Silver inthe state of Texas and the one
(32:31):
individual was like $500 a monthin premiums, the family of four
was like $1,400 in premiums.
So $500 to $1,400 is mybandwidth.
Real quick, by comparing thatwith a tricked out
do-it-yourself healthcareapproach intending to use cash
pay providers, intending tomaybe even look at financial
(32:52):
assistance in the local bignonprofit community hospitals
that are out there that you live, by putting together either an
indemnity and or catastrophiccoverage based on my family
history, what's all that goingto run me?
And the second, like with first, we got $500 to $1,400, plus
your co -pays, co-insurance andall that stuff.
So let's not get into that partof it.
Just at 500 to 1400 a month.
(33:14):
If it were an individual, itwould be a third of that amount,
yeah, a third of that 150, 200,somewhere there.
Speaker 2 (33:21):
And typically with a family.
It might be still about thatone third.
Speaker 1 (33:26):
So wow, so let me just do that, because I this
stuff.
That's $1,000 a month not beingspent on healthcare premium,
right?
Most families out there need anemergency fund.
As an example, maybe they needlife insurance, maybe they need
other things done, I don't know,I don't know.
But that $1,000, if it wentinto a savings account, let's
say it was earmarked to createan emergency fund.
(33:47):
Right now rates are at 5%, callit.
That family would have $24,000accumulated in an emergency fund
.
For what?
Come May, within 22 months, ifthey save that additional $1,000
not being spent on the premiuminto a high-yield FDIC insured
savings account, $24,000.
Speaker 2 (34:10):
So that $24,000, not a perfect analogy, but let's
think about it this way it doescome down to a tolerance for
risk.
So in the marketplace, you canget an exceptional rate of
return 10, 11, 12% perhaps bytaking on market risk yeah, as
opposed to the safety of a FDICinsured account.
(34:31):
To save the money the $24,000,you're taking on another risk
and that is what are theprobabilities of something
happening to you where you wouldwant full insurance coverage or
would need full insurancecoverage?
So there's a risk.
So all of this does come downto a risk return trade-off.
(34:52):
One is volatility, the other issomething happens to you.
So while we can't advise onthat, that does come down to a
personal decision.
Speaker 1 (35:01):
It's sort of like shaping the amount of risk
you're taking on.
One option is fully insuredEmployer offers it, you can
afford it.
Another option is you can'tafford it, whether it's offered
or not, and you can't afford onthe exchange.
Family of $4,400 a month Justcan't afford it.
In that case that family is outthere looking for an answer and
they can start shapingsomething that might be a third
(35:24):
the cost of Still not dirt cheap$150, $400 a month.
But boy, you shape exactly howmuch financial exposure you're
going to take on, whether it's ahospitalization or some disease
or what have you.
And to me, when I'm saving athousand on the probability that
that stuff isn't going tohappen, versus just blindly
(35:45):
saying I just got to spend themoney.
That's at sort of thecrossroads of people's decisions
today, because if you can'tafford to do all the things you
want, you have to startexamining where you're spending
your money and, to your point,how much risk you're willing to
take on or take back from havinga full health insurance policy
on the market.
Pretty interesting stuff, man,good stuff.
We'll see you next time.
Welcome to Bullshit on Stilts, a podcast hosted by
two guys with vast financialbackgrounds and great bullshit
sniffers who call out the clichecrap, spackle and flap doodle,
spooed by so-called expertsacross the landscape of
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You can count on your esteemedhosts okay, maybe
(00:24):
knuckleuckleheads to bring you alively, if not deadly, mix of
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bullshit free, safe space.
Let's get after it.
When I was looking through thismark, the document that you put
together here is setting up thediscussion that we're going to
(00:47):
have about health care out thereToday.
It's sort of the financialbogeyman between the premiums
and the copayments and thedeductibles and lions and tigers
and bears.
Oh my, you have this healthinsurance that we all agree with
immediately.
That's an important thing tohave.
We all agree immediately.
That's an important thing tohave.
But at the same time, I thinkthat there's an awful lot of
financial stress, anxiety andeven, in some cases, destruction
(01:11):
due to the cost of healthcareand staying healthy and facing
illnesses and diseases and shutup and take my money.
Speaker 2 (01:18):
I agree, and I think that it is very similar to what
employers face Outside of laborcosts.
Number two is health care costsand I think if we relate that
to the typical household, thereare certain expenses that
perhaps are more than theirhealth care costs.
But I know, as a worry combinedwith the cost, it's got to be
(01:38):
number one or two on people'smind.
Speaker 1 (01:41):
In a lot of ways it's a have to right.
You have to at least providefor caring for your health and
in today's world you knowfamilies are spending between 10
and 20 grand alone just onpremiums for them, the right to
go see a doctor within somenetwork, and then you get some
(02:01):
freebies.
