Do Medical Supply Companies Charge More If You Have Insurance?

The answer is YES. In the United States, there are few reasons why a medical supply company can charge more if you have insurance.

Indeed, having health insurance shields you from the full brunt of medical expenses, but it is no guarantee that your costs will be low.

The age long debate over the capabilities and future of the Affordable Care Act is obscuring a more pedestrian reality. And just because a person is insured doesn’t mean he or she can actually afford their doctor, hospital, pharmaceutical, and other medical bills.

The point of insurance is to protect patients’ finances from the costs of everything from hospitalizations to prescription drugs, but out-of-pocket spending for people even with employer-provided health insurance has increased by more than 50 percent since 2010.

Reports also have that in 2016, half of all insurance policy-holders faced a deductible, and the amount people need to pay on their own before their insurance kicks in, of at least $1,000. For people who buy their insurance via one of the Affordable Care Act’s exchanges, that figure will be higher still: Almost 90 percent have deductibles of $1,300 for an individual or $2,600 for a family.

Even a gold-plated insurance plan with a low deductible and generous reimbursements tends to have its holes. A good number of people have separate—and often hard-to-understand—in-network and out-of-network deductibles, or lack out-of-network coverage altogether.

Expensive pharmaceuticals are increasingly likely to require significantly higher co-pay or not be covered at all. Although many plans cap out-of-pocket spending, that cap can more or less be quite high.

Note that the medical supply company can charge way more for the equipment and supplies, however, charges are irrelevant, the health plan will pay what the fee schedule says this item should cost.

Although commercial plans are more ambiguous as to what their payment arrangements are, but without insurance, you pay whatever the company decides to charge, which is frequently way more than the item is worth.

Few Reasons Why Medical Supply Companies Charge More If You Have Insurance

For a lot of people who have had insurance for decades, there is a creeping sensation that more cost is being thrown on them, and indeed that perception is quite true. Here are few reasons why a medical supply company will charge more if you have insurance;

1. High deductibles

Though low-premium insurance options are available in the form of high-deductible health plans, consumers are expected to pay a sizeable amount of expenses before their coverage kicks in.

Note that the IRS defines a high-deductible health plan as one that has a deductible of at least $1,350 for individual coverage or $2,700 for family coverage.

These plans more or less work alongside a health savings account, which customers can use to sock away cash on a pre-tax or tax-deductible basis.

This money grows free of taxes and you can withdraw from it on a tax-free basis as long as you are using your cash to pay qualified medical expenses.

2. Cost Sharing

Yes, you are not just seeing things: Consumers are paying more money in the form of higher premiums, deductibles, and additional expenses.

According to industry reports, Last year, annual family premiums for health insurance through the workplace rose to $18,764, an increase of 3 percent from 2016. Of that amount, on average, workers contributed $5,714 to these family plans, accounting for their share of the premium.

3. Other costs

Notably, these expenses only tell part of the story. Consumers are also paying more for copayments — the amounts of money you pay each time you visit a doctor or buy a prescription drug or durable medical equipment. In 2016, employees paid an average of $140 toward co-pays, down from $225 in 2006, according to industry reports.

That is because insurance companies and plans are using other levers to share expenses with employees, namely coinsurance, which takes effect after employees hit their annual deductible. At that point, the insurer will cover a percentage of the cost of service, while the employee pays the rest.

On average, workers were responsible for 19 percent of the cost of a hospital admission and equipment purchase in 2017, in comparison, the average copayment for a hospital visit is $336 per admission.

How to Protect Your Pocket from Outrageous Medical Bills

You really have to be on your guard for surprise expenses when you are using your coverage. Although you have to be an active participant to figure out how to lower your costs, here is where you can begin:

1. Take Time To Understand Your Health Insurance And Medicare Policies

Indeed Insurance policies are complicated and more or less written in ways that make them extremely difficult to understand.

