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Paying Through Health Insurance
Let’s call him Person A. His son was having recurrent headaches. An MRI was called for.
Person A has health insurance through his employer. The employer pays 80% of the monthly premiums for the employee and 20% of the additional premiums for the family. Person A pays sizable out-of-pocket costs every month. He has a wife and three children.
The MRI cost $14,000! Person A’s out-of-pocket cost was $1,500, so insurance did its job. Person A adds, “But for a test like an MRI to cost that much is absolutely insane!”
Person B had a painful lower back and hip. MRI’s were called for, one for the lower back and one for the hip.
Person B also has employer health insurance. He has a wife and two children. He has to meet a deductible and then pay 20% of health care expense up to a certain amount.
If Person B had used his insurance, the out-of-pocket charges would have been a total of $2,040.
Person B decided to shop around. He looked online. He looked for MRI providers in out of-the-way places, and due to the large population of older people he looked in Florida. He lives in North Carolina. He looked for ACR accreditation. He read provider websites, reviewed their MRI images, the number of doctors they had, and the age of the MRI machine.
Person B flies to Ft. Myers, FL, on business, and he talked to an MRI provider there. He was quoted $500 for both MRI’s to be paid for by credit card, that is a total charge of $500. Then he spoke to his doctor in North Carolina. His doctor tried to dissuade him, saying that the images would probably be of low quality, but his doctor did provide the required prescription for the MRI’s.
When Person B’s doctor received the MRI images, he said they were clear. The damage was quite evident. Person B was very pleased with the facility and staff. The staff told him he did not even need an appointment! Person B says, “I then realized how idle the machine was. Perhaps, I should have negotiated for an even better price!” He saved $2,040 – $500 = $1,540.
By paying directly, Person B did not reduce his insurance deductible, and by paying through his insurance company Person A did. Everyone’s health care situation is different, many health care challenges are unique, and judgments must be made.
Not everyone has the tenacity, skill, and time of Person B to find low prices. (Person A has tenacity, skill, and maybe time, but he chose to go the insurance route in this case which may have been better for him and his family.) Also, one might say, “I don’t fly on business so I would not have been able to go to Florida.” Person B says that Lawrenceville, GA, near Atlanta, was another good possibility. Driving from eastern North Carolina to Lawrenceville would have been feasible for Person B.
This experience of Person A is a perfect example of a truism that when a third party, such as a health insurance company, is part of a transaction the cost of the transaction will rise. Add to that truism the fact that our health care system is anything but a free market system and one can realize why our health care costs are through the roof and irrational.
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