Bullshit on Stilts: Tackling the bullshitology of financial decisions.
Join two financial brains turned podcast hosts unleash their wit and wisdom drawing on vast financial backgrounds. Using highly-tuned bullshit sniffers they call out the clichés, crap spackle and flapdoodle spewed by so-called experts across the landscape of financial advice. Identifying as doctors of bullshitology you can count on your hosts to bring you a lively if not deadly mix of serious analysis, hijinx, and tomfoolery. All within a 99.1% bullshit free safe space.
Bullshit on Stilts: Tackling the bullshitology of financial decisions.
Killing Me Softly: My Health Care Costs
What if navigating healthcare costs didn't feel like decoding a secret language? This episode of Bullshit on Stilts takes you deep into the maze of healthcare expenses, likening them to an unavoidable cover charge that drains your finances, just like unexpected fees at a nightclub. We tackle the double-edged sword of healthcare and retirement savings, drawing intriguing parallels between the evolution of the financial services industry and the current state of health insurance, controlled by giants like Blue Cross and UnitedHealth. By breaking down the infamous 'charge master' prices and examining how insurers negotiate discounts, we shed light on the complex dynamics affecting your pocketbook.
Ever wondered why a $550 insurance premium could lead to a staggering $3,400 MRI bill? We demystify this perplexing scenario using our Chex Mix Paradox analogy, illustrating the frustratingly opaque world of medical billing. You'll learn about potential cost-saving avenues, such as charitable care at nonprofit hospitals, and the lifesaving financial assistance programs mandated by Section 501R of the IRS code. Our discussion emphasizes the importance of being informed and proactive, as understanding these options can make a significant difference in managing hefty medical expenses, and keeping more of what you earn inside your house rather than the health care house of cards.
Balancing risk and affordability in healthcare is a personal journey fraught with tough choices. We delve into the nitty-gritty of fully insured plans versus exchange options, offering strategic advice for families grappling with traditional insurance costs. Explore alternative pathways that, while not perfect, provide customizable financial exposure for significant medical events. By evaluating spending priorities and assessing the level of health care risk you're comfortable with, we aim to help you navigate the complicated healthcare landscape with more confidence and clarity. Tune in for a mix of serious analysis and a touch of humor, all in a space that's 99.1% bullshit-free!
Developing your financial bullshit sniffer one episode at a time.
Welcome to Bullshit on Stilts, a podcast hosted by two guys with vast financial backgrounds and great bullshit sniffers who call out the cliche crap, spackle and flap doodle, spooed by so-called experts across the landscape of financial advice Identifying as doctors of bullshitology. You can count on your esteemed hosts okay, maybe knuckleuckleheads to bring you a lively, if not deadly, mix of serious analysis, hijinks and tomfoolery, all within a 99.1 bullshit free, safe space. Let's get after it. When I was looking through this mark, the document that you put together here is setting up the discussion that we're going to have about health care out there Today.
Speaker 1:It's sort of the financial bogeyman between the premiums and the copayments and the deductibles and lions and tigers and bears. Oh my, you have this health insurance that we all agree with immediately. That's an important thing to have. We all agree immediately. That's an important thing to have. But at the same time, I think that there's an awful lot of financial stress, anxiety and even, in some cases, destruction due to the cost of healthcare and staying healthy and facing illnesses and diseases and shut up and take my money.
Speaker 2:I agree, and I think that it is very similar to what employers face Outside of labor costs. Number two is health care costs and I think if we relate that to the typical household, there are certain expenses that perhaps are more than their health care costs. But I know, as a worry combined with the cost, it's got to be number one or two on people's mind.
Speaker 1:In a lot of ways it's a have to right. You have to at least provide for caring for your health and in today's world you know families are spending between 10 and 20 grand alone just on premiums for them, the right to go see a doctor within some network, and then you get some freebies. Quote unquote. The cover charge is $10,000 to $20,000 a year out of your cash flow Not going into retirement, not building an emergency fund, not experiencing life a little bit more, but into the premiums of a. Really, in a lot of ways, the psychological have-to you suck.
Speaker 2:So you pay $500 to get into the nightclub Mm-hmm. And then you go in and you're overpaying for your vodka on the rocks. Fair enough, but have as much check mix as you want, we'll even refill the bowl.
Speaker 1:Yeah, and that's a really nice place. I mean, if we're talking checks, that's top-notch stuff man. I thought you were just going to go with. Go with just a pretzel or popcorn.
Speaker 2:What are you talking about?