Quote unquote.
The cover charge is $10,000 to$20,000 a year out of your cash
flow Not going into retirement,not building an emergency fund,
not experiencing life a littlebit more, but into the premiums
of a.
Really, in a lot of ways, thepsychological have-to you suck.
Speaker 2 (02:23):
So you pay $500 to get into the nightclub Mm-hmm.
And then you go in and you'reoverpaying for your vodka on the
rocks.
Fair enough, but have as muchcheck mix as you want, we'll
even refill the bowl.
Speaker 1 (02:38):
Yeah, and that's a really nice place.
I mean, if we're talking checks, that's top-notch stuff man.
I thought you were just goingto go with.
Go with just a pretzel orpopcorn.
Speaker 2 (02:48):
What are you talking about?
Speaker 1 (02:51):
So you've spent a lot of time in the healthcare space
over the last five, six, sevenyears now and it's interesting
to get a take of a financialbrain that has come along and
did more of a, let's say, afinancial analysis of healthcare
From a big picture standpoint.
The financial service industry,which we both come from, has
(03:13):
gone through all sorts ofdifferent things in terms of the
pricing of services offered,the ability and access to
information for free, and on andon, and on and on, and those
forces have shaped the industrythat we know today within
financial services.
And it's interesting when youstart comparing what financial
(03:34):
service has gone through to whathealth care seems to be going
through, smarter people than usconfirm.
In fact, that's exactly wherethey think you could have just
said almost everybody OK Insteadof smarter people than us.
Speaker 2 (03:46):
in fact, that's exactly where they think you
could have just said almosteverybody okay instead of
smarter people than us.
Well, well, well.
The other thing I want to askwhat the heck does this have to
do with the bowl of check mix?
But you're, but you are on tosomething, so let's get back to
paying a cover charge for no,okay, go ahead you're right,
there is a lag on what financialservices went through and what
(04:06):
healthcare is going through.
So, for example, back in the 80sand 90s if you wanted to buy a
hundred shares of GeneralElectric in other words getting
access to the stock market let'ssay you went to Merrill Lynch
and let's make them analogous toBlue Cross or UnitedHealth or
Aetna and we're talking aboutthe health care market to
(04:27):
physicians and facilities.
Let's say you went to MerrillLynch.
You'd go and say, well sure,you can have 100 shares of
General Electric and thecommission on that will be $300.
And to get information aboutthe markets or on your General
Electric, you went throughMerrill Lynch.
Let's say so.
They had control, much likeInvestee and Pravda did, of
information in the Soviet Unionback in the 50s.
(04:48):
They pretty much controlledaccess to information market
data that now we can get forfree.
Speaker 1 (04:54):
So stop right there.
So something comes to my mind,because we're really here about
healthcare and drawingcomparisons.
Right, so you're dealing in the80s with having to go through
big investment companies thatcontrol the information.
How does that relate to thehealthcare industry today?
Speaker 2 (05:10):
Well, it's the same thing In effect.
You have the big houses, youhad Blue Cross, you've got
United, cigna, aetna, and foryou to access providers you go
through their network.
Then those providers are paidby, let's say, blue Cross, a
negotiated price that theysettle on to provide those
(05:31):
services.
So you go to Merrill Lynch.
They have stated commissions$300 for 100 shares of General
Electric I'm making all of thatup.
You go to access healthcarethrough Blue Cross.
They've negotiated their priceswith those providers at some
discount to what might be theirstated price or their retail
price.
Their charge master, so tospeak, is what it's called.
Speaker 1 (05:54):
So the term that you're talking, charge master,
is the term in healthcare thatequates to retail price.
Yeah, Okay.
Speaker 2 (06:02):
So these are phonied up numbers to begin with, so
that the insurance carrier cansay well, we've got 40%, 50%,
60% discounts on these itemsthrough our network.
So when you go to a providerthrough our network, you're
getting negotiated discounts onthe services provided.
Problem is that's not reallycompared to anything.
It's just a negotiated discountoff of an arbitrary number off
(06:25):
of which they set the discounts.
Does that make sense to you?
He thought he was in control.
How wrong he was.
Speaker 1 (06:33):
Are you fucking kidding me?
So I have my health insurancepolicy whether it's through my
employer or through the openexchanges, whatever Right and I
have to go see my doctor.
When I go and see my doctor, mydoctor is the insurance company
, or is that the provider?
Speaker 2 (06:49):
He's the provider.
Okay, yeah.
Speaker 1 (06:51):
That's in your network.
Right.
Speaker 2 (06:53):
So he's offering his services to you at a discount
because he's in that network.
