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I’m sure you know you should always read your insurance polices carefully.
Insurance companies like to make you think they are offering more coverage than they are. They also like to distract you from reading the fine print.
In fact, some insurance companies can completely drop your coverage just because you use it.
That’s right, in certain states, insurance companies are allowed to drop you if you file a certain amount of claims within a certain time period. In several states, you only have to make two claims before they can decide that you’re not worth it and drop you.
Those are all great reasons to watch your insurance company like a hawk, but we’re actually not here today to talk about insurance companies. Yes, be aware of all of those things (more about that here), but there’s something else you need to be aware of and pay attention to: your health insurance.
Yes you need to check your coverage and read the fine print, but who you really have to watch is not the actual insurance company, it’s the places that take your insurance…
How Much is Your Insurance Company Paying?
You may be quick to show your insurance card and book it out of there when you’re at the hospital or a doctor’s office.
How often do you actually look at your bill when your insurance is paying for it?
A common answer is “I don’t really look at it, because I’m not paying for it” or “I don’t care what my insurance company has to pay. They are robbing me in premiums, so they can pay thousands for all I care.”
I totally understand that. Insurance companies are frustrating and it’s easy to feel like you’re being robbed…but that’s not the point. Follow me on this…
A $200 Tylenol
When my wife had our first child, we were covered by insurance. We paid absolutely nothing (other than our insurance premium).
Of course, they still sent us the bill for our records. So we started reviewing it and realized that we paid $200 for a single Tylenol. Seems a little high right? Like almost $200 too high when you consider the cost of a single Tylenol (around 15 cents).
But that’s fine, right? Insurance companies should suffer. I’m paying an arm and a leg for my premiums, so they should at least have to give a pinky for a Tylenol…
No. That’s not right…because it affects you. Maybe not today. Maybe not this month, but it will affect you.
It’s called inflation.
Yes insurance companies have to pay for that $200 Tylenol. And at first, it seems pretty funny, like you’re “sticking it to the man”, but when you realize how it affects inflation, it’s not as funny.
How Inflation Works in the Job Market
The hospital overcharges for services and medicine, so in return, the insurance company has to raise their premiums, which directly affects you.
It just like inflation among professionals…
If insurance companies are being overcharged, they will have to raise their rates. This will ultimately lead to doctors raising their rates. And that actually requires the insurance companies to raise their rates again. When the lawyers (who are fighting these insurance battles in court) see the rates rise, they demand more money. Finally, the teachers and other professionals want more money, as they should, when everyone else is making more. It’s all about balance. And the desire for fairness…and a little bit of greed.
If the cost of something goes up, it always affects something else. If you’re a business owner, you know you can’t just raise your prices without related businesses doing the same…or otherwise, you will just go out of business.
That’s enough economics for one day, back to insurance companies…
What You Can Do About It
The main thing we can all do is pay attention. Here are the things to watch for:
- Blatantly overpriced items. Obviously $200 is way too much for a Tylenol. Make sure your prices are reasonable, considering what they’re charging you for.
- Services you didn’t get. Sometimes doctors plan to do things and don’t. Other times they just say they did things they didn’t do. Watch for both on your bill.
- Unnecessary fees. When you pay cash, without insurance, you won’t usually see these weird fees. But when you pay with insurance, watch for ridiculous fees that don’t make sense.
We need to hold these places accountable, just like we need to hold insurance companies accountable. If you see something weird on your bill, call the hospital/doctor’s office/clinic to discuss the charge.
Pay attention to your bill and your charges. Don’t be one of “those people” who let the insurance company pay whatever. All that does is cause your premiums to skyrocket.
Do yourself a favor. Be aware. Be a savvy consumer. Companies will hate you for it.
Photo Credit: Gratisography