Speaker 1:So you've spent a lot of time in the healthcare space over the last five, six, seven years now and it's interesting to get a take of a financial brain that has come along and did more of a, let's say, a financial analysis of healthcare From a big picture standpoint. The financial service industry, which we both come from, has gone through all sorts of different things in terms of the pricing of services offered, the ability and access to information for free, and on and on, and on and on, and those forces have shaped the industry that we know today within financial services. And it's interesting when you start comparing what financial service has gone through to what health care seems to be going through, smarter people than us confirm. In fact, that's exactly where they think you could have just said almost everybody OK Instead of smarter people than us.
Speaker 2:in fact, that's exactly where they think you could have just said almost everybody okay instead of smarter people than us. Well, well, well. The other thing I want to ask what the heck does this have to do with the bowl of check mix? But you're, but you are on to something, so let's get back to paying a cover charge for no, okay, go ahead you're right, there is a lag on what financial services went through and what healthcare is going through.
Speaker 2:So, for example, back in the 80s and 90s if you wanted to buy a hundred shares of General Electric in other words getting access to the stock market let's say you went to Merrill Lynch and let's make them analogous to Blue Cross or UnitedHealth or Aetna and we're talking about the health care market to physicians and facilities. Let's say you went to Merrill Lynch. You'd go and say, well sure, you can have 100 shares of General Electric and the commission on that will be $300. And to get information about the markets or on your General Electric, you went through Merrill Lynch. Let's say so. They had control, much like Investee and Pravda did, of information in the Soviet Union back in the 50s. They pretty much controlled access to information market data that now we can get for free.
Speaker 1:So stop right there. So something comes to my mind, because we're really here about healthcare and drawing comparisons. Right, so you're dealing in the 80s with having to go through big investment companies that control the information. How does that relate to the healthcare industry today?
Speaker 2:Well, it's the same thing In effect. You have the big houses, you had Blue Cross, you've got United, cigna, aetna, and for you to access providers you go through their network. Then those providers are paid by, let's say, blue Cross, a negotiated price that they settle on to provide those services. So you go to Merrill Lynch. They have stated commissions $300 for 100 shares of General Electric I'm making all of that up. You go to access healthcare through Blue Cross. They've negotiated their prices with those providers at some discount to what might be their stated price or their retail price. Their charge master, so to speak, is what it's called.
Speaker 1:So the term that you're talking, charge master, is the term in healthcare that equates to retail price. Yeah, Okay.
Speaker 2:So these are phonied up numbers to begin with, so that the insurance carrier can say well, we've got 40%, 50%, 60% discounts on these items through our network. So when you go to a provider through our network, you're getting negotiated discounts on the services provided. Problem is that's not really compared to anything. It's just a negotiated discount off of an arbitrary number off of which they set the discounts. Does that make sense to you? He thought he was in control. How wrong he was.
Speaker 1:Are you fucking kidding me? So I have my health insurance policy whether it's through my employer or through the open exchanges, whatever Right and I have to go see my doctor. When I go and see my doctor, my doctor is the insurance company, or is that the provider?
Speaker 2:He's the provider. Okay, yeah.
Speaker 1:That's in your network. Right.
Speaker 2:So he's offering his services to you at a discount because he's in that network.
Speaker 1:So I have my insurance policy, the insurance company has this network of care providers professionals, doctors, nurses, technicians, whatever and when I need to go see my doctor. And since I have my insurance, that shouldn't cost me anything, right.
Speaker 2:Well, sometimes it doesn't, it depends on the plan document. But for the most part you have a copay. So when you go see your physician it might be $50. You go see a specialist, it might be $80.
Speaker 1:But I'm paying my premiums, so why should I have to pay? When I go see the doctor Seems like I'm already paying a lot.
Speaker 2:Well, you are and it does. It seems like the premium that you're paying is onerous to begin with, and then you're paying a co-pay. So the provider is let's say, just for a routine physical it might be two or $300, that is billed to the insurance company. The insurance company pays that, but you're paying $50, what 20% of that with your co-pay? So you say, well, wait a minute. I'm paying a premium also and let's say it's $500. That's $6,000 a year that I'm paying just for the privilege of now going to see my doctor and paying $50. Someone just made me very angry.
Speaker 1:So I have my insurance policy. I get sick. There's a network of care professionals that I have access to, and then when I go and see the doctor, I'm probably going to have an out-of-pocket expense. It seems like every time I know when I go to the doc, there's always additional tests that need to be run. Is that included? Am I going to have to pay more for those services? How does that work?