Speaker 1 (06:58):
So I have my insurance policy, the insurance
company has this network of careproviders professionals,
doctors, nurses, technicians,whatever and when I need to go
see my doctor.
And since I have my insurance,that shouldn't cost me anything,
right.
Speaker 2 (07:15):
Well, sometimes it doesn't, it depends on the plan
document.
But for the most part you havea copay.
So when you go see yourphysician it might be $50.
You go see a specialist, itmight be $80.
Speaker 1 (07:27):
But I'm paying my premiums, so why should I have
to pay?
When I go see the doctor Seemslike I'm already paying a lot.
Speaker 2 (07:35):
Well, you are and it does.
It seems like the premium thatyou're paying is onerous to
begin with, and then you'repaying a co-pay.
So the provider is let's say,just for a routine physical it
might be two or $300, that isbilled to the insurance company.
The insurance company pays that, but you're paying $50, what
(07:57):
20% of that with your co-pay?
So you say, well, wait a minute.
I'm paying a premium also andlet's say it's $500.
That's $6,000 a year that I'mpaying just for the privilege of
now going to see my doctor andpaying $50.
Someone just made me very angry.
Speaker 1 (08:14):
So I have my insurance policy.
I get sick.
There's a network of careprofessionals that I have access
to, and then when I go and seethe doctor, I'm probably going
to have an out-of-pocket expense.
It seems like every time I knowwhen I go to the doc, there's
always additional tests thatneed to be run.
Is that included?
(08:34):
Am I going to have to pay morefor those services?
How does that work?
Speaker 2 (08:38):
Typically, so let's just use a Blue Cross Blue
Shield Silver Advantage and theone that I'm referencing is
Texas and it was bought in themarketplace for an individual
and in that case you would pay40% of whatever the imaging is
or whatever the blood work costsare.
Okay, so if Blue Cross BlueShield said a brain MRI is
(09:03):
$1,300 cash price, then you'dpay.
If you're in your deductible,you're going to pay all of that.
Say it again If you're in yourdeductible, you're going to pay
all of that, but if you'rebeyond that, you'd be paying a
co-insurance.
You'd be paying 40% of whateverthat price is.
Speaker 1 (09:17):
When you're explaining that to me, here's
what goes through my mind, justto get it simply put in my mind.
So I have an additional testand you said I might pay 40% of
that cost.
You could.
Speaker 2 (09:27):
Now, if you're in your deductible, you're paying
all of that, so we're beyondthat.
Speaker 1 (09:30):
That's only after the deductible, yeah, so you've
already paid $5,000.
Speaker 2 (09:33):
You've been chewing through, let's say, a $6,000
deductible.
Speaker 1 (09:46):
Now, before that, you're paying, let's say, 40
percent of whatever the cost is.
So wait, wait, wait.
So let me.
Let me get this right.
I'm going to use 500 bucks amonth in the insurance premium
cost, just paying that.
Whether I use it or not, that'sgoing out the house.
Then when I do go and see mydoc, I'm probably going to pay
50 on a, a copay.
Yes, okay, do right at the timeof service.
And the good news is, if thedoctor's visit costs $300, I
(10:06):
paid $50, and my insurance thismonth that I just spent $500 on
is going to cover thatadditional $250.
Right, they?
Speaker 2 (10:15):
pay the physician Right.
Speaker 1 (10:16):
Okay, Now, normally when I go to the doctors there
are additional tests, so in thatcase that's a deductible
question, meaning that if Ihaven't exceeded the dollar
amount that is my deductible,all of that is coming out of my
pocket.
Yes, Wow.
And the good news is, after Ipay for that, 100% of that that
(10:41):
gets added to the amount ofdeductible that's been used, I
presume.
But the good news is next monthI got a $500 bill.
I got to pay for insurance.
Speaker 2 (10:49):
Shut up and take my money.
Speaker 1 (10:51):
But at least I'm accumulating the amount of money
I'm spending completely out ofpocket to maybe at some point
exceed $6,000.
I think you used.
Speaker 2 (11:02):
So let's use a case of where this can be onerous
while you're still in thedeductible phase.
An individual, his wife, neededthree MRIs to rule out MS
multiple sclerosis One of thebrain, one of the spine and one
of the lumbar vertebrae.
Also Three of them Cash price.
These were the doctor's orders.
Speaker 1 (11:22):
Yes, they were doctor's orders.
Speaker 2 (11:23):
Yep $3,400.
Holy bucket, Yep $3,400.
Speaker 1 (11:27):
And that's with the insurance.
Speaker 2 (11:29):
Yeah, so that's the in-network, yes, the in-network
price, discounted price, so tospeak, for those three items
$3,400.
Speaker 1 (11:39):
So next month, after I spend $3,400 on the test that
my doctor's saying you reallyneed to do these so I can tell
you what our next steps are, ifany.
