Lowering The Healthcare Gap: Craig Gottwals Talks To Armstrong & Getty.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Right now. It's a great pleasure to welcome back to
the Armstrong and Gutty show Craig got walls, craig the
Healthcare Guru, attorney, law benefit consultant. Benefit Revolution is his
company slash website. We'll let you know how to get
in touch with him a little later on if you
need help. But Craig, welcome. How are you, brother? I'm good.
How are you, Joe? I'm terrific. Thank you. So a

(00:20):
brief description and why we want John Today. First of all,
it's been a while since we've talked to you and
you know, Jack and I are confident about certain topics,
but we're humble about certain topics and the complexity of
the world of insurance and benefits and healthcare and the
government and the policy. It's just it's dizzy Ng to

(00:42):
the layman. So we always like to talk to you
about what's going on. Yeah, I understand that. When when
I was on, when I was on last time, I
think I was on with Jack when you were out
and Jack was Jack was asking me what premium increases
we're gonna look like in three both for private employers
and in the exchanges. And at the time, you know

(01:04):
we were looking at twenty to thirty five percent increases
across the board. Because, yeah, because, because one of the
band aid extension of Obamacare, subsidies above and beyond what
was originally passed in Obamacare, was set to expire. And
you know, Jack asked me what I thought the odds
were that that was going to happen and I said

(01:25):
it would not happen. Republicans would cave or Democrats would
figure out a way to get it passed without a
Republican vote through some sort of budget reconciliation, and that's
exactly what they did with the inflation reduction acts. So
an extra twenty five billion a year is going to
be handed out to Um, roughly ten eleven million people
in the obamacare exchanges, and it's going to take their

(01:48):
their annual increases, you know, from something that would have
been probably down to an average of ten percent across
the board, which, in healthcare terms, honestly, Joe, is kind
of because we've been seeing seven to ten percent increases
in healthcare for twenty five years. So the fact that
the fact that healthcare is only going to go up
seven to ten percent again this year is almost a

(02:10):
picnic in light of what's going on with true inflation. Yeah,
you know, I hate to ask you for numbers you
don't have, but I find myself wondering, in the context
of all of the inflation we've had in which, you know,
healthcare allegedly a sixth of the economy, we've heard, or
a seventh, whatever it is, it seems like buying milk
and eggs is now a seventh of your paycheck. Um,

(02:32):
in the midst of all that other UH inflation, I
find myself wondering the the average American, the typical American family,
what percentage of their take home pay do they spend
on healthcare these days? Do you have any idea? Well,
that number varies greatly depending upon whether you're self employed
or whether you work at a public employer, for example,
that pays almost everything on your behalf, but of course

(02:53):
then reduces your take home pay because they're using they're
using their resources to buy your bloated health insurance. Um.
So it's that numbers kind of misleading because it's all
over the map depending upon where you work. But I
can tell you, you know, one of the reasons I'm
totally diverging here from what we had spoken about talking about,
but there's there's two main reasons we have this bloated,

(03:14):
ridiculous health care system that we have in America, and
I don't know if I've ever talked about this on
your show, but the primary reason. So taking a step
back when you buy insurance, and I'M A guy who
sells insurance, but I always tell people you're best off
buying as little insurance as you can, save what you
can cover, what you can have as high of the
deductible as you can afford, and then buy insurance, because

(03:36):
once you buy insurance, that money walks away. Right. So
we ensure we have high deductibles on our homes, our cars, etcetera.
But for healthcare we have we live in this peculiar
world where we ensure everything down to a paper cut.
You know, we all want to go into the hospital
or the doctor for a dollar co pay and we
don't think about what things cost. And that the real

(03:57):
question is why? Why did that start? Interestingly enough, that
started in World War Two, and you might say, what
the Hell? Well, in World War Two we decided, hey,
there's a war on, so we put wage freezes in
place as a country, and so what they did was
they said, well, but we still need to recruit employees

(04:19):
and retain them somehow, so benefits don't count as part
of the wage freezes. So at that time during World
War Two, employers who needed to recruit talent started putting
in these ridiculously bloated prepaid health plans where it paid
for everything. It paid for your annual physics, paid for
every had no deductible, it had no skin in the
game for the purchaser. On top of that, we amended

