OK, there are a metric ton of Health Care threads on the Dope in one form or another and I’m not wishing to add another superfluous one to the pile. However, as a 30-something American male with an impeccable health record I’ve come to realize that I don’t understand much of anything about how our current system and it’s implications. I figured instead of just asking vague questions the best teaching opportunity would be to create some hypothetical situations and hear what the likely course of events would be and how it’d impact the patients life from both a health and financial standpoint.
Case 1
Patient: John Smith, Male, Single, Age 30
Occupation: Mid-level Marketing Manager for a Fortune 500 company
Coverage: Typical HMO
Health History: Healthy, Non-Smoker, 30 lbs. Overweight
Scenario
John is sitting at his workstation and begins feeling faint. His vision is blurry and he has felt weak and tired for quite some time. John hasn’t been to a doctor since college and having just turned 30 he figures a visit to the doctor wouldn’t be a bad idea for a check-up in light of these unsettling new symptoms. When he arrives the doctor does some basic tests and draws some blood. About a week later he gets a call asking him to come back into the office. John is panicked and sleepless for that evening until he gets in to see his doc at noon the next day. He informed that he has Type 2 Diabetes.
The Questions
Approximately what has John been paying for his basic, average HMO health coverage? John is non-union and opted for the HMO instead of his companies more expensive PPO option. What were his monthly premiums? What portion did his employer pay? What were his copays?
What will John be paying for his coverage going forward? What will his employer be paying? How does being diagnosed with a chronic, lifelong condition affect his Health Care costs for the rest of his days?
What will his out of pocket expenses be for testing supplies and insulin? What will it cost for frequent doctor visits?
What happens if he get’s fired/laid off from his job? What happens to his coverage? How do the prices change?
What happens if he wants to voluntarily take a new job with another company? Can/will he be refused new coverage at his new company? Will changing jobs effect his premiums?
I know there are a ton of assumptions that need to be made and there are probably a lot of variables but I think some educated guesses can be made. Most of my questions are about the costs of such a diagnosis in our system, but I’m interested in other ramifications that I haven’t thought of. Where does John end up? How much a problem is this going to be in his life? Is his treatment good? How could his treatment be better?
Let’s try to not stray too much from the scenario I’ve set up. If this thread works out like I hope and the answers are informative and lead to new questions I intend to start new threads with new scenarios to explore the state of the Health Care System deeper.
I worked for a major benefits administration company until recently. This is all highly variable but I can take some educated guesses.
If it is single person coverage, it would probably be about $150 a month out of his paycheck. His copays are probably about $20 to see his primary care doctor and maybe double that for specialists. The employee generally pays half to 2/3’s of the premium.
Group coverage is not generally affected by either pre-existing conditions or newly developed conditions. That is why it is a group plan. The actuaries at the insurance companies spread the risk among all employees.
Diabetics have to pay for some supplies on their own but that depends on the plan. Most supplies aren’t all that expensive and are over the counter. I just saw someone get explained this at a local CVS pharmacy. He just has to pay the usual co-pay.
You go on COBRA insurance for up to 18 months (I think that is the timeframe). It can be tremendously expensive and well over $1200 a month for a family plan but much less for singles. Figure maybe $400 a month for a single plan for an HMO but maybe less. You generally just pay the whole price of the plan yourself although some severance packages subsidize it.
There are strong laws about insurance portability. It goes back to the group plan idea. You usually just get to enroll in the plans your new employer offers no matter what.
My understanding is that’s a bit of a half-truth which clouds the issue. If I’m wrong, feel free to correct me, but to say that “group coverage is not generally affected by “conditions”” is a) right in the sense that you won’t have a preexisting condition rider stapled to your policy but is b) way wrong because your entire group will be paying for your actuarial riskiness (and everyone elese’s too) which may result in massive increases in the premiums the insurer is demanding. whether that gets picked up by the employer or the employee is another story, and whether either group can afford the increase is another story yet still.
Is it safe to say that John will be completely required to work for large companies with group policies for the rest of his life in order to afford health care?
The laws for insurance portability? What does that mean? That you can take you plan with you? What if John has Blue Cross/Blue Shield coverage with Coca-Cola and then decides he wants to take a better job with Safeway who only offers United Health Care coverage?
If John gets diabetes with BCBS HMO coverage is he trapped with that coverage forever? Can he upgrade to the PPO with his original employer that has a lower deductible, no co-pays and drug coverage? Will the difference in his premiums be any different than if he had upgraded prior to being diagnosed? Will the employer’s costs go up at all under any circumstance? Do they have an incentive to not employ a diabetic with increased medical costs?
No, you don’t get to carry your policy for life. It just means your prior coverage is credited against a maximum “preexisting limitation period”. Normally group policies can refuse to pay for prexisting conditions for up to 12 months (while you’re paying for the policy) unless you have “credible coverage” from a prior “credible” health insurance policy. that prior policy then acts as a credit towards reducing the 12-month period.
i can only speak to the last question as the others require knowledge that i don’t possess. (edit) actually, i do have a bit of knowledge. you can only usually modify your health insurance options (that is even if your employer offers the option) during so-called “open enrollment periods” or “enrollment events” such as being hired, getting married, having a kid (when those happen you have the option to add them on, regardless of when they occur). the difference in premium concern you touch about is moot - the health insurance provider re-calculates the premium they want from the employer every year (in most cases) so he won’t save himself money.
yes. to a small business i can conceive of a scenario where someone’s employment is prejudiced by their medical condition. but, it’d have to be an overt medical problem if they wanted to not hire you. however, i am sure there are cases of people getting canned because, during the course of their employment, they were costing the employer too much money (health insurance wise) and the employer found a creative way to can them.
Is it safe to say that John will be completely required to work for large companies with group policies for the rest of his life in order to afford health care?
