Tuesday, June 08, 2010

The Cost of Insurance

I've talked in other posts about how much we love our non-insurance company. We almost ran into a couple of issues with them with Aurora (both of our faults), but they were willing to work it out for us.

With all of the baby stuff, we're considered self pay since Christian Healthcare Ministries isn't an insurance company. They're considered a cost sharing program. Turns out that self-pay patients get quite the bill cut compared to insured patients.

Every doctor's appointment I have, they immediately take 20% off of the bill just because I "pay in full" the day of the appointment. On top of that, I'm paying significantly less to the doctor for delivery. It all has to be paid up front, but Aurora will be paid for in less than a month. And...when we got another bill for a lab test, all I had to do was call them up and ask for a discount because I'm "self pay" and they took 25% off the bill.

Yesterday, I called the hospital where we're going to be delivering to talk about payment options. The first price quoted to me of what they charge for a no complications, regular, vaginal delivery plus 2 night stay was between $10,000-$11,000 dollars. Ridiculous, right? So, then I asked about self-pay patients. How much was it? Just guess...$3250. Yep, they hike up the prices 75% for insurance companies.

So, if we were insured, including doctors appointments, the doctor bill for delivery, and the hospital, a baby would cost around $20,000. Instead, it's costing around $8000.

Most people don't care because their insurance company is being charged all of the expenses for it, but lots of insurance companies only pay 80% or so, and the patient pays the other 20%. But, with Christian Healthcare Ministries, all we pay is our monthly fee ($150 for the maternity program) and the first $500 is "personal responsibility". But, get this: anytime I receive a discount for being self pay, the difference is applied to my personal responsibility. So...the $7000 I'm discounted by the hospital applies to my personal responsibility, therefore meaning I don't owe anything.

So, what it comes down to is that we're paying no more than $1500 to have our baby. We know quite a few people who have had to pay more than that, just paying 20% (or whatever) from their insurance charges.

But, do you want to know the very best part? The money we contribute monthly, when not going to us, is going to assist others needs. It's not going to "the man." We can go to whatever doctor we want and get whatever procedures we want without being questioned. (There's no extra charge for epidurals, though they cost $1500 at least.)

So, the point of this post is to encourage you to re-think about what you're spending on health insurance, where the money you spend is going, and if it's really worth it.

We highly recommend Christian Healthcare Ministries. If you have any more questions about it, feel free to ask us! Oh, and if you switch, make sure to let them know we recommended you!


BradyandLiana said...

isn't part of the reason those of us with insurance pay more at office because we're partly paying for those without insurance?
if the cost-sharing thing works so well, how come there aren't more available?

Jonathan said...

Great question. First you can just look at insured vs. non-insured (tackle cost-sharing separately)... the reason doctors and hospitals charge the insurance company more is for a lot of different reasons. One, the number they initially quote is inflated because often the doctors and insurance company haggle over what should be reimbursed until they settle on a lower amount. There's also significant administrative cost in labor and paperwork involved in doctors negotiating for insurance payment. Self-pay patients get a break just for being self-pay (because you eliminate those extra costs), and then get an extra break if payment is up front or in any way faster than what they'd get through an insurance company or someone with really hard financial difficulty who takes a longer time to pay it off.

On the premium payment side of insurance, your amount is higher (even in part) due to costs of marketing, sales commissions, and payments to executives. If you add up all those factors and compare it with a self-pay patient who then also participates in a cost-sharing program, it's easier to see why we would pay significantly less than if we were traditionally insured.

I think one reason there aren't more cost-sharing programs available is simply because people don't know it's possible. Before we did it, I didn't know that you had any real option to not be insured. Now that I do, it makes so much more sense. Not to say that we've got it all figured out and that the program we're a part of is for everyone, but it's definitely an eye-opener to look into and see what the alternatives are to traditional health insurance.