And then next month I gotanother $500 bill coming Sure.
Speaker 2 (11:50):
That's fantastic, and he still might not meet his
deductible.
What's his deductible?
Do you recall $7,000.
Speaker 1 (11:56):
Oh.
So if this was the first thinghe spent for his care this year,
in 2024, and he paid for itthrough his network and the
negotiated discounted price,that's $3,400 of $7,000, leaving
what $3,600 left for him tospend before he gets any more
insurance support.
Speaker 2 (12:14):
Okay, Is there anything you'd like to talk to
me about that we haven'tdiscussed yet.
Let's get back to the networkfor a moment.
So I'm in the Blue CrossNetwork or I'm in the Aetna
Network.
The insurance network generallyspeaking.
What does that mean?
Does it really mean gettingback to the Chex Mix Love this I
got to get back to the Chex Mixbowl again.
(12:34):
Does that mean that Blue Crosswent and took all of the wheat
Chex Mix?
No, it doesn't.
It's not like they're pickingthe best, so they didn't pick
out the good stuff out of theChex Mix bowl.
Speaker 1 (12:47):
They're just picking docs, or are they even picking
docs?
Well, guess what it's?
Speaker 2 (12:50):
usually the same guy.
Look, if 99% of doctors are innetworks and multiple networks,
is there any?
Speaker 1 (12:58):
exclusivity.
Yeah, there's no discernment?
There, right?
Speaker 2 (13:00):
No, you're not getting the better doctors.
Discernment there right there'sno apparent like no, you're not
getting the better doctorshere's a question.
Speaker 1 (13:14):
Maybe at a facility level you may, but certainly not
from a network level.
So let's stay on that point.
Is there a fiduciary?
So that's a buzzword right Infinancial services.
I'm a fiduciary, you shouldtrust me, I'm a fiduciary, we
are a fiduciary and we alwaysmake light of that.
So the question is does thehealth insurance company have a
fiduciary responsibility to methat within their network, these
doctors are top notch, don'tmake mistakes, right?
(13:36):
Blah, blah, blah, blah, blah?
Speaker 2 (13:37):
It's almost like in the financial services industry
where you know you check theirbackground and see if there's
any nicks on it.
Same thing with the doctors,where you check their background
and see if there's any nicks onit.
Same thing with the doctors Ifthey've been suspended or if
there's been a complaint and howwas that resolved, then they'll
bring you into the network.
So you don't have to bepristine with a clean record all
the way back.
It's just there's not a bloodyhatchet involved with this.
(14:00):
So whether you're in Blue Crossor UnitedHealthcare, really
what the differentiator is isnot the quality of the provider,
it's plan options, differentways to put together a plan and
what the features are.
Speaker 1 (14:20):
Interesting to sort of shop and pick and choose what
I want?
Or is someone just saying thisis the plan we've developed for
you?
Pick A or B?
Do?
They all generally then coversimilar services, but the cost
is just an access.
Maybe is just different Moreoften.
So the fancy terms are justmore direct access or more
(14:42):
access without permission Rightor a different copay level oh,
fair enough.
Speaker 2 (14:46):
Or a different deductible.
So you've got a higher premium,okay, or a lower premium, and
you'll take a higher deductible,okay, and cross your fingers.
Speaker 1 (14:56):
We are aware that some listeners may not agree
with our earlier interruption ofwhat is known as the Chex Mix
Paradox.
The following is provided todefend our editing of this
spiral into bullshit and banter.
You're welcome.
Speaker 2 (15:10):
And you know what.
Here's where we are today.
One might say that if I'mpicking out all the wheat,
checks out of there that Ireally like the wheat.
Another one might say what doyou got against those?
Why are you committing in thatbowl a form of genocide and
eating all of those?
What's the?
Speaker 1 (15:26):
issue.
There's a third option thatyour actions aren't because you
like them, or that you're tryingto wipe them off the face of
the bowl, that you just want toconsume them, to deny other
parties within this group allfeasting on Chex Mix to have
maybe what they perceive theirfavorite.
I mean, that's a thirdpotential scenario here.
(15:47):
Incorrect answer.
Speaker 2 (15:49):
Okay, we're back.
You know it's amazing what 15minutes on our little mats will
do right.
Speaker 1 (15:55):
So we're going to rerun this real quick.
I got insurance.
I got a network through theinsurance company that I have my
insurance with.
I got $500 a month costs when Igo and see a doc in our example
$300 doctor bill but I pay $50in a co-pay when I get there and
$250 is paid by the insurancecompany.
So thus far this month'm out550 bucks and I've seen my
(16:18):
doctor who's now prescribed me,in our story, three mris in this
case.
Obviously I'm going to go.
