Updated January 24, 2018; First published September 13, 2017

It’s time to talk about Health Insurance in the USA.  I’ve bitten my tongue for the last four years but enough’s enough and it’s time to speak up. Because it’s true what you might think: the health system in the US stinks.  It bites the big one.  It totally sux.

There are three reasons I say this.

1.  The Health system in the US relies on your employer to sponsor you through the system–to provide a health plan for you
2.  A lot of people in the US work for small businesses who may not be able to afford to offer great health plans (see above)
3.   Even with great health plans, seeking medical treatment can send you broke.  Seriously.

Just let me say that this is not a how-to on medical insurance in the US.  I don’t know enough about the system to write one of those.  And, while I try to educate myself on the topic it’s so difficult to navigate and wrap your head around (read: it’s so foreign to anything we think of when it comes to health insurance) that I’m sure I’ve missed stuff.

Our health insurance

We’re lucky, Mr H works for a large firm that offers excellent health insurance.  There are a range of plans to choose from that offer different costs and benefits.  Our first few years here were pretty straight forward.  We went for our annual medical checks at no cost.  Preventative care here is highly regarded here and visits are offered at no extra charge. In other words, your insurance company pays the entire cost of the $250 visit (or thereabouts depending on your doctor).

There are in-network doctors and out-of-network doctors.  The above is true providing your doctor is in your network.  Go outside your network and your health starts to get really expensive.  In-network essentially means your doctor–or health provider–has contracted with your insurance company.

So three years have gone by and all is good.  Mr H’s company pays an extraordinary amount to cover us and we pay around about the same as we paid in Australia to cover us.  We also have a credit card that the company puts money into and we put money into (pre-tax).  This is to cover us for the co-payment we have to make on many of our health expenses.  This is usually true until you’ve spent a certain amount of money and differs from plan to plan and is dependent on your organisation and the plans they provide for you.  Unless it’s a preventative visit you generally have to make a co-payment. (I guess we call this the gap in our private medical insurance in Australia).

Essentially we were paying a fortune and Mr H’s employer was paying a fortune for 4-10 doctor’s visits a year–mainly preventative care.

Don’t get sick unless you can afford it

It’s when something happens to you that is outside the norm that health insurance really starts to suck.

For example, one of the tennis coaches at school got a brain tumour.  He was one of the lucky ones, it wasn’t cancerous and it could be treated.  I’m going to quote the story from his Go Fund Me page:

“…The difficulty now is there are only a handful of neurosurgeons qualified or willing to perform this complicated procedure. And needless to say, despite medical insurance, the costs are staggering. The one neurosurgeon able to perform the surgery has no insurance contracts and is exclusive to Cedars-Sinai Medical Center, a hospital that MJ’s insurance is unable to contract with.

“So he’s forced to pay out of pocket, and essentially, up front.

“We’ve started this Go Fund Me campaign to help him pay for surgery, for his hospital stay, for the rehabilitation and recovery, and for whatever next steps lay ahead of him in the fight of his life.”

Oh my …

I don’t know how much the surgery, hospital visit and all the incidentals cost but let’s say it was around $500k, possibly a lot more.  I had blood tests at Cedars-Senai when I was seeing a specialist and it cost $5,792.55. No word of a lie.  This is nothing specifically against Cedars either–they all charge this much and it is a very good hospital.

So, his perspective is he’s lucky to be alive, he’s very happy he’s here to tell the tale and wouldn’t have life any other way.  I couldn’t agree more.

But seriously? Get sick and you’ll be paying off that debt for the rest of your life.

There are many doctors out there that don’t have insurance contracts.  That means they charge what they like and you put a claim into your insurance company after you’ve paid the bills.  Fine if it’s a couple of hundred dollars but gets difficult when we start to creep into the thousands, tens of thousands and … you get the picture.

And I get it, these doctors work hard to get to where they are.  They should be able to charge fairly for their services; we’d be lost without them. Or dead.  Yeah that.

But still.

This is where it gets more complicated

So, if that were me above firstly we’d die–where can I find that money to pay for the surgery? I’d have to sell everything and my family would be left with nowhere to live but lucky me I get to have surgery in a nice hospital for a few days.  Let alone trying to fund my son’s College bill next year.  (Plenty more on that I’m sure but here’s my entree story on that topic).

Secondly, I’d put the claim into my insurance.  Because this doctor is not in network I’m penalised.  Take a recent bill we had as a family.  Here is the breakdown of our “refund” quoting from an email I got from them:

“Total Charge $1025.00, out of network write off $626.36 (because we used a specialist out of my insurance network), coinsurance $119.60 (I don’t even know what this means but I assume I have to pay something to contribute), paid to member $279.04.  Please allow 7 to 10 business days to receive the check.”

I won’t hold my breath.  Out of network WRITE OFF?  Seriously? You’ve got to be joking right now.

And I can hear what you’re saying.  You’re saying, “well Gwen it’s pretty simple just stay in network and you’ll get more back and they won’t write off such a large chunk of your bill.”

Well yes, great point. But here’s where it gets interesting.  Many good doctors and specialists AREN’T in network so you immediately have fewer choices.  These doctors don’t want to be at the mercy of the Insurance companies so choose not to contract with them.  And many don’t have to.  To be fair, it’s also a big nightmare for them.

And I tried to find an in-network doctor but the good ones aren’t taking new patients and I’ve heard that even when you’re in it’s hard to get another appointment for weeks as they’re too busy–which is why they’re not taking new patients.

Let’s compare it to Australia shall we?