Not necessarily large companies. Most smaller companies offer group coverage too but that would always have to be a consideration for where to work. Starting his own small business may be hindered by his health situation. Private health insurance for that type of condition can be cost prohibitive for many people.
**The laws for insurance portability? What does that mean? That you can take you plan with you? What if John has Blue Cross/Blue Shield coverage with Coca-Cola and then decides he wants to take a better job with Safeway who only offers United Health Care coverage? **
You don’t get to take the plan with you unless the new employer offers the same thing which is reasonably likely because there aren’t that many big players. You get a legal document called Evidence of Insurability that helps facilitate transfer to a new plan regardless of pre-existing conditions although you may not need it. Different states are all over the place with this stuff. New Jersey and Massachusetts have strong laws about insurance portability for instance and there are federal laws as well.
If John gets diabetes with BCBS HMO coverage is he trapped with that coverage forever? Can he upgrade to the PPO with his original employer that has a lower deductible, no co-pays and drug coverage? Will the difference in his premiums be any different than if he had upgraded prior to being diagnosed? Will the employer’s costs go up at all under any circumstance? Do they have an incentive to not employ a diabetic with increased medical costs?
Once you leave your original employer, they have nothing to do with your health plan unless you got laid off and you got benefits in the severance package (or some types of pensions). You just switch when you go to your new employer even though it may technically be the same plan but the new employer may not offer your old one either. Companies negotiate with insurance companies for different things even though it may be the same plan you had before.
I’ve seen a lot of peoples copays for testing supplies. The over all price they’ll pay depends on how often they test, but, the copay for a box of 100 strips normally costs between $10 and $50. Now, since the box without insurance will cost about $110 or so, that is still a decent amount covered. Probably the most common co-pay I see is $25. Then you need your lancets, some insurance companies won’t pay for it at all, the ones that do, the copay is normally between $5 and $10. The price without insurance for lancets is normally about $15, so not expensive either way. As for the machine itself, normally it will be free, but could have a co-pay for as much as $10.
As for Insulin, most Type II diabetics don’t take insulin. Normally a type II diabetic will be started on something like Metformin. Copay for that is at most $10 to $15 for a month supply… But it is on the $4 list at most drug stores.
Except they have information about what claims have been made on the policy and what claims have been paid out?
They sit there, annually, look at every bill they paid out from every member of the group in excruciating detail, and ask “do we need to be charging them more?”
That is partially true but the actuaries that calculate the risk for group plans are experts in statistics and know that, at least for larger companies, “X” percentage of people are going to be diabetic and “Y” percentage are going to develop either major health problems or have major trauma during the year. It is true that a 22 year old non-smoker in perfect health subsidizes her coworker who is a drinking fiend who loves to skydive, has a congenital heart condition, and drag races every Saturday night but that is just the way group plans work. They spread the risk. It isn’t completely unfair. The risk for those two could reverse in ten years.
This reads as legalese. Can you give an example with estimated dollar figures? As written it doesn’t clarify the situation to this layman at all.
In my past jobs there’s always been an annual “enrollment period”. I was always able to change my plan from HMO to PPO during this period. If the HMO cost $75 a month to John in January, 2009 and the PPO cost $150 a month at that same time before his diagnosis he could have chosen either. Assuming he still works with the same company in January 2010, after the diagnosis, can he still upgrade to the PPO for $150 (or whatever the new group rate would have been for 2010 were he not diagnosed?)
This question presumed the situation that John wasn’t changing companies, only that he opted to change his level of coverage within his current employers open enrollment period.
Sure you can generally do that. There shouldn’t be any issue and people do it all the time. That is the biggest reason open enrollment exists and why it is called “open”. My job was as a Systems Analyst designing and sending off feeds to the different insurance carriers. Open enrollment is the busiest time of the year by far with a flurry of changes coming in from employees at all different types of companies. In fact, employees generally have to re-enroll every year at larger companies and you can pick what you want for all benefits.
This seem perfectly fine, but it seems incredibly dependent on the size of a given company. If John was sick and instead working for a 20 person business as opposed to a Fortune 500 company that situation could be much more traumatic for the whole company and it’s employees.
*A group plan is allowed to not pay for preexisting conditions for up to 12 months upon enrollment in the group plan
*That 12 month period may be reduced by the applicant having prior “credible coverage” - meaning, generally, another health insurance plan
I am unsure how the reduction is calculated; I believe it is a 1:1 ratio and you can use it to completely eliminate the new insurance policy’s preexisting condition period.
I don’t know. Probably during the next open enrollment period?
(Take this one with a grain of salt, please, I’m not 100% sure) Most extremely large companies self-insure and they merely pay a health insurance company to administer their plan for them.
Maybe in a the tinniest of ways but I doubt it. He would have to pay more for say a PPO rather than an HMO if he wants to change but the actuaries don’t know John and don’t care unless the company is very small. They already have the numbers worked out statistically and there are always diabetics coming and going in every large company and they know what to expect. That is what actuaries do. The rates may go up from year to year but that shouldn’t have anything to do with John.
To get some baseline estimated numbers for the hypothetical case we’ve gotten suggestions of $150/month for the employee. With 50%-75% paid by the employer.
John Smith’s Health Care Costs
Total Premiums Before Diagnosis: ~$400/month
Total Premiums After Diagnosis: ~$400/month*
Co-Pay for Doctors Visits: $20/visit
Co-Pay for Testing Supplies: $35/package
Assumes John works for a large Fortune 500 company with thousands of employees so that adjusted group prices are negligible.
So, I don’t know how many doctors visits a diabetes diagnosis creates annually on average or how many strips/lancets and devices one would need per year. Anyone think these estimates are way out of line? What else do you think is relevant to get an idea of what this this costs a guy?