We have a nephew who lives in Switzerland whose wife recently gave birth to their second son. She stayed in hospital for an entire week and the blessed event cost them … nothing. Contrast that with this report from the New York Times, detailing the high cost of childbirth in the States. Obamacare is an attempt by the Government to “do something” about the problem. Whether you’re a fan or hater of Obamacare, there can be no doubt that the real problem isn’t the political party on either side of the argument — it’s the high cost of healthcare in America. That’s why I started to look beyond Obamacare to find other solutions.
The Problem
Healthcare in America is the most expensive in the world, and it’s not even close. Anyone who doubts that can look at this presentation a year ago by the International Federation of Health Plans comparing healthcare costs in developed countries. Here is an example, showing the cost of a hospital day in various developed countries:
Credit: International Federation of Health Plans
That’s right: A day in an American hospital costs almost ten times as much as in the next-most-expensive country. That’s true for just about every aspect of healthcare. Some may think, “Well, you get what you pay for. Our healthcare has to be the best if it’s so expensive.”
Wrong.
This chart from an OECD study shows the exact opposite. By just about any definition you care to use, the quality of care in America is among the lowest in the civilized world. This Reuters report puts America at the very bottom of that list.
The facts, then, are simple: Healthcare in America is among the most expensive, and worst, in the world. One of the big reasons is the actions of intermediaries who have nothing to do with your or my health and its care.
The Solution
If your job offers you healthcare coverage, this escalation of healthcare costs may not concern you … yet. However, with the new law making it mandatory for those who can’t afford healthcare to get it, more people are looking for options that make sense for them. And so, while the public (and after-dinner) debates have been raging over the problem and the cure currently legislated, millions of people are beginning to discover something the health insurance industry doesn’t want you to know: There is a cheaper alternative, and it’s every bit as good as the current healthcare system.
That’s because it is the current system, only without the bureaucracy.
I discovered it a while ago, when my wife and I were both out of healthcare-paying jobs and were on our own. We have pretty incredible doctors, a husband-and-wife team. When we told them we didn’t have health insurance anymore, he said he’d work with us. In the years that followed, it was amazing to see how much we saved. To be fair, we are blessed with good health, so we were spared the cost of a catastrophe. But, knowing our situation, our doctor charged us $60 per visit and then conveniently “forgot” to charge us a few times. When I had plantar fasciitis, he told me how to simply walk it off — no charge. Unfortunately, when I had to do a colonoscopy, I had to pay “full boat, ” but even that specialist knocked down the bill to a level I suspect is way under what they would have charged an insurer.
A physician friend of ours confirmed that this quiet underworld of cash billing for healthcare has been growing. Doctors hate the insurance bureaucracy and they say most of their escalating expenses are due to billing specialists they need to add to their staff to push the red tape up the hill, to mix metaphors. He recently quit from the practice he was part of to open his own new practice to simply provide healthcare without the red tape — for much less than his old firm had to charge the insurance companies.
You can dismiss these as isolated anecdotes, but they are part of a growing trend. The mainstream media are beginning to pick up on it too, as you can see from these articles in CNN/Money and the New York Times.
Your Options
As with any new movement, the number of options available to someone looking for treatment outside of traditional, insurance-driven healthcare is growing daily. Two blogs focusing on this growing area with news of evolving resources are The Self-Pay Patient and Healthcare For Less. The author of the first blog, Sean Parnell, also published a book called “The Self-Pay Patient, ” and it contains comprehensive lists of resources available to anybody who wants to go this route. (Disclaimer: Not affiliated. I bought the book for full retail.) His blog contains updates to the resources listed in his book, so together they make a must-have resource directory for a space that’s evolving rather rapidly. One example is the growing list of cash-friendly doctors across the country.
An interesting alternative to traditional insurance few of us would have thought of is healthcare-sharing ministries. These are voluntary, nonprofit organizations of people who agree to share each other’s medical bills, which is similar to how insurance operates. Most are based on a certain faith — but one, Liberty HealthShare, has no limitations regarding religious beliefs. Members of these organizations are exempt from the tax to be imposed on those not carrying mandated Obamacare health insurance.
Other resources worth checking out are short-term health insurance, critical-illness insurance and fixed-benefit insurance. Because these are rapidly growing sub-fields of medicine, your best bet is to Google them as search terms from time to time to get up-to-date information.
Who?
