Last month Nancy’s father suffered a stroke. He’s 96 and in otherwise remarkable health and his recovery is optimistic. It’s been an emotional roller coaster that happens to nearly every family at one time or another, and God knows I’ve been witness to it thousands of times in my role as a hospice chaplain.
In the last four weeks I’ve also found there is a learning roller coaster to this. We purchase insurance for all sorts of things: our life, our homes, our cars. But we also buy insurance for our health and that’s an entirely different equation.
We buy car insurance in the hope that we’ll never need it. In the off chance we do need it, we’re pretty certain what it will do. If we wreck the car our insurance will fix or replace it. Case closed. Same with homeowner’s insurance.
But health insurance is a different animal altogether. It’s fairly expensive and most of us don’t pay the entire premium ourselves. Because of a series of random events, we expect our employers to pay the lion’s share and they do. Before the passage of the Affordable Care Act millions of Americans could not afford health insurance. If they got sick or injured they showed up in a hospital emergency room and made a horrible bargain: fix me and hope I can repay you.
If you couldn’t, it was a lose/lose situation. The hospital wouldn’t get reimbursed for the care they provided and sued the patient. The patient, who couldn’t pay, filed for bankruptcy and destroyed their ability to ever borrow money again. Result: the hospital needed to find another way to achieve financial solvency and the patient spent his life stuck in a cycle of poverty.
Bottom line: if you didn’t have insurance you owed whatever the hospital claimed you owed with almost no ability to negotiate.
But if you did have insurance you were gold. Your insurance company would pay for whatever happened to you. You may have a small copay but it’s at best a small percentage of the cost of caring for you.
And here’s what you didn’t know: your insurance company has the ability to negotiate how much they pay. They will pay less than the cost of caring for you because the hospital can recoup the difference with the individuals who can’t negotiate.
I’ve written this article because we received a bill from Scripps Memorial Hospital for Al’s stay there. He suffered his stroke on the evening of Saturday, April 18th. We brought him to the emergency room that evening where they admitted him. He stayed there until the afternoon of Wednesday, April 22nd.
We were pleased with his health and pleased with the staff and have nothing but nice things to say about the staff at Scripps Memorial. We weren’t sure how much it would cost but we all agreed it was worth it.
A few days ago we got the total. The total cost for his stay was $49,773.00 and the copay was $700.00. Truthfully, that seemed like a good deal for us. The copay was 1.4% of the bill. We were pleased with the insurance.
But there was another line in the bill. Turns out the insurance company didn’t pay $49,073.00. They paid $11,536.56. They have enough patients that they can play hardball with the hospital and negotiate a reduced rate.
In the end it pays off for everyone. The hospital is able to be profitable receiving $11,536.56 from the insurance company and $700.00 from Al (for a total of $12,236.56). Truthfully it’s a win/win/win. The hospital can live with a reimbursement of $12,236.56, the insurance company can afford to pay $11,536.56, and Al can afford to pay $700.00.
But for someone in the exact same position without insurance, they don’t have the option of paying $12,236.56. Their bill is $49,073.00 and the hospital expects every dime. If it’s not paid right away it goes to a collection agency. These patients and families are in an untenable situation: they are willing to pay whatever they can but they just can’t pay enough.
The passage of the Affordable Care Act provides health insurance for many who had been left outside. There are still those who gamble against needing health insurance but that number is much lower. To the extent that many candidates for the Republican nomination promise to repeal the Affordable Care Act, we can assume that they choose loose/loose over win/win/win.
As Al’s son in law I’m grateful to be part of the win/win/win.