Typically, do I tend to I mean,as a consumer, do I tend to
shop that or don't I just gowhere my doctor says what?
Speaker 2 (16:34):
happens.
It's not like shopping onAmazon for items you're familiar
with or on Priceline.
It isn't People don't know.
People don't really know whereto shop.
They don't even know what thetest is.
Fair enough.
So often if the doctor says, gohere or you're with a large
healthcare system, you just getit done there.
(16:55):
But if you're in yourdeductible that can be awfully
expensive instead of going outinto the marketplace and seeing
if better pricing exists.
Speaker 1 (17:02):
So in our case, in our example, those three MRIs
were priced at about $3,400.
Speaker 2 (17:09):
That was the negotiated discount price for
the privilege of being with BlueCross discount price for the
privilege of being with BlueCross.
Speaker 1 (17:18):
So my $550 at this point this month is paying for
the discounted price of $3,400.
So what would happen if Ididn't have insurance?
What would happen if I saw adoc?
I ended up paying $300 for thatdoctor's visit in this example,
because I don't have insurance.
But something's been botheringme and I get hey, you need these
three tests.
Now I got 3,400 that I'mlooking at and I don't even have
(17:41):
the pleasure of having thatcount toward a deductible.
So I'm out of pocket in thisexample.
3,700 bucks this month, maybe.
What do you mean?
Maybe I mean that's thediscounted price in that
insurance network.
That's why it's all about.
Why, right?
Speaker 2 (17:54):
but if you don't have insurance, you might be able to
get it a whole lot lessexpensively.
Speaker 1 (17:59):
Kelly shut the front door but having insurance gives
me access to the insurancecompany's network of
professionals at discountedprices.
Speaker 2 (18:10):
And you mean which may not be the best in the Chex
Mix Bowl.
Speaker 1 (18:14):
Oh, that's why we're talking Chex.
I didn't understand.
There was a connection here.
So if we both like the wheatChex, it doesn't mean that the
doctors and the serviceproviders in the network are all
wheat Chex.
Speaker 2 (18:27):
They're not all in the in this case.
Whatever the carrier, theymight not be in that the wafers?
Speaker 1 (18:36):
I'm not taking those, I mean, who the heck decided to
put those in?
So the wafers could be otherprofessionals in the network,
all right, so we got 3400dollars in expenses.
With an mri, I may be able toaccess it for a lower price how
do I do that?
Speaker 2 (18:49):
a couple of different ways.
Depending on your income, youmay qualify for discounted or
charitable care for those sameMRI at a nonprofit hospital
serving your community.
Okay, so if your income is,let's say, below Dude, I do not
like the sound of that.
Speaker 1 (19:07):
It feels like dark clouds over some institution.
It's charitable care.
It sounds like Lurch from theAdam family is going to be in
the emergency ward.
That doesn't sound positive.
Are these good facilities?
Are these?
Speaker 2 (19:23):
Well, they are typically the top tier providers
in any given community.
Are your nonprofit hospitals?
No kidding, yep.
Speaker 1 (19:30):
That's not the image.
That's about 4,000 of them.
Speaker 2 (19:33):
I have a weird image.
So you think of the big anchorhospitals in any given community
.
They're the nonprofit hospitals.
Speaker 1 (19:39):
So those are going to be typically the hospitals that
someone that needs financialassistance for their health care
bills or services that theyneed to consume.
Those hospitals probably havesome kind of a program With the
nonprofit hospitals.
Speaker 2 (19:54):
It's all through.
I think it's Section 501R ofthe IRS code.
It says look for you tomaintain your tax-exempt status,
you have to, among other things, provide charitable or
discounted care to lower tomid-income residents in the
communities in which you serve.
Is that new?
No, it's been around since 2010.
(20:15):
So, for example, I could be ahousehold of four making almost
$60,000, and I'm below, withoutgetting technical about this
200% of the federal povertylevel.
I could get free care, nokidding, it's paid for, it's
fully subsidized by thathospital.
I could be making $100,000.
Speaker 1 (20:33):
Do they make this hard though, though, to do it,
because I mean, it sounds like,yeah, they do.
There's a well of money tosupport so I can be healthy.
I can take care of it.
Speaker 2 (20:42):
The law- states that you have to make salient, if not
even promulgate, that financialassistance is available to them
if they meet certain financialcriteria.
So they have to do that.
Then you have a form that youneed to fill out and if you
think that that form's easy tofill out well, it's gotten a lot
easier, but it used to be justonerous to fill out and then
(21:04):
they will make a determinationwithin 30 days whether you
qualify for charitable care,meaning free care or some
discount off the bill.
Speaker 1 (21:14):
My view of the consumer, as you know, is not
necessarily a super favorableone.
