One of the things most publicized since the inception of the Affordable Care Act has been the “sticker shock.” This refers to the unpleasant discovery by most health consumers that the price for an ACA-compliant health plan is much more expensive than they had been led to believe.
Sticker Shock Doesn’t End With the Premium
However, another area where sticker shock is taking consumers by surprise is the cost of services related to their health plan beyond the initial premium charge. A large majority of consumers are finding out what insurance experts have long been telling them: the actual out-of-pocket expenses of certain plans make them more expensive in the long run. Therefore, people who have been choosing the cheapest plan on the health exchange in terms of premium are finding that the additional expenses involved with their plan are often quite unaffordable.
An example of this is an individual who does not qualify for a premium subsidy because he makes more than 400 percent of the Federal Poverty Level (FPL) of $45,960. In the interest of paying a lower monthly premium, he chooses the least expensive Bronze health plan. However, he must still pay the deductible before the insurance will kick in and begin to pay anything. Although out-of-pocket expenses have been capped at $6,350 for an individual, the monthly premium is not the only thing a consumer should be concerned about!
Price Transparency Is Vital
Hand in hand with sticker shock for health consumers is the issue of price transparency. I have long believed that people should be able to shop around and compare prices before having medical services provided. I also believe that doctors and other health care providers have a responsibility to their patients to be completely up-front about the cost of their services. However, this is very rarely the case.
For some reason, health care providers are reluctant at best to talk openly about the costs associated with any suggested treatment. At worst they can’t even tell you what the exact cost will be! If you are diagnosed with pneumonia and require an antibiotic, your doctor is likely to prescribe whatever medicine he sees fit without regard for the cost to you. Imagine your shock when you have your prescription filled and find that it costs $100! For some people this may not be an issue—but for people who have no prescription drug coverage or co-pays that only cover generic medicine, this has the potential to create a lot of unnecessary financial strain.
Have the Cost Conversation
Although I am not in favor of the Affordable Care Act and have made no pretense otherwise, I do believe that it could open up a helpful and informative dialogue between health care providers and their patients about the actual cost of the care being provided. Whether your insurance plan covers most of your medical services or very little, price transparency is something that will benefit everyone in the long run.
Imagine a completely different scenario with the same diagnosis. Your doctor prescribes a drug regimen that will surely treat your pneumonia—but instead of blindly accepting the prescriptions and running down to have them filled, you begin a discussion about cost with your doctor. If he prescribes you a well-known name brand antibiotic, you can ask if there is a generic one that is comparable. Sometimes an inhaler is necessary—do you absolutely have to have the high-priced one or is there a cheaper version that will perform the same? I would be willing to wager that 9 times out of 10, the answer is yes.
Price transparency can also apply to diagnostic tests. For example, if your doctor believes you have pneumonia and wants a chest x-ray to double check, ask him if it is going to change his treatment plan. If the answer is no, do you really need to have the chest x-ray? More than likely, the answer is no. If the answer is yes, ask your doctor about the potential benefits of the procedure to find out whether it is absolutely necessary. There may be times when it is, but it is definitely worth asking.
Use Your Better Judgment
I would never suggest that you decline any test your doctor deems necessary to diagnose or treat an illness or accident. I do suggest, though, that you are open and honest with your doctor about the financial impact it could have on you.
Many times, doctors err on the side of caution in order to avoid potential accusations of malpractice, which is understandable from their viewpoint. This should not mean that you have to have every test possible done on a “just in case” basis. You are the patient and have the right to question, accept or refuse any treatment prescribed by your doctor.
For example, a colleague of mine, Erin, was recently told that she needed to have a cat scan of her chest due to a chronic cough. Even though the CT scan would not change her treatment in any way, it was still ordered “just in case.” Erin has not yet met her deductible and is responsible for the full cost of the test. Since she could not get an accurate estimate of her out-of-pocket cost and since a conversation with her doctor helped determine that her treatment would not change, Erin declined the test.
Knowing the Cost Benefits
Paying exorbitant monthly premiums for an insurance plan that may or may not cover many medical services is enough sticker shock for anyone. Health care providers should be made aware of the financial ramifications of any treatment prescribed and help their patients avoid sticker shock at the pharmacy, the physical therapist, or the lab!
However, you as a health consumer are equally responsible for having this conversation with your provider. Make sure you ask questions about the cost of different treatment options and question whether they are absolutely necessary to treat your illness. In the past, physicians operated on the premise that the cost should not matter and that you should simply accept that you had to pay what you were charged. This does not have to be the case, and certainly should not!
If the ACA does empower individuals to take control of their own health care and demand price transparency for any treatment suggested, then at least one good thing will come out of it.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.