The healthcare industry is rapidly changing. Many people aren’t happy with the traditional insurance model where policyholders pay high premiums for coverage that doesn’t cover all their medical costs. People want value for their money.
Companies are offering an array of products that are aimed at responding to people’s needs such as:
- More value for their money.
- Better coverage to lower one’s financial obligation for major health situations.
- Access to more providers.
- Coverage anywhere in the country.
- Coverage that is customizable to fit their needs.
One of these products is the medical cost sharing plan. These plans have been around for quite a few years. I’d like to share my insights on this product and who would be a good candidate.
The problem
When you think of the business model of traditional insurance, when you need to see a doctor, fill a prescription or have medical tests, you might just pay a fixed fee (copay) and the insurance pays the rest of the cost. There’s a level of comfort and security. For someone who goes to the doctor multiple times a year, this might be a comfort.
However, what this has created is a population of uninformed consumers. When was the last time you bought anything and weren’t told the cost? The answer is never! Health insurance companies have taken away our power as consumers with a false sense of security.
Medical cost sharing plans want people to be informed consumers. They want people to help stop medical facilities from charging exorbitant prices. People have been made to believe that if something major happened to you, the medical bills would be in the hundreds of thousands. This isn’t true. That’s why medical cost sharing plans’ members are self-pay patients when they go to a hospital, have cancer, need a surgery, etc.
What is a medical cost sharing plan?
They are formed by benevolent companies who pool the monthly membership fees of relatively healthy people and use that money to share in larger medical cost (e.g. ER visits, hospitalization, cancer, surgeries, etc.).
Because medical cost sharing plans aren’t regulated by the Department of Insurance, some people have concerns as to whether their medical bills will be paid. There have been stories of unsavory leadership, cashflow shortfalls and members waiting for reimbursements after paying their own medical bills. It’s important to look at how the medical cost sharing company does business with their members.
My personal experience
Like most people, I want to keep my monthly premiums down. I’m fairly healthy, don’t go to the doctor other than my annual physical and prefer working with holistic practitioners when necessary. The thought of paying $500 – 600 per month for coverage I wouldn’t use much didn’t sit well with me. The medical cost sharing product I personally have includes:
- coverage for preventative services,
- allows me to contribute to an HSA,
- up to 12 mental health counselling sessions a year for free and
- virtual healthcare for smaller health issues.
For larger medical situations, I only have to pay $1,000 towards all the medical costs. My monthly costs are about 30% lower than what I’d be paying through the Marketplace. Sounds too good to be true – right?
Last year I was dealing with some health issues. My PCP wanted me to check out my heart because of the symptoms I was having and my family history. Everything my body was telling me said it wasn’t my heart, but she was making a good case. I worked with two different types of cardiologists, did a whole slew of blood and diagnostic tests with no evidence of any issues. One of the doctors suggested I do a very expensive procedure to fix what he thought was an arrhythmia. I was able to negotiate the self-pay price down for this procedure to about $30,000. I paid my $1,000 obligation directly to the cost sharing company. They pre-paid the cardiologist and hospital for the procedure. When I subsequently got the bill for the anesthetist, they emailed me credit card payment information and I was able to pay the bill with their money. The process was incredibly easy. If I had traditional insurance, the insurance would have probably been billed closer to $150,000 for the procedure and who knows how much I would have had to pay!
Medical cost sharing plans are not for everyone and not all sharing companies are the same! If you or someone you know has traditional health insurance and would like to see if this would be a good fit, I’m happy to explore this with you. What we’d consider are things like:
- Do you have any chronic health issues?
- Do you take any medications?
- How often do you go to the doctor in a typical year?
- When was the last time you were in the hospital or emergency room?
- Are you comfortable with change?
Again, these plans aren’t for everyone. But for the right people or small business, these plans are a breath of fresh air!
Schedule a time to learn more – www.calendly.com/cgordon