In certain instances, andwhenever we have a legal
document that needs to be filledout, my view of the consumer is
.
I don't want to go through thatand I feel sorry for you and
your lack of soul.
I'm going to divulge all mypersonal information.
Where's that going?
I got to wonder how often arethese programs used by
(21:36):
individual patients of thehealth care system?
Speaker 2 (21:39):
Not very much.
I don't have the statistics,but I know that it's a very—.
Just give a number and theywon't know.
Oh yeah, that's right incorrectanswer so you know like well you
know what I do.
Remember one from gala that wasduring covid and it was 68
percent of people did not fillout applications for relief when
they knew it was a highprobability of them receiving
(22:00):
some type of subsidy because theform was too onerous.
They just didn't want to gothrough it.
Then there's other factors thatcome in, like shame.
They don't want to fill it out.
So there's other factors thatcome in like shame.
Speaker 1 (22:12):
They don't want to fill it out, so there's a lot of
factors that go into it.
Speaker 2 (22:14):
How long does it take to fill the form out?
Well, it probably doesn't takemore than a couple of hours to
gather, maybe three hours togather all the information, make
sure it's accurate and thencomplete the form and then
submit it, and then oftenthere's requests for additional
information.
So people often just don't wantto get into that, and they know
that the hospitals know thatyou suck.
Speaker 1 (22:33):
In terms of this MRI stuff for $3,400 exposure out of
pocket.
Give me some examples of whatthat might cost a person.
If they didn't have insurance,didn't have the access to that
discounted great pricing, whatwould they do?
They just go down the block andsay, hey, my doc gave me this
order.
It's not the right company, butI see you guys do imaging,
(22:53):
knock on the door and ask themto do it.
I mean, is that fair?
Speaker 2 (22:56):
No, typically you'd have to shop for providers that
offer cash pay lower cost cashpay.
Why it makes sense for a lot ofthem?
Because they're able tocircumvent all of the rigmarole
of going through processing aninsurance claim.
Speaker 1 (23:13):
So is cash paid different?
I mean, I'm confused here.
Speaker 2 (23:17):
It's totally circumvents insurance.
Remember our example was theyweren't insured.
But it can apply to someone whohas insurance.
It's totally circumventsinsurance.
Speaker 1 (23:26):
Okay, so before we go back to the insurance person,
the uninsured person shopsaround, potentially just finds
out hey, do you accept?
Would you say cash pay or can Ijust pay pricing?
Can I just pay cash for aservice?
I need these MRIs done for me.
Speaker 2 (23:41):
Yeah, we're separating this away from
insurance and we're talkingabout a whole different market.
I have no insurance in thisexample, it's a cash pay market
rather than the market ofnetworks.
Speaker 1 (23:53):
Yes.
So in the first example, allthe way up into this point, 500
premium, 50 bucks copay on mydoctor's visit, $3,400 for three
MRIs.
In this example I don't have apremium, I don't have insurance.
I did my doctor's visit but itwas 300 bucks, so I have to pay.
Speaker 2 (24:09):
Well, it might not be $300 because there are
physicians Okay, now my head'sstarting to rain.
Yeah, there's physicians thatsay you know what?
I get paid $300 from theinsurance company but I'm paying
$150,000 for medical assistanceand secretaries to process all
of these claims.
I've got to wait sometimeseight weeks to get paid all of
(24:31):
these claims.
I've got to wait sometimeseight weeks to get paid.
I can make as much money at a50% discount than as I can
getting paid $300 from theinsurance carrier.
Speaker 1 (24:37):
So instead of $300 now I had my doctor's visit.
I paid $150 out of pocketversus $50.
And then I take my MRI and I dowhat you're suggesting.
Hey, call around a couple ofplaces.
I do what you're suggesting.
Hey, call around a couple ofplaces, see if they have a cash
pay option and then schedule myvisit with that facility and go
get my test done.
What's that going to run me?
(24:58):
Same $3,400, right.
Speaker 2 (25:01):
It might run between $900 and $1,100 for all three.
All in cost, mm-hmm.
How is that possible?
Same type of facility thattakes the Blue Cross or the
Aetna or the United.
Why?
Because they're circumventingall of the cost associated with
that.
Speaker 1 (25:17):
The thing that comes to my mind right now is it
sounds too good to be true.
It's a Ponzi scheme.
There's swamp water in Florida.
I want to sell you All of thosethings come to mind.
How could it be?
Possibly less than a third thecost?
Now, are these same facilities,same train?
Speaker 2 (25:33):
no, you might have to walk through a um kentucky
fried chicken or something intothe back area back area, yeah,
or something yeah, but these arequality, nationally recognized
fast food.
You know it's not so.
It's a partnership.
Speaker 1 (25:49):
Yeah, so it's very much like that.
