Your Insurance may be Costing You Money. Here's why:
While prescription medicine gets a lot of attention, Almost 90 percent of the healthcare dollar goes elsewhere, with the majority to hospitals and clinics.
When used properly, medication can help keep people out of the hospital, and lower overall costs. That being said, it is true that some medications are still too expensive. There are lots of hidden costs in our system that may need to be addressed.
Let's start with the insurance plans themselves. Health and/or prescription insurance is most often a plan purchased by your employer on your behalf. You can also purchase it on the open market for yourself. In either case, the price you pay for insurance is called your premium.
Without getting too technical, health and/or prescription “insurance” is generally supposed to be a cost-sharing arrangement. They pay some, you pay some.
For cost-sharing to work as designed, everyone should pay something, However, some insurance companies collect premiums but pay nothing. This raises the cost of your healthcare (and everyone else's, too)
Here’s one illustration of an actual prescription claim processed by through a major insurance company.
The first section is a general summary. The 'amount of coinsurance' is the patient's calculated portion of the costs, commonly called "co-pay". The 'patient pay amount' is the total of everything which, in this case, includes a $5.50 'processor fee'. In short, it all adds up to $10.55 to the customer
Below that is the further breakdown:
-The pharmacy was paid $3.35 for the medicine, plus a dollar and seventy cents for all the preparation, bottles, labels, staff time in assisting you, etc., etc.
-There is no sales tax on prescriptions in the state where this claim was processed.
-This equals the $5.05 'total amount approved', which is the part that eventually goes to the pharmacy.
-The 'amount paid by insurance' is a MINUS $5.50 because they will eventually be taking that money back.
In other words, instead of paying anything at all, the insurance company ADDED a 'processor fee' of $5,50 (raised the customer's price) to cover the take-back. The way the insurance company gets the fee is that they will take it from the pharmacy later -- out of the extra money you paid.
As you can see, this scheme results in MORE costs to you. The reason you bought insurance is that you expected insurance to pay a portion of the cost. However, that didn't happen and you have now paid even more in the form of a "processor fee". The insurance company is skimming money off the top like a mob shakedown.
So how do we fix it? It's really not that difficult. Here are a few things that can help:
- Ask your doctor for generic drugs. You'll usually come out better, with or without insurance
- You do not have to use your insurance, especially if the price without insurance is lower
- Some people may not need prescription insurance
- Some consumers have noted that they were paying hundreds of dollars a month in premiums and that their co-pays were also close to that amount. By using a fairly priced pharmacy, they could literally buy all their drugs at regular price for less than the cost of the premium alone. These folks were using generic medications.
- Use your influence with your company or politicians to insist that the insurance companies use the money that you are paying them for your benefit. They do have administrative costs, but most of the premium money should still go to your care and not their pockets.
- Insist that insurance companies should not be allowed to up-charge you as in the example above
- Insist insurance companies pay a fair rate to all providers. Your pharmacy or your doctor or dentist won't be open long (or won't take your insurance) if they continue to be paid unfair rates, as in the example.
Some states have consumer protection laws. Check out the ones for Tennessee here.