Tuesday, April 24, 2012

Tuesday Tidbits

I have to start with the article on the front page of the New York Times about out of network benefits.  I'd be profiling this one even if I were not in it.  This is a very important issue for consumers.  If you have insurance that allows you to go out of network, your policy says it will cover 70 or 80 percent of the "allowed amount."  You may think that means they'll pay 80% of what your doctor legitimately charges, but you would be dead wrong.  It's 80 percent of what the insurance company thinks your doctor should have charged, not what they actually charge. 

It used to be that insurers paid 80 percent of "usual and customary" charges.  Back in 2009, the NY Attorney General reached a settlement with insurers that would stop them from using cost data they got from a company called Ingenix, which was a United Health Group subsidiary -- clearly not unbiased -- to determine what was "usual and customary."  Under the settlement, insurers no longer could use Ingenix data.  However, a nonprofit organization -- FAIR Health -- was formed to receive and update that data and make it available to payers, providers, and consumers.

The insurance industry, though, saw an opening.  Many of them have switched now, from usual and customary to "allowable amount," defined as pretty much whatever they say it is.  In my case, Anthem Blue Cross Blue Shield of Connecticut pays whatever the Blue Cross in the provider's state pays.  In this case, Empire Blue Cross uses 250 percent of Medicare -- and when you have an upper endoscopy on the same day as a colonoscopy, they only pay half of the allowable amount for the upper endoscopy, or $220 out of an $1800 bill.  You know what happens -- people stop having scopes as often as they should because they can't afford it.  So they wait.  Until they are sick and don't have a choice.  And by then, they need a lot more than just scopes.  It's a racket for the insurers -- and consumers need to know about it.  Which is why I gave the New York Times all of my explanations of benefits and let them run with it.  Hopefully, it will illustrate the point for many consumers who need to know how their insurance works before they go for care, not after. 

And here's a related piece on hospital pricing, which also is all over the map.  The cost of a simple appendectomy is all over the place -- and about one-third of the price differential cannot be accounted for based on any differences in the procedure itself. 

The second story of the day is the economic outlook of Social Security and Medicare.  The Social Security trust fund will run out of money in 2033, and Medicare in 2024.  But the Social Security disability account will go broke in 2016 -- not so long from now.  Some how, we are going to have to reform these systems without changing their essential character.  That may mean a higher retirement age, to start with.  The Social Security disability system is so broken, though, that it needs a much bigger fix.  They have to find a better way to make disability determinations.  There are too many appeals -- but that's because too many righteous claims are being denied, so there are too many appeals, and the whole system is bogged down.  I wonder how much of their budget they spend on administration.  I bet they could do it a lot cheaper if they did it right.

What if the Supreme Court strikes down only part of the health reform law?  What then happens to the rest of it?  Will the Supreme Court wade through all 2700 pages and figure out what parts survive and which don't?  Or will they send it back to a lower court -- or leave it to Congress to fix it?  No matter what, if the  Court does anything other than uphold the law, there will be chaos.

And here's a piece on travel insurance.  But read the fine print.  It always excludes pre-existing conditions.

Finally, apparently the days of debtors' prisons has returned. Here's a hair-raising story about a breast cancer survivor who was jailed for a $280 medical bill that she didn't even actually owe.  Such an outrage.  Illinois -- where this woman lives -- is considering legislation to outlaw debtors' prisons.  Should have been done long ago. 

And that's it for today.  Have a great day!  Jennifer


  1. For reputable companies like Travelex and Travel Guard (not the vacation's insurance), they WILL cover pre-existing conditions if you buy it at the same time as your ticket. I don't blame them for not covering pre-existing conditions later on; it's just like the person who doesn't want health insurance, and wants to buy it when they are in the hospital. Costs would go through the roof if the insurer had to cover a pre-existing condition later on. But unlike health insurance, travel insurance is cheap -- I think for two of us, in our 30s, $3000 cruise was $150 in insurance. On the other hand, travel insurance offered by the carriers is never that good, but always expensive.

  2. Interesting. I have had to cancel a flight due to my Crohn's disease and the policy offered by the airline had a pre-existing condition exclusion clause. I guess the point is that, if you have a pre-existing condition, you need to read the fine print and make sure you're buying a policy that will cover you. J

  3. Yes, the website I used to get travel insurance is http://www.insuremytrip.com/, and it allows you to compare parts of the policy, including the pre-existing clauses. Though I always go with the Travelex or Travel Guard policies. You can then compare them to those offered by the airline or cruiseline or travel agent, and see that these offer more and are less expensive. While they will cover a pre-existing condition, they will not cover it if it is unstable (like a person is terminal or something when you book it).