The Premium Payoff: How Health Insurance Saves You Money
According to hhs.gov, over 49 million Americans do not currently have health insurance. The funny thing about being human is that we are all going to need healthcare eventually. It’s a virtual certainty because we all get older and all eventually die, that’s the cold hard truth. The closer we get to that eventuality, the higher the likelihood that we will need care. In order to protect your personal finances and keep from going bankrupt due to the exponential increase in healthcare costs, you need health insurance.
A common rationalization by the uninsured is that healthcare is so expensive in general that you should save on paying the premiums associated with health insurance. The irony of that statement is that not carrying health insurance does end up costing you more in the long run. One of the main reasons for that is because insurance companies negotiate discounted rates for nearly every service.
All medical providers have what’s referred to as a UCR (usual customary rate) for every billable service they provide. The UCR for each procedure is much higher than what the provider’s contracted rate would be with an insurance company. The insurance discount is commonly from 40-60% off the UCR for each service rendered. Even if you get stuck paying out of pocket because you haven’t met your deductible, you would only be responsible for the total according to your insurance’s contracted rate which is significantly less.
The idea behind health insurance is that you pay the premium so the company can cover services. This is true, but an insurance company will sometimes require the provider to go through a process known as precertification. Why is this good for your wallet? It’s good because it forces providers to qualify the medical necessity behind each procedure before getting confirmation the service will be reimbursed.
During the process of precertification the insurance company will require the provider to submit certain medical documentation such as diagnosis codes, past medical history or prognosis. The insurance company will then use this information to verify that the procedure in question is medically necessary. This protects you from getting tests or procedures done that you don’t need. If you didn’t have insurance, a doctor could have you get an MRI that you might not need, which would then incur a cost of several thousand dollars to you. Ouch.
If you have health insurance hopefully by this point you are nodding your head in approval. If you don’t have it, hopefully you’re now motivated by some of the less obvious facts relating to how insurance saves you money. Although it sometimes looks ugly on the outside, when you examine it a little more closely you can see that appearances are deceiving at times. Although everyone appears healthy on the outside, the reality is we will all need care eventually, so make sure you’re prepared.