How Insurance Really Works

I'm sure that, by now, you all have either read or heard about how your physical location determines how much hospitals and doctors charge for any of their services.   I'm not sure if it came as a surprise to you, but, we in the health care field have always known about this.  If you are interested in the whole report, you can read it here:  http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html

The reason this affects us all is that the amount an insurance company is charged for any procedure determines your insurance rates, including your deductible and copays.  Employers have been charged an ever-increasing amount for their employees premiums and have had to find ways to cut those costs.  The easiest way is to offer plans with very high deductibles and plans that don't pay out very much, making you pay more out of your pocket.

The first thing we all need to remember is, that when it comes to gambling casinos and insurance companies, "The house always wins."  Look at the most expensive buildings in any city; they are the bank and insurance headquarters.   That should tell you something.  So, when it comes time to choose what health, car, house or life insurance you're going to pick, keep that in mind.  The insurance companies are betting that you won't die, won't get really sick and won't have a costly car accident.  Most of our insurance decisions are based on the opposite: fear of all of the above.

 Statistically, if you are under 45, your most significant health problem would involve a car accident.  My bet is that everyone of you or a family member has been in a car accident at some point in time.  However, how many of you had medical coverage (especially for those of you in RI) at the time?  In RI, it is not mandatory to have medical coverage and most of the people from here who have come into our office for care, weren't covered.  Here is something some might not know.  For the price, medical coverage through your car insurance offers the best bang for your buck.  Please, check out your car insurance to see if you have medical coverage and how much you have.  Remember, statistics say that you or a family member will have a car accident at some point.  I'm also betting that most of you are medically under insured....only $5K or $10K per accident.  Five thousand will get you a ride to the hospital, X-Rays, ER care and a few weeks of therapy, if you're lucky.  We have $25K of medical coverage and paid a whopping $9.00 extra per year over the $10K premium price.  You'll have to shop around for an insurance company that even offers a $25K option...Progressive does not; Traveler's does.

Additionally, you'll want to check if you'll have to pay a deductible and copay for your medical benefits if you're in an accident.  Honestly, I had never heard of such a thing in our 25 years of practice, but, thanks to Warren Buffet and Geico, that's now a possibility.  One of our patient's had a very unpleasant surprise when her insurance company told her that after all her therapy.

I guess my point in writing this piece is to awaken all of us to the need to be smart and involved consumers when it comes to insurance.  The house might always win in the end, but, in the short term, I like to think that we can at least break even.

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