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A Dirty Little Health Insurance Secret

MrConsumer has probably spent in excess of 30 hours doing research to help a self-employed New York friend find a new health insurance policy since his current company is being shut down by New York state because of its financial condition.

What the Affordable Care Act has done, at a minimum, is put policies for a dozen or more companies all in one place to help make price and benefit comparisons easier.

Shopping for a “platinum” policy — where there is no deductible and lower co-pays in exchange for paying more per month upfront — has been a challenge, not so much because of price, but rather because of the limited networks of doctors and hospitals being offered.

And that’s the dirty little secret or *MOUSE PRINT of many non-group plans. They are only able to achieve relatively low monthly premiums by having very high deductibles and/or very limited networks. For my friend, we’ve overcome high deductibles by paying more per month. But we can’t overcome the limited networks of doctors.

Of the 40 or so platinum plans listed on the New York health exchange, NOT ONE OF THEM had all four of my friend’s current doctors. And don’t think this is a problem peculiar to the exchange or because of “Obamacare.” The non-group individual plans offered directly to consumers by these same insurance companies use the same limited networks. To save money, presumably they have eliminated many of the most expensive doctors and hospitals in favor of “more efficient” ones.

As an example, Health Republic, the company being forced to close by New York, offered my friend access to 28 hospitals within five miles of his zip code.

Health Republic


Empire Blue

By comparison, Empire Blue Cross and Oscar, two leading providers in the area, only offer 12 or 13.

And fewer doctors accept these two plans. Well, how big are the doctor networks for each company? They can’t or won’t tell you, making excuses that the number of doctors keeps changing or that they just don’t know. How can any health insurance consumer make an informed decision if you don’t know how limited the network is that you are buying into?

Given that lack of information about the number of doctors in an insurer’s network, how can you judge the size of the provider network that accepts your insurance? In addition to the number of hospitals test, MrConsumer created the David/John/Smith/Cohen test. If the website of the health insurance company allows you to search by first name only for primary care physicians and/or specialists, choose a radius of five miles from your zip code, and enter the name “John” or “David.” Then compare the number of Johns and Davids in each of the plans you are considering. One can presume that higher numbers indicate more doctors that accept that insurance.

If you cannot search by first name, enter a common last name like “Smith” or “Cohen” and compare how many doctors with that name each plan has.

Why is the size of insurer’s provider network important? If you are referred to a specialist by your primary care doctor for a new condition, or are diagnosed with a condition best treated at a specialty hospital, you want to be able to get treatment at this preferred provider rather than having to settle potentially for someone less expert or a less well-equipped hospital. Most of these policies do not have “out-of-network” coverage.

So what plan did MrConsumer’s friend wind up with? He still hasn’t decided, but will have to give up some of his current specialists.

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13 thoughts on “A Dirty Little Health Insurance Secret”

  1. The entire health system is beyond corrupt. I have two friends that had a small accident, someone T-boned them. They were taken to the hospital, stayed overnight. One had a slight neck injury the other slight back pain.

    But of course the hospital did every test imaginable. The hospital bills with the overnight stay for the two of them was NINETY THOUSAND DOLLARS. You can build a cheap home for that!

    The ambulance ride was $900 EACH, even though they were picked up together and taken in one trip, the EMS said it is $900 per person, regardless if there is one or two people. The ride was about ONE MILE.

    She had some physical therapy for her back which basically entailed a dozen visits where she sat on machines and did basic exercises, she said half the time it was just her and no therapist, she just went in, did the rowing machine or whatever and left. Her physical therapy bill for 12 45 minute sessions was THIRTY NINE HUNDRED DOLLARS! You can hire a freaking professional trainer for 78 one hour sessions for that and they will be with you for a solid hour.

    All said and done this minor fender bender, which only caused $3,000 vehicle damage, is over $100,000 in medical bills.

    And you have no control over it, once you are laying in bed in the hospital, people just come in to “check on you”, you have no idea whom they are or what they are doing, but every “check” is $100 or $200 billed here or there.

    The WORST OF ALL, the near hundred thousand dollar hospital bill for the two of them, if they actually want a detailed list of the billing, they have to pay THREE HUNDRED TWENTY DOLLARS EACH to get this! You have to actually pay hundreds of dollars just to see what was done on you, who saw you, etc… And all of this is now done electronically, exactly what is that $320 for?

  2. The health insurance providers we’ve had over the last 10 years have been one particular HMO and the only PPO provider in the part of the different state we now live in. I know a lot of people bash HMO programs, but after what we’ve experienced with the PPO provider I’d opt for it if there were any HMOs in this state. The policy states the insured has the responsibility to make sure anyone involved in your care is a preferred provider. In the case of a surgical procedure: the hospital, the anesthesiologist, the surgeon, the assisting surgeon, the imaging tech, the imaging doctor who reviews the imaging test, the lab, the lab tech, and so on… It was unbelievable to me that when I asked these questions of the providers several told me to call their billing department as they didn’t know. There is no way you can pre-plan medical care when nobody can tell you what the cost of ANYTHING will be, not even a ballpark figure. Not to mention the mergers that occurred forcing us to look for another primary care doctor because after the merger the new management slashed physician staff by about 60%. It seems the consumer is the loser in any case.

  3. The entire health system is beyond corrupt.


    10000000000% right Lisa. It looks like it will never get a proper fix.

  4. Comment Lisa’s post:

    “And you have no control over it, once you are laying in bed in the hospital, people just come in to “check on you”, you have no idea whom they are or what they are doing, but every “check” is $100 or $200 billed here or there.”