(04:40):
the tax code to say, Oh and by the way,
every bit of money you give to an employee in
the way of health insurance is non taxable. So we
have two huge incentives to provide these bloated medical plans
to people, and that's part of the reason this thing
is spiraled out of control the way it has the
last seventy five years. Wow, that is so interesting. Craig Gottwall's,

(05:00):
the Healthcare Guru, is on the line. Uh, that's that's
great knowledge. And the other thing that I'll always be
grateful to you for pointing out to us was how
utterly is, how utterly dishonest government healthcare programs like Medicare
are in terms of the legislation and what they claim
they will compensate doctors for their services, that sort of thing,
how artificial and dishonest the whole thing is. Yeah, you know,

(05:26):
that's a fantastic point, Joe, because there is a ray
of sunshine coming through the cloud cover. There are shoots
of green hope coming up in the desert soil here. Um,
we're seeing a renaissance in the private market and healthcare
that I wrote about years ago and it's really starting
to take off. Before we dive into the next topic,
we're always talking about the percentage of healthcare that's already

(05:49):
socialized in America. Has that changed in either direction? No,
that's great, that's actually that. That's a foundational fact I
was going to need to set up here to make
the next to make the next point, and it's it
hasn't changed other than it's just slowly creeping upwards. So
so right now it's safe to say that two thirds
of all health care in America are funded by taxpayers.

(06:11):
And then, you know, people always ask they say, wait
a minute, how's that possible? Because I see that, you know,
forty or fifty percent of people get their insurance through
work and it's because when you once you add together. Now,
remember anybody who works for a state or federal or
local government, almost all of their health care is funded
by taxicare. And then when you add that to Medicare, Medicaid, uh,

(06:33):
The v a care, and then try care, which is
for active duty military, when you add all that together,
two thirds of all health care in America are funded
by taxpayers. So you you look at that and you say, well,
now we've got one third of of health care that's
actually being funded by the private marketplace. And so how
does that work? Well, here's here's what's going on. When
you when you take your employer health care plan and

(06:55):
you go to the hospital, that plan is paying on
average across the country, two hundred and of what Medicare
would pay for the same exact service, more than double.
That's nice. This is how Medicare keeps costs down, because
Medicare is the number one purchaser of healthcare across the country.
So hospitals don't dare declinate because it's their number one client.

(07:18):
And there's also there's a there's a patriotic element to
taking Medicare because that's our health care for the oldsters.
They've paid into it all their lives. It would it
would be a it's a bad PR move for a
hospital to say we're not going to take Medicare. So
the way, the way Medicare gets funded is through a private,
hidden tax that none of us know about, and that's
the fact that it's the government pays the hospitals way

(07:41):
too little and then turns around in charges that one
third of private employers two D of what those costs
are in order to make themselves whole and make a
nice tidy profit. Oh Wow, that really is a tax.
It really is attacked. It's a hidden tax and it's
been creeping up. This is not one party or the other.

(08:02):
This has been going on since started with Clinton and
and it's been going on through the second Bush and
Obama and trump. I mean this just continues to march
on and the disparity gets worse every year. I look
at the studies and that just keeps creeping upward. So
it's it's just a beautiful thing that's starting to happen. Joe,
I've written about this. It's pretty Wonky, but I'M gonna

(08:24):
I'm gonna simplify the heck out of it. Large employers
and when I say large, I mean you've got to
have at least two hundred, fifty, three hundred employees to
make this work. They're just opting out of the entire
system right. So like when you guys talk about it's
not ours versus D it's really them versus us. It's
the elite class, the politicians versus the people. Well, there's

(08:46):
an element of that with healthcare, because it's not really
insurers versus hospitals or Medicare. It's it's really what I
like to call a government industrial healthcare complex. You've got
Medicare into hoots with the large insurers that are overcharging,
and then the hospit bittles are benefiting from these large reimbursements.
So large employers that have the resources, and most employers

(09:07):
with more than three employees do, are just starting to
opt out all together and say enough, we're gonna pay
for our employees healthcare and we're not going to do
it with any insurance company at all. And then you say, well,
wait a minute, wait a minute. How do they do that?
They say we're not paying the two of what Medicare pays.