Self-pay medicine is not the most suitable option for everybody, especially for:
- people with chronic health issues
- low-income people whose Obamacare premiums would be subsidized
- people who don’t mind long waits for doctors
- people who don’t care that their medical records are widely visible to thousands of bureaucrats
- people who don’t have high-deductible healthcare plans through their workplace
The advent of mandatory health insurance has prompted many to go for high-deductible plans to keep premiums low. Folks on those plans will still have to pay their day-to-day medical expenses at “normal” (i.e. cash) prices. The resources listed here will allow those folks to lower their day-to-day medical care costs.
If you’re stuck in a place where you have no recourse to affordable healthcare, you may want to talk to your doctor to find out if they have options outside of their traditional insurance-driven system. Beyond that, you might want to make use of the resources listed above to find coverage options which offer protection against big-ticket medical expenses.
Chances are we won’t recognize the healthcare landscape in America ten years from now. Rather than wait and be caught unawares, it’s worth checking out this evolving arena. You never know when something might pop up that could make total sense for you and your family.
One Example
We were on my wife’s employer’s health insurance plan; but after she retired, we had to decide how to proceed. We received the full information package from a Christian healthcare-sharing ministry, called CHM (Christian Healthcare Ministries). They offer three participation levels: Bronze, Silver and Gold. They don’t call them plans, and they don’t call what you pay every month a premium. A nonprofit ministry, what they do is create a network where members share their healthcare expenses.
It is a lot less than what we would call traditional health insurance. Their participation levels break down as follows:
- Bronze – $45 per month per person
- Silver – $85
- Gold – $150
They don’t pay healthcare providers; they only reimburse you. The deductible (they don’t call it that, but that is what it amounts to) varies according to your participation level: $5, 000 for Bronze down to $500 for Gold. Reimbursement usually takes around three months or so, so a member needs to have the means to carry their medical costs for that period until reimbursement is made.
Bottom Line
If you have affordable coverage, you’re fortunate. For those who don’t, for instance those who worked hard to retire early, self-pay medicine is a rapidly growing area with the potential for substantial savings over traditional health insurance.
The second sentence of your article is incorrect. It’s not possible it “cost them nothing”. Somehow, somewhere they paid. Nothing is free.
Great post, I always encourage people to have some form of insurance after a friend of mine got in an accident with no insurance. Now she can’t get affordable insurance and has to pay for everything out of pocket.
I applied and got approved for ObamaCare silver package for my wife and I. The monthly premium is surprisingly affordable.
You forgo insurance and get a major medical issue: don’t worry, because once you’ve been bankrupted due to your medical bills, the tax payers will step in and cover you via Medicaid and other safety nets.
Anybody who has amassed any wealth would be a fool to drop their medical insurance. I do agree that if you are penniless there is no point in purchasing insurance (of any kind for that matter).
I went without healthcare for a little while and I found the same thing – I am a fairly healthy person, so when I went in for regular visits, doctors typically had a policy with cash customers. On top of this, you can potentially negotiate an even lower price. This would not work, however, for my fiance, since he visits the doctors more frequently than I do.
Your graph is very misleading. It shows that a hospital stay in the United States is three times the cost of the next closest country, not ten. You have to compare average to average, not average to 95th percentile.
Your article is interesting, but you’re not talking about health insurance. You’re talking about health maintenance. The problem is our healthcare industry increasingly does not differentiate between the two. Your method is a cost-effective way of addressing health maintenance, but it will leave you in a real mess if you contract cancer or are in a major accident. Those events require insurance.
Health insurance costs have ballooned out of control because people are using “insurance” to pay for “maintenance.” Think of it this way: you can buy basic car insurance for a few hundred dollars a year. For a few hundred dollars more, you can get collision/comprehensive coverage. What would car insurance cost if it was also expected to cover new tires, oil changes, engine trouble, scratched paint, car washes, and gas? Answer: it would cost a fortune. Now do you understand why health “insurance” is so expensive?
If I were in charge, I would require everyone to buy health insurance–something akin to catastrophic illness/accident coverage. It would likely be relatively cheap if you look at what high deductible plans cost today. Day-to-day health maintenance costs (checkups, doctor visits for minor illnesses and injuries, etc.) would be paid out-of-pocket and not covered by insurance. If you want to buy a health maintenance plan that would cover these items (but not major illnesses or injuries), I’m sure someone would offer one.
Very interesting article. All the information flying around is pretty confusing, and its been hard to tell what options are actually available. Learning about alternatives is really important in making a good choice.