    I had a carotid surgery about 3 years ago. The primary surgeon was paid within two weeks of the procedure. An assisting surgeon waited until the time period for the claim (90 days) past before submitting the claim. Insurance denied it. Told me not to pay since it was too old. He took me to small claims court and won about half of his billed charges. Surgery was in mid-June, he billed at Thanksgiving. I didn’t even know there was an assisting surgeon.

    Like Lisa mentioned, these people ‘check’ on you and bill. Who are they? Have they performed any meaningful function?

  5. Watch TV anytime and you will see why the health system has a lot of problems. Every 15 minutes, you either see an ad for a drug. Just look at the pens that you us to sign the forms at the doctors offices; or a lawyer suing for some sort of malpractice as ask any of your doctors what they spend a malpractice insurance.

  6. “As an example, Health Republic, the company being forced to close by New York, offered my friend access to 28 hospitals within five miles of his zip code.
    By comparison, Empire Blue Cross and Oscar, two leading providers in the area, only offer 12 or 13.”

    Why would you need 28 hospitals within a five mile radius let alone 12 or 13???
    I agree that healthcare providers are out of control but seriously 28?

    Edgar replies: Gert… you may be referred to a particular surgeon, let’s say, who has privileges at hospital X, but your insurance doesn’t cover hospital X. Or a particular hospital has a special such as cancer care and you subsequent to joining develop cancer. Memorial Sloan Kettering is such a hospital, and neither BC nor Oscar cover it. It is also another measure of how big the insurer’s network is. Consumers should want a plan a big network which is more likely to have the particular doctor you want or need to see in it than a small one.

  7. Earlier this year, I went in to see my doctor for a basic check up and get a prescription renewed. I told the doc I have an HSA-high deductible insurance and I will be paying out of pocket for my visit and is there anything you can do for me price wise? The doctor said $100 dollars for the office visit. I felt that was fair for the 15 minute visit. A week later, I got a bill in the mail from the doctors office stating I owed $26 still. It showed the visit cost being $126 and they already applied my $100 to the balance. I called the number on the bill, explaining what had happened, the billing department (who is contracted out by the doctors office), they said the doctor can not lower his bill and insisted on me paying the balance. After going round and round with them and calling the insurance company itself, who knew nothing, and then the state insurance commission, I learned that since my doctor is an ‘in-network’ provider, he can not lower his rate beyond a fixed amount. Then I talked to the doctors office manager, and she said it was true, the doctor can’t lower the price, unless the service is provided under the table. The Office manager said they would Take care of the difference and I will owe nothing.

    The only problem doing it under the table is that the money I pay will not go toward my deductible. I feel that this whole thing is one big scam.

  8. Every little bit of control and limitation that hospitals and insurance can put on the market is one step closer to keeping profits away from the free market. These companies have done a great job keeping away competition by keeping their coverage local and limited.

  9. Another part of the medical billing scam is the difference between the medical billing charges and what the insurance company negotiates to pay. Here’s an example. A few years ago I had three small lipomas removed from my arm by a plastic surgeon. I paid a $30 co-pay. When I got the summary of the costs from the insurance company, I was amazed. The billed amount by the plastic surgeon was $800 per lipoma or $2400 total. (The entire procedure took at most 20 minutes so that’s a pretty good hourly rate!) However, the negotiated rate that the insurance company paid was $200 per lipoma or $600 total – a 75% discount! What boggles my mind is that if I did not have insurance I would have had to pay the full $2400 for a procedure that the surgeon is apparently happy to receive $600 for. Every billing summary I’ve ever gotten is similar with discounts for exams, bloodwork, procedures, etc. being typically 75% – 95% over the billed rates. So if you don’t have insurance you’re not only screwed by having to pay for everything yourself, you also have to pay 4X as much as the insurance companies. How much longer can this go on before the entire system implodes?

  10. I agree with Edgar. My local general practitioner doctor does not have local hospital privileges. His hospital is 35 miles away in the opposite direction. His list of referral specialty doctors are not on my plan. My out of pocket medical expenses for 2015 were due from out of network providers. My 2016 options are worse.

  11. Well John I would love to see the whole health insurance system implode. It will be a very messy thing that has to happen.

  12. That’s nothing. Wait til you try negotiating the Medicare maze. I just signed up for my fourth carrier in five years. (December 7 was the deadline.) I checked every comparison chart I could find. Consumer Reports, Medicare Newswatch, Medicare itself…it’s still a total crap shoot. For instance, after signing up with Amerigroup for 2016 (winner of medicarenewswatch.com’s Senior Choice Award the past two years), two days later I discovered they don’t contract with my gastroenterologist! So, I’ve got to get a routine but necessary procedure done before January 1st or I’m toast. Health care in this country is outstanding if you’re a member of Congress. It should be — we’re all paying for it. But when it comes to the rest of us, good f’ing luck.

  13. Another problem I’ve encountered is billing errors. I work for a large teaching hospital which offers its own insurance plan in addition to Blue Cross. The problem is that you can ONLY use facilities affiliated with that hospital. We have great doctors, but the billing error rate is well above 50%. I got tired of dealing with collection agencies pursuing me for bills I had never received, or bills I didn’t owe, so I went back to Blue Cross. Even so, I still got an Explanation of Benefits last October saying my insurance claim had been denied for services I got in January, because somewhere between the doctor’s office and the billing office they lost my insurance information.

    Just think of all the money hospitals could save if they actually kept track of insurance information. Or even better, if we had single payer, but I won’t go into that can of worms.

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