(09:27):
We're gonna pay hospitals of what Medicare pays. So they pick,
they pick a percentage that's more than Medicare and they
say this is what will pay you for our employees service.
Will you take it or not? And so far of
hospitals are capitulating and saying yeah, I mean it's so

(09:52):
do I understand correctly that this is? These companies are
self insured. They just go ahead and write the check
for the medical coverage and they probably have like an
insurance company that just administers the claims for him, does
the paperwork. Yeah, we hire Um when we do this,
we hire an administrative agency, a t P, a, a
third party paint claims pair and then we hire what

(10:12):
we call them a repricing company that actually prices the
medical claim to be what a hundred and forty percent
of Medicare is, which we know because that's all published. Right.
So so anything that happens, like when you go to
the doctor, when you plan your surgery, whatever, we the
pre certification of the claim set comes in and says, Hey,
we don't have one of these giant insurance companies, we're

(10:34):
going to pay you forty percent more than Medicare pays.
You take it or leave it. And and it's really
hard for the hospital to say, gene, no, we're not
going to take forty more than our largest client pays us,
because that would look really bad. Now you say what
happens in the three percent? Well, roughly three percent of
them the hospital pushes back and says no, we want two.

(10:57):
And that's when when we engage with the lawyers and
we say, well, wait a minute, you're going to charge
my client when your number one client pays less than
we're offering. So of the three percent where this gets disputed,
only point three percent go to trial and so far
in the point three percent that have gone to trial,

(11:18):
every one of them is settled, except for one. The
one that settled sided with the employer because the judge
ultimately ruled you can't be charging well, first of all,
it was an emergency situation. So the in an emergency
situation you have a weird deal where somebody gets care
and they don't know what the price is going to be.
So that's not a contract legally speaking. And then the
hospital tried to charge two and of course the the

(11:42):
employer said no, we'll pay and ultimately they sided with
the employer. So what is doing effectively, Joe, is it's
reducing a company's healthcare costs by thirty percent year one.
So like whatever you're paying today, ten million dollars for
your health plan, you're gonna pay seven million hours next
year with this system. It's unbelievable. Okay, so we have

(12:04):
a fair number of business owners listening, of course, but
we have many, many hard working folks who are employees.
Is this going to filter down? Is this going to
be of benefit to the Working People? Absolutely, because they're
going to start to see the amount coming out of
their paycheck go down by thirty percent per month when
they go to and and if you're not dealing with

(12:24):
an insurance company anymore, so you just go to whichever
hospital or doctor you want and you let your employer
and your employer's repricing company fight with the hospital over
the price of the claim you we completely exempt the
employee from the from the distribute. That the UM disruption here.
Excuse me. And how widespread is this? Well, it's it's
years ago, when I started writing about it, only about

(12:46):
two percent of companies were dabbling in it. Now you've
got as many as eighteen percent of companies that are
starting to move in this direction, with at least one
form of plan that does this. It's called reference based
pricing because you're picking a reference point. In my in
my example, I used of Medicare as the reference point. Yeah, yeah,
so if if folks like business owners, want to know

(13:07):
more about this, how can they get hold of you? Um,
two ways. I mean, if you're on twitter, the easiest
ways to hit me at at an e B e
n e revolution Dot Com. If you're not on twitter
and you want to go to traditional website, uh route,
you can go to my blog, which is benefit dash
revolution dot com. You can get me a benefit benefit
dash revolution dot com and we'll have links at Armstrong

(13:30):
and Getty Dot Com for a folks driving or or whatever. Craig,
that's so interesting and you make it understandable. Um Scala
Wanta to attend. How significant development do you think this
is going to be over time, this new strategy? Well,
this is them. I would say this is a seven,

(13:51):
because it won't work for if it just won't work
well for companies with less than like two people, because
they don't have the resources to self ensure. So it's
a huge development for I mean if you're if you
have more than three employees, this is a nine out
of ten. This is a this is a huge thing.
That'll keep you from going socialized in the future. If
you're in that smaller bracket, I think you're still gonna

(14:12):
get you're gonna end up with some form of Obamacare
or Medicaid and in ten seconds. Can smaller companies at
some point in the future band together? Yes, and there are.
There are things smaller companies can do that are look
like this but aren't quite as effective, and I'm doing
that with some of those as well. Okay, fair enough, Craig,
got walls, Craig, the Healthcare Guru. Craig, terrific stuff. I

(14:32):
always great to talk to you. Hey, let's go fishing soon,
all right? Yeah, Joe, let's get after it. Yeah, those
are those bass. They need to be caught. They want it.
All right. Thanks, Craig.