I like that.
So while you're waiting, youcan have a wing and a biscuit.
Speaker 2 (25:55):
The new thing of waiting with the wings instead
of in the wings.
Indeed, I like how you did that, yeah, so no, really, they are
the same facilities, samemachines, same technicians with
the same education, and skillset, so there's no question of
quality.
It's just that you're not goingthrough.
You're not going through yourinsurance and all the onerous
costs and rigmarole associatedwith being in your network for
(26:17):
that negotiated discount.
That really isn't very much ofa discount.
So in our first example,compared in the cash price
market, so in our first exampleI get all of this done.
Speaker 1 (26:26):
I'm 550 out of pocket and then,400 out of pocket, so
I'm at 3950.
Is that right?
Yeah, 3950.
I don't know, I don't listenthat closely.
Call it, I thought you would.
I can't believe that.
So call it four grand, just tomake it easy on my brain.
So four grand out of pocket innetwork coverage policy, all
(26:49):
that, and in this case, noinsurance, 150 for the doctor's
visit.
And call it a thousand out ofpocket.
Well, let's make it 1200 all in.
So 1200 bucks all in versusfour grand.
And I had insurance, yes, inthe first example.
And next month, guess what'scoming down the pipe, straight
ball right down the plate, 500bucks.
(27:10):
Yeah, here we go.
Okay, so we've been talking alot about this insurance versus
now this idea that if I don'thave insurance, I can still
access healthcare services, andI either can do it through
financial assistance programs atthese nonprofit community
facilities.
They're grade A facilities,they're great service providers
(27:30):
and highly trained individuals.
There's no different.
So I don't want to be theperson that's demonizing health
insurance either.
There's a place for healthinsurance and if you can afford
it, it's fantastic, because itdoes give you that peace of mind
.
That's a huge deal, but how doyou deal with the fact that not
everybody can afford it and noteverybody has access to it?
You deal with the fact that noteverybody can afford it and not
(27:52):
everybody has access to it.
And even on the exchange withcredits, we could still be
looking at $500, $1,400 monthlypremiums for just the health
insurance and thus the access towhat we found out not so
discounted pricing for MRIs inour examples.
Speaker 2 (28:07):
Health insurance is for catastrophe.
It is not for controllingout-of-pocket costs for routine
outpatient care the 98% of stuff, kelly, that folks of working
age need lab work and imagingscreenings, minor outpatient
surgery.
It's not for controlling thosecosts, it's for catastrophe.
Speaker 1 (28:30):
Yeah, I think that there's so much emotion.
As I said earlier, it's when Imight not be able to or I just
outright can't afford it.
But maybe I just need to learna little bit more about how to
access healthcare atsubstantially lower pricing than
even those folks that walk inwith health insurance card in
hand.
The question then alwaysbecomes well, for those families
(28:52):
that can't afford it.
They don't have access to theMedicaid services in their state
.
They make too much money.
The exchanges are out there andthey certainly you know, if you
can afford it again should shopit.
Speaker 2 (29:03):
And there's great subsidy.
The problem with marketplaceinsurance and this is anecdotal
to some extent is some providersdon't take it.
So you can have the plan but Idon't know how many doctors will
take it Aw boo.
There are other ways to accesscare discounts on care and a
(29:24):
safety net below you, and thosecan be healthcare ministries.
They don't call themselvesinsurance, they can't.
But you know share programs.
Some employers will offer whatare called MEC plans.
Mec for minimum essentialcoverage that are often much
less expensive than majormedical, which is what typically
(29:45):
you get through anemployer-sponsored plan through
one of the large carriers thatwe've mentioned is major medical
, so it handles the preventive,it handles vaccination, wellness
screenings, typically at nocost, but it does provide that
safety net for you to incurmajor illness or a major
accident or something thatsuddenly you're looking at.
(30:07):
Medical bills in the tens, ifnot hundreds, of thousands.
Speaker 1 (30:11):
So, at no cost, you have all these screenings and
access to these services, butI'm spending six grand a year.
That's the thing that I don't.
It's the checks mix at the bar.
Speaker 2 (30:20):
Well, that's the network.
That's the network, but the no,but it's also the checks mix.
Because you're not paying forthat?
It's at no cost?
Yeah, you're paying for it.
Absolutely you're paying for it.
Yeah, absolutely You're payingfor it Instead of incident.
Speaker 1 (30:30):
You're paying membership pricing, as we've
talked.
I always view it as a covercharge to get in and if you can
afford the cover charge, getinto the club and enjoy yourself
.
And it's those that can't ordon't have access and again make
a little bit too much money toqualify for other insurance
coverages.
