As my regular readers know, I had some issues earlier this year with my knee. I needed to get an x-ray and then an MRI. For all of my adult life, I had been part of a PPO medical plan. I would go to the doctor’s office or hospital, get examined/have tests completed, and then pay the co-pay. A few weeks later I would receive a bill in the mail if my insurance didn’t pay for what I had done. No sweat.
But last year, my insurance changed. Due to rising health care costs, my employer offered me a high deductible insurance plan coupled with a health savings account (HSA). In a nutshell, I save money in the HSA account tax-free and use it for medical expenses. I have no co-pays, instead I pay the cost for the doctor visit. Once I pay enough to meet the deductible (currently $2,000) I am off the hook for most expenses for the plan year. This is a great thing for me because I’m young and healthy and rarely visit the doctor. This will allow me to save money.
Fast forward back to the present and I get the bill for my x-ray: $650. And then the bill for my MRI: $2,200. I was shocked at how expensive these cost! What surprised me more was that these prices varied depending on where I went and they were negotiable.
Rising Health Care Costs
This leads me to what I want to talk about, rising heath care costs. I’m going to try to not get too political. The reason I think the increase of rising health care costs is so much is because most people have a PPO or HMO type insurance plan where they only have to make a co-pay. They have no idea what the true cost of the exam is. You are more likely to go to the doctor when something is wrong if it’s only going to cost you $20 as opposed to $80 or more. I’m not saying you should avoid going to the doctor, mind you. I am saying there are instances where you probably don’t need to go to the doctor but you go anyway.
Also, I am not laying the blame squarely on the consumer either. The doctor gets paid when you come and visit him or her and orders you tests. The $20 for the visit and $20 more for a test is manageable. Any successful relationship is a two way street. As the consumer, you need to question if you really need to go to the doctor. As the doctor, you really need to assess whether a test is necessary or not. Also as a consumer, you need to question the doctor regarding the need for a test. (Of course, living in our litigious society, most doctors recommend tests for the simple reason of not wanting to get sued. Which is another reason for rising health care costs.)
Rising Health Care Costs: Personal Story
I have a friend who has allergies. He used to have a standard insurance plan so every time he needed his allergy medicine, it cost him $20. He would go every month to get it refilled. This year, his employer has everyone on a high deductible plan. He now pays for the medicine out of pocket. When he went to get his prescription, the pharmacist told him it would cost $170.
He decided it wasn’t worth it. He is foregoing the medication. Not because he cannot afford it, but because he made the decision that he can deal with his allergy. He doesn’t need the medicine to get him through the day. Now, if his allergy symptoms are more harsh, I’m sure he would have paid for the medicine. The point being is once he knew how much it really cost him, he realized he didn’t need it like he thought he did.
Getting Control of Rising Health Care Costs
I don’t know how to get rising health care costs under control. I could say that everyone should be on a high deductible type plan. But you will have low wage earners who would need the allergy medicine that cannot even afford it. On the flip side, I think that the government paying for health care will only force prices higher. Higher prices means that the government has to bring in more money to pay for services. The only way to pay for this is by cutting spending somewhere else (which recent history has shown spending will never be cut) or increase income, i.e. raise taxes.
What are your thoughts? Is there a way to reduce rising health care costs?