It’s open enrollment season on Oregon’s Health Insurance Marketplace, which ends on December 15th. As you consider your options and look at plan premiums, it’s important to remember the benefits of getting covered. Even if you’re healthy today, you never know when an accident or a previously unknown condition could land you in the doctor’s office or emergency room.
I’m young and fit, so even though my job is focused on improving Oregon’s health care system, I usually view health care with some degree of distance. However, this September I took a bad fall while rock climbing in Colorado and dislocated my elbow. Between the ambulance, emergency room, my orthopedist, and physical therapy, I was billed $18,727. However, since I have comprehensive health insurance through my employer, I owed only $2,449 out of pocket: a savings of $16,278.
Working as an advocate for a small non-profit, I don’t have a ton of disposable income. Without insurance, these bills would probably have forced me to declare bankruptcy.
I’m aware that rock-climbing is an inherently risky hobby, so to some extent, I’m always prepared to face a major injury. However, everyone is subject to the risk of an unexpected health expense. Anybody can have a freak accident, and 38.4% of men and women will face a cancer diagnosis at some point in their life. While it’s easy to say “maybe I don’t need insurance,” when you’re looking at monthly premiums, you’ll be glad to have it once you need to make a claim.
Breaking Down My Savings
Health insurance is complicated. There’s a lot of weird words and fuzzy seeming math behind what they pay and what you pay. Even as a health care policy expert, I sometimes have to dig to figure out my claims. If you’re shopping on the exchange and you’re confused, our annual open enrollment guide is a great place to start to sort things out.
However, it’s often easier to understand by looking at a concrete example. Here’s what was going on with the insurance claims for care related to my elbow injury.
Plan Discounts: The bulk of my savings came through my plan’s negotiated discount with the providers who took care of me. As individuals, patients have no real leverage to negotiate prices with doctors and hospitals - which has resulted in the outrageously inflated list prices claimed by most providers in the United States. An insurance plan representing thousands of patients, however, has much more capacity to push for a lower price. In my case, the negotiated discounts alone saved me $8,600.
Insurance Share of Payment: My coverage also paid most of the remaining balance billed. My plan is roughly equivalent to a “Gold” plan on the marketplace, which means for every dollar I am billed for health care, my plan will pay about 80 cents on average.
Deductible: most insurance plans include a “deductible,” which is an amount you must pay towards bills out-of-pocket before the plan begins to pay. In my case, my deductible is $750, but many services - like appointments with my therapist, primary care provider, or lab - are mostly covered even before my deductible is met. Since I had about $650 left on my deductible when my injury occurred, I paid more for the ambulance than the typical 20% I owe under my plan - $914, or about 60%.
Co-pays and Coinsurance: for services after the deductible, I owe 20% of the price out-of-pocket as “coinsurance.” Since I used my entire deductible on the ambulance, I paid 20% of the cost for my emergency room care. Other services, like my followup appointments with the Orthopedist and Physical Therapist, are covered with a “co-pay” (a fixed out of pocket payment that, in my case, does not reduce my remaining deductible).
Taken together, I still paid about $2,500 out of pocket in deductible, co-pays, and coinsurance for care related to my elbow. However, my situation is still much better than it would have been if I was uninsured.
There’s a Better Way
While my insurance clearly helped me cover the expense of this unexpected injury, even this reduced cost is higher than it should be. Here in the United States, we pay too much for health care, and get too little in return for what we do spend. OSPIRG Foundation is working to develop policy proposals that will make health care work better for all Oregonians, by improving coverage, holding down costs, and preserving consumer protections.
However, health care policy is hard, and even the smallest gains must be won against the resistance of powerful industry interests like hospitals, doctors, and pharmaceutical companies. Real change will take time. In the meantime, the best protection we can get from health care costs is comprehensive, long-term health insurance - whether you get it through your job, through the state, or on the individual market.