The Perils of ‘Co-Insurance’!

by Rick Davis | Nov 30, 2019 | Advocacy, Cancer Caregivers, Cancer Resources, Health Resources, Recent News

It’s that time of year when we decide if we are going to change our medical coverage for the coming year – whether it’s a switch during open enrollment or changing our supplemental Medicare insurance.

Over the past 12 months, I’ve discovered that it serves you well to avoid coinsurance. I am sure there are many reasons, but together the two laid out below make co-insurance requirements as welcome as a fish head on your doorstep!

But before you smell how bad ‘coinsurance’ can be, let’s explain what it is. Unless you have insurance that has no additional obligations beyond your premiums and deductibles, you will be required to make additional contributions for your health care on each provider visit. The payment comes in one of two flavors:

• ‘Co-Pay’ where the insured pays a fixed amount. For example, my policy has a:
  • $10 co-pay to see my PCP; $35 if out of network.
  • $45 to see an in-network specialist, $70 if out of network
  • $5 for all lab tests obtained on the same visit
  • $225/night for each night spent in hospital
• ‘Co-Insurance’ where the insured pays a percentage of the contract cost of services. My policy requires:
  • 20% of the cost for outpatient services in-network, like my use of the wound clinic; 40% out of network
  • 20% of diagnostic radiology like MRI’s; 40% out of network
  • 20% of diagnostic procedures like biopsies; 40% outside
  • And most scary if you have ever seen an IMRT bill, 20% for ‘therapeutic radiology’ – say for cancer; 40% if out of network.

Co-pays give you the comfort of knowing how much a visit will cost you – even if the pain of the amount balances the security of knowing how much. Co-insurance is open-ended!

If you have ever tried to find out in advance how much a procedure will cost, you will know why I say open ended. You can’t find out what it will cost, even if you try to. I needed an MRI earlier this year and discovered that the cost – or should I say the amount on which I would be charged 20%, was more closely held than the President’s financial statements.

Despite calls to several providers to price shop, and to my insurer United Healthcare who assured me they would identify my exposure, I never found a reliable number – and I had the correct billing code. The Director of Radiation Services at my local in-network hospital, was equally perplexed – she could not tell me what it would cost me other than it would be cheaper at their outpatient radiology offices than in the hospital. And the number provided by the radiology office bore as much resemblance to the amount finally used to figure my co-insurance as an orange does to a banana.

When that bill finally arrived this week, the full MRI cost was $4587 (!!!); the contract cost between the provider and the insurer was $824 of which my share was $$165. I had been told ahead of time the cost would be $358 and I would pay $72.

And even if you find the correct contract cost between the provider and the insurer, Medicare patients face a second issue – sequestration! What the heck, you ask, is sequestration. Well it’s an excuse on the part of the insurers to increase your co-insurance. Evidently ever since 2014, the insurers have actually paid the Providers 2% less than the maximum allowable amount approved by Medicare and used to determine your co-insurance billing. So in fact the patient pays a higher co-pay, the insurer pays the Provider less and it pockets the difference. This is ‘clearly’ explained on the back of my Medicare Monthly Explanation of Benefits in a box that states,” Plan Share may include a 2% Reduction for Sequestration’!

Bottom line – avoid co-insurance. And the good news for me. Next year my policy has a $125 co-pay for MRI’s versus a 20% co-insurance. And by the way, I took up the difference in my MRI payment with the Provider based on the pre-visit quote of $358; they agreed to waive the difference – you are your best advocate!