If I'm out there as anindividual, that middle of the
(30:51):
road group, is there healthinsurance out there that can
cover my backside, like I didhave that accident, and there's
coverage where, if you'rehospitalized or if you have this
type of illness or that, thatwill help cover some of that
medical expense.
Speaker 2 (31:08):
There are catastrophic plans.
There's indemnity plans thatmight pay several thousand
dollars for a hospital stay.
Without getting too in-depthwith us, just keep it conceptual
.
And I believe if you're 30 oryounger, all you need to buy on
the marketplace is catastrophiccare.
Something really bad happens toyou.
You're taken care of.
Why?
Because they know it's a lowprobability for needing anything
(31:31):
else.
It's like a term policy in lifeFor hospital.
They might pay $1,000 or $2,000a day for a set period of time.
Cancer policies are the sameOther types of policies that you
can cobble together here thatmight have you adequately
covered for most things.
Now by covered I don't meanfully covered, I mean some
(31:52):
portion of it might be coveredWith these indemnity plans.
It's a defined benefit.
So if you're in the hospitaland your coverage says it'll pay
$1,000 or $2,000 a day and ifit's $2,500, you pay the $500.
But if it's $1,800, it's paidfor by your indemnity plan.
Speaker 1 (32:10):
I see so indemnity kicks in and they can either pay
the hospital, they'll pay youand you pay the hospital.
Indemnity kicks in right awaywith some kind of an amount and
there's a cap to the amount.
Yeah, that's why it's called adefined benefit, just like a
pension.
Yes, I get that.
So if I'm paying 500 bucks amonth on a premium Blue Cross,
blue Shield, vantage Silver inthe state of Texas and the one
(32:31):
individual was like $500 a monthin premiums, the family of four
was like $1,400 in premiums.
So $500 to $1,400 is mybandwidth.
Real quick, by comparing thatwith a tricked out
do-it-yourself healthcareapproach intending to use cash
pay providers, intending tomaybe even look at financial
(32:52):
assistance in the local bignonprofit community hospitals
that are out there that you live, by putting together either an
indemnity and or catastrophiccoverage based on my family
history, what's all that goingto run me?
And the second, like with first, we got $500 to $1,400, plus
your co -pays, co-insurance andall that stuff.
So let's not get into that partof it.
Just at 500 to 1400 a month.
(33:14):
If it were an individual, itwould be a third of that amount,
yeah, a third of that 150, 200,somewhere there.
Speaker 2 (33:21):
And typically with a family.
It might be still about thatone third.
Speaker 1 (33:26):
So wow, so let me just do that, because I this
stuff.
That's $1,000 a month not beingspent on healthcare premium,
right?
Most families out there need anemergency fund.
As an example, maybe they needlife insurance, maybe they need
other things done, I don't know,I don't know.
But that $1,000, if it wentinto a savings account, let's
say it was earmarked to createan emergency fund.
(33:47):
Right now rates are at 5%, callit.
That family would have $24,000accumulated in an emergency fund
.
For what?
Come May, within 22 months, ifthey save that additional $1,000
not being spent on the premiuminto a high-yield FDIC insured
savings account, $24,000.
Speaker 2 (34:10):
So that $24,000, not a perfect analogy, but let's
think about it this way it doescome down to a tolerance for
risk.
So in the marketplace, you canget an exceptional rate of
return 10, 11, 12% perhaps bytaking on market risk yeah, as
opposed to the safety of a FDICinsured account.
(34:31):
To save the money the $24,000,you're taking on another risk
and that is what are theprobabilities of something
happening to you where you wouldwant full insurance coverage or
would need full insurancecoverage?
So there's a risk.
So all of this does come downto a risk return trade-off.
(34:52):
One is volatility, the other issomething happens to you.
So while we can't advise onthat, that does come down to a
personal decision.
Speaker 1 (35:01):
It's sort of like shaping the amount of risk
you're taking on.
One option is fully insuredEmployer offers it, you can
afford it.
Another option is you can'tafford it, whether it's offered
or not, and you can't afford onthe exchange.
Family of $4,400 a month Justcan't afford it.
In that case that family is outthere looking for an answer and
they can start shapingsomething that might be a third
(35:24):
the cost of Still not dirt cheap$150, $400 a month.
But boy, you shape exactly howmuch financial exposure you're
going to take on, whether it's ahospitalization or some disease
or what have you.
And to me, when I'm saving athousand on the probability that
that stuff isn't going tohappen, versus just blindly
(35:45):
saying I just got to spend themoney.
That's at sort of thecrossroads of people's decisions
today, because if you can'tafford to do all the things you
want, you have to startexamining where you're spending
your money and, to your point,how much risk you're willing to
take on or take back from havinga full health insurance policy
on the market.
Pretty interesting stuff, man,good stuff.
We'll see you next time.
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