February 1, 2012

Beat the Healthcare Squeeze: QC Families Find Ways to Save

Information from Mississippi Valley Health News Online

For one Moline family, when health-care costs exceed their mortgage payments, any opportunity to save is money in the bank.

Lisa and Jeremy Larson appear to make a healthy living: he is self-employed in financial services, and she’s a partner in a two-person IT consultant firm. They have four healthy and rambunctious children, and their health-care expenses are staggering.

“Between premiums, deductibles, and co-pays, health-care costs more than our mortgage. And we live in a five-bedroom house that includes offices for both our businesses,” says Jeremy. “Being self-employed, we feel the pain of increasing health-care costs, but at least we are working. I can’t imagine how the economy and unemployment are affecting those who can’t afford to get sick.”

How much pain?

The Larson’s pay just over $1,000 a month in premiums, plus they have a $5,000 family deductible. If someone gets sick, and with four kids under 14, someone will, it is easy for the Larson’s to spend at least $17,000 per year on healthcare. (When you add glasses, braces and regular dental care for all six of them, breaking through the $20,000 mark is routine.)

Last year, Lisa had a simple bladder procedure. Even though she was careful to check prices beforehand and choose her least expensive alternative – an ambulatory surgery center – the Larson’s paid about $2,000 out of pocket that wasn’t covered by health

“You think you are covered and then you get the bills. Until you meet the deductible, it’s all out of pocket, and even after meeting it, we still pay a percentage. It becomes a lot of money,” says Lisa. “And it’s all after-tax dollars for us because we’re self-employed. We can’t have flex-spend or health-care savings accounts.

Red ink rising

The Larsons feel the impact of rising health insurance premiums more directly than people who get insurance through their employer, but everyone is affected. Average premiums for family coverage have increased 113 percent since 2001, according to the Kaiser/HRET survey of Employer-sponsored Health Benefits, 2001-2011 (ehbs.kff.org/). In comparison, wages have increased over the same period by 34 percent.

“The nine percent increase in premiums in 2011 is especially painful for workers and employers struggling through a weak recovery,” Kaiser President and CEO Drew Altman, Ph.D. said.

The Kaiser report (ehbs.kff.org/) went on to point out that employers are passing more than just the increases along to workers. While premiums went up 113 percent, workers’ contributions went up 131 percent.

Budget for the premium package

The days are gone when simply paying health insurance premiums and automatically going to your doctor and the local hospital for treatment is enough for peace of mind. “It’s really time that patients exercise their power and ask questions about how much their procedures cost and determine if there is a more economical way to receive treatment without compromising quality,” advises Michael Patterson, CEO and president of Mississippi Valley Surgery Center (MVSC), Davenport. (qchealthnews.com/2012/01/beating-the-healthcare-squeeze-2/mvsurgerycenter.com).

MVSC is a Quad City area ambulatory surgery center that offers surgical procedures on an outpatient basis, which means patients recover at home. “The MVSC, and its practice partners in the Mississippi Valley Health Network (mvhnetwork.com/), are trained to employ minimally invasive procedures that mean smaller incisions and faster healing, all while ensuring quality of care.

“We also believe in delivering quality health-care value. Patients do not incur significant hospitalization costs because the Mississippi Valley Surgery Center is an outpatient facility. Patients recover at home, healing quickly and return to life as soon as possible,” adds Patterson.

As surgical techniques have improved in recent years, more procedures are being performed at Ambulatory Surgery Centers (ASC). And procedures performed at an ASC cost significantly less than the same procedures performed in a hospital setting, according to a November 2006 US GAO Congressional Committee’s report on Medicare. www.cms.hhs.gov/apps/media/press/release.asp?Counter=1948.

“That’s good news for working families and also for seniors,” adds Patterson. “If we can minimize costs, patients pay less. For example, seniors often pay less for a procedure performed at the MVSC than at a hospital because we are actually paid 59 percent of the rate paid to hospitals. Since the Medicare consumer is responsible for paying 20 percent coinsurance, the lower the charges, the smaller the bills for seniors who do not have supplementary

Employers are also looking carefully at incentives for employees to help minimize health care costs. New kinds of benefit plans will be a major change for employees used to company benefit plans that take care of health-care costs effortlessly.

The Kaiser Family Foundation reports that millions of workers are already enrolled in consumer-driven plans, about equally divided between high-deductible plans that qualify for a Health Saving Account (HSA) and plans with a Health Reimbursement Arrangement (HRA). The high deductibles that come with these plans are offset by tax-preferred savings options from which employees can pay for their out-of-pocket medical expenses. People insured under these plans pay directly for a greater share of their health care – and they have incentives to minimize the cost.

Healthy living for healthy savings

In general, as health-care costs increase and the political debates heat up, experts predict that employees and their families will need to take greater responsibility for their lifestyles and the costs associated with illness. As one Forbes health care expert put it, “Companies are going to encourage employees to look after their own health and will use the lever of insurance…if you want to smoke and eat a sugary diet, go ahead, but insurance coverage will kick in at a higher level.”