However, the better you understand what’s covered and what is not, the better you will be at making informed decisions about the treatments and equipment recommended by your doctor and evaluating the bills you are sent.

2. Know Your Rights

Although the situation can indeed get pretty dire when it comes to paying for health related services in the U.S., there are laws on the books to help protect people who struggle with paying for the services they need. If you don’t know your rights, it may be easy for bill collectors to take advantage of you.

Another thing to remember is that medical debt can’t count against your credit. Indeed, collectors can hound you for it and make your life more stressful and unpleasant, but they can’t hurt your credit over it. Finally, your privacy is covered under HIPAA.

If a medical supply company or insurance company sends a bill to claims and in doing so violates your privacy, you can report them.

3. Always Ask Questions

So many health’s related spending is the result of ignorance. If you knew there was a cheaper prescription option available, wouldn’t you try it?

If you could always get an explicit picture of how the cost-benefit relationship compares between two different procedures, it would often change your view of which to go with.

Always be eager willing to ask your doctor’s company lots of questions. Don’t just trust that the first course of action they suggest is necessarily the best. Ask about alternatives and costs while you are there in the office.

And then ask more questions at the pharmacy, and then even more when you are talking to your insurance company. Always feel free to annoy everyone who works at each place if that’s the cost of understanding what to expect your medical bills to be and how to bring costs down.

4. Don’t Accept All Bills At Face Value

Have it in mind that almost half of all medical bills are believed to include errors. So many people are involved in creating those bills, assigning them the proper codes, determining what is covered by insurance, and making the decisions that ultimately determine what you owe. That provides a lot of opportunities for errors to slip in.

Therefore, if it looks like your bill includes duplicate charges, procedures you are not sure occurred, or anything else that seems suspicious, call and ask.

You may have to spend some time on hold or on the phone to get an answer, but if it saves you hundreds or thousands, that time will be well worth it.

5. Make An Effort To Avoid Interest

As with all types of debt, avoiding interest is a good idea. Many medical supply companies will suggest payment plans that don’t involve interest.

It never hurts to ask. If you find the bills piling up, you will be glad not to watch the interest debt balloon along with the rest.

And also don’t pay with your credit card if you are not sure if or when you can pay it off. Most people can find other payment options or financial assistance with a little help.

Your medical supply company might even work with you to bring the costs down if they understand your financial difficulties.

If you are feeling overwhelmed and just don’t know where to begin, consider hiring a health advocate. Somebody who knows the system better than you will know the right questions to ask and what steps you can take to bring your costs down.

6. Invest In Long-Term Care Insurance As Early As Possible

Note that experts recommend acquiring long-term care insurance sometime in your 50s. If you have missed that chance already, it is still worth looking into available plans.

Long-term care is costly – assisted living costs average about $43,000 per year. If you can get help with those costs, then your savings account (and those of your offspring) will be much better.

7. Have A Savings Account Devoted To Health Care Costs

If you start a Health Savings Account (HAS) when you are young, you can invest the maximum amount in it each year up until you enroll in Medicare.

Aside from not having to pay taxes on money invested in an HAS, if you manage to build it up over the years and you don’t need to draw on it as much, then you have a nice financial cushion for when you start to have higher health costs in your senior years.

Once you have signed up for Medicare, you will no longer be able to make new contributions to an HAS, but you can still use any of the money that’s there for healthcare purposes.

You also have the option of setting up a Medical Savings Account (MSA) if you enroll in certain types of private Medicare Advantage plans.

Conclusion

The best way to avoid exorbitant health related costs is to stay as healthy as possible. Being inactive has been estimated to cost up to $1,125 per person per year in healthcare costs.

Obesity and smoking regularly led to higher healthcare premiums; coupled with the costs of the healthcare problems they contribute to like lung cancer and heart disease.

Indeed, you can’t avoid every health issue, but eating well, working out, and quitting smoking will all add up to fewer hospital visits and health concerns, which nets lower healthcare costs over a lifetime.