A doctor’s visit here is around $120. Go to a Medicare bulk billing doctor in Australia and the doctor gets $35? $45? and I pay nothing. Some doctors charge $60 or $80 and then I pay a smaller amount.  So who is the loser here? The Australian doctors or me?  Yep, both of us.

So, for the privilege of our $243.99 every two weeks we pay in health insurance–don’t forget the astronomical amount Mr H’s employer is also paying–I get $279.04 back for a $1025 bill.  (We also pay more for vision and dental insurance btw in case you’re playing along at home).  Oh, and we also may a Medicare tax and a Medicare Surtax each fortnight and God knows where that goes as there is no such thing as Medicare for us.

Deductibles, Out of Pockets and In network

Update: I took my daughter to our local “Urgent Care” because she had flu-like symptoms and couldn’t get out of bed. I just got the full bill back and the actual charge was $357.69 of which the insurance pays $266.20 and I pay $91.49.  These guys are in network! The caveat I think is that I haven’t met my deductible yet.

A deductible is basically the amount I pay until such time as I’ve accumulated the minimum amount set out by the insurance company at the beginning of the year.  Ours is $3,000. And for that we pay a lesser premium than a plan with no deductible.

We also have an Out of Pocket limit. So once we “meet our deductible” (pleased to meet you deductible you’re about to help my cash flow) then one lot of fees are removed and we only have to pay another lot (I’m being vague because I still don’t really know what). Even better is when we meet our Out of Pocket number (this year–2018–it’s $7,000) then we’ll pay nothing. Of course that’s if you’re in network. Remember if you’re out of network then there’s a high amount they just write off (which can be different every month) and you’re stung with a huge bill anyway.  Same if you’re dying (as per scenario above).

What’s Obamacare?

I don’t clearly know the answer to this question.  I think it’s the right for every person to have health insurance so if you’re my hairdresser who works for yourself and not covered under a family plan then you can sign up and pay for insurance yourself.  It’s not cheap and not every insurance company provides it. In fact, because health insurance packages differ from state-to-state, many states don’t have options like they might have here in California.  I don’t know enough about it though to speak to this.

What’s to repeal & replace?

You might have heard Trump is all set to “repeal and replace” Obama care.  I don’t know if this means people who work for themselves may no longer be eligible or whether they are trying to bring the costs down so more people can afford it because there is no substance to the arguments that get bantered around.

I do know that one of the arguments people were saying back to the politicians “on the hill” was vote for the insurance you would give yourselves.

I do also know that one of the most contentious points is pre-existing conditions.  This is one thing Trump wants dumped.  So for me, who has high blood pressure due to a pesky but controllable kidney issue, if I move health insurance providers then none of my expenses resulting in my existing high blood pressure would be covered.  I would have to foot the bill for all of it.  Nice and fair.  Way to go pollies.

What I don’t get

What I don’t get is why organisations need to pay for people’s health insurance in the USA.  It would be fine if everyone has access to it but they don’t.  Or at least it doesn’t seem to me that they do.  No, they don’t.

There’s no such thing as a public hospital so people who don’t have health insurance have to go to an emergency department, where they can’t be refused treatment, to be seen to.

I don’t get why doctors have to contract individually with the various health insurers.  Everyone has been up in arms about Obamacare raising the price of health insurance.  But shouldn’t we be looking over both our shoulders here? There are two other parties I can see play a part in this complex equation.

One is our health insurers–they’re setting these high prices. And then the doctors, hospitals and the health system in general.  Why is everything so much more expensive than it is at home?  Let’s not even start on the price of drugs here.  It feels like a conspiracy: everyone is partnered to “get the most effective price for people” yet what it is is a price where everyone can make a bit of money (read: bucket loads) and it’s got way way way out of hand.

I don’t get why the premiums are so god-damned high but you don’t get anything for it.

But back to point one (sort of): I really don’t get why every single American doesn’t have a right to healthcare.

My two cent’s worth

Cut everyone out and start again.  Everyone buy their own insurance capped at an acceptable market rate.  Have Medicare cover a set portion of every expense then medical insurance can pay for the gap.  If you can afford it then by all means you have the choice to go to a private practitioner and pay them for the extra privilege.  But, if I get a brain tumour and I can be saved like MJ was, don’t make my family eat dog food and live in a caravan park for the rest of our forseeable life just so I can be saved.

Oh and make insurance companies government run.  Sure the government is so hopeless that it could end up being shocking but everyone should be able to get medical attention.  Access to medical care is a right not a privilege.

If doctors and insurance companies weren’t spending so much time (which equals money) negotiating complex contracts the costs would drop.  If organisations are not having to pay for everyone’s healthcare then profits would be higher (or actually cost of goods wouldn’t need to be so high).

The Australian model has its flaws but it works.  I don’t see why the “greatest country in the world” has to have such a shit system.

Footnote

So I open up my piece to edit it and send out and as I’m looking through my Huffpost I see an interesting story about Bernie Sanders and his view on healthcare.  Naturally I read the story in case I learn something more to share with you.

Well blow me over guess what? It seems Bernie Sanders agrees with me. Bernie wants a Medicare system introduced here in America similar to Australia’s.

Here’s the Washington Post’s story on it.

And check out and interview with the Huffington Post & Bernie Sanders here.

Don’t worry Republican voters it will never see the light of day.  But to me that’s a huge shame.  At least a version of it.

Meanwhile, if I keep getting $279 back for every $1025 I spend perhaps I might just consider self-insuring.  I might just come out in front.  One day when I’m bored I might do some financial modelling on that one.

Have a good rest of week,

xx It Started in LA xx

PS: If you want to contribute here’s a link to MJ’s Go Fund Me page.