Speaker 2:Typically, so let's just use a Blue Cross Blue Shield Silver Advantage and the one that I'm referencing is Texas and it was bought in the marketplace for an individual and in that case you would pay 40% of whatever the imaging is or whatever the blood work costs are. Okay, so if Blue Cross Blue Shield said a brain MRI is $1,300 cash price, then you'd pay. If you're in your deductible, you're going to pay all of that. Say it again If you're in your deductible, you're going to pay all of that, but if you're beyond that, you'd be paying a co-insurance. You'd be paying 40% of whatever that price is.
Speaker 1:When you're explaining that to me, here's what goes through my mind, just to get it simply put in my mind. So I have an additional test and you said I might pay 40% of that cost. You could.
Speaker 2:Now, if you're in your deductible, you're paying all of that, so we're beyond that.
Speaker 1:That's only after the deductible, yeah, so you've already paid $5,000.
Speaker 2:You've been chewing through, let's say, a $6,000 deductible.
Speaker 1:Now, before that, you're paying, let's say, 40 percent of whatever the cost is. So wait, wait, wait. So let me. Let me get this right. I'm going to use 500 bucks a month in the insurance premium cost, just paying that. Whether I use it or not, that's going out the house. Then when I do go and see my doc, I'm probably going to pay 50 on a, a copay. Yes, okay, do right at the time of service. And the good news is, if the doctor's visit costs $300, I paid $50, and my insurance this month that I just spent $500 on is going to cover that additional $250. Right, they?
Speaker 2:pay the physician Right.
Speaker 1:Okay, Now, normally when I go to the doctors there are additional tests, so in that case that's a deductible question, meaning that if I haven't exceeded the dollar amount that is my deductible, all of that is coming out of my pocket. Yes, Wow. And the good news is, after I pay for that, 100% of that that gets added to the amount of deductible that's been used, I presume. But the good news is next month I got a $500 bill. I got to pay for insurance.
Speaker 2:Shut up and take my money.
Speaker 1:But at least I'm accumulating the amount of money I'm spending completely out of pocket to maybe at some point exceed $6,000. I think you used.
Speaker 2:So let's use a case of where this can be onerous while you're still in the deductible phase. An individual, his wife, needed three MRIs to rule out MS multiple sclerosis One of the brain, one of the spine and one of the lumbar vertebrae. Also Three of them Cash price. These were the doctor's orders.
Speaker 1:Yes, they were doctor's orders.
Speaker 2:Yep $3,400. Holy bucket, Yep $3,400.
Speaker 1:And that's with the insurance.
Speaker 2:Yeah, so that's the in-network, yes, the in-network price, discounted price, so to speak, for those three items $3,400.
Speaker 1:So next month, after I spend $3,400 on the test that my doctor's saying you really need to do these so I can tell you what our next steps are, if any. And then next month I got another $500 bill coming Sure.
Speaker 2:That's fantastic, and he still might not meet his deductible. What's his deductible? Do you recall $7,000.
Speaker 1:Oh. So if this was the first thing he spent for his care this year, in 2024, and he paid for it through his network and the negotiated discounted price, that's $3,400 of $7,000, leaving what $3,600 left for him to spend before he gets any more insurance support.
Speaker 2:Okay, Is there anything you'd like to talk to me about that we haven't discussed yet. Let's get back to the network for a moment. So I'm in the Blue Cross Network or I'm in the Aetna Network.
Speaker 2:The insurance network generally speaking. What does that mean? Does it really mean getting back to the Chex Mix Love this I got to get back to the Chex Mix bowl again. Does that mean that Blue Cross went and took all of the wheat Chex Mix? No, it doesn't. It's not like they're picking the best, so they didn't pick out the good stuff out of the Chex Mix bowl.
Speaker 1:They're just picking docs, or are they even picking docs? Well, guess what it's?
Speaker 2:usually the same guy. Look, if 99% of doctors are in networks and multiple networks, is there any?
Speaker 1:exclusivity. Yeah, there's no discernment? There, right?
Speaker 2:No, you're not getting the better doctors. Discernment there right there's no apparent like no, you're not getting the better doctors here's a question.
Speaker 1:Maybe at a facility level you may, but certainly not from a network level. So let's stay on that point. Is there a fiduciary? So that's a buzzword right In financial services. I'm a fiduciary, you should trust me, I'm a fiduciary, we are a fiduciary and we always make light of that. So the question is does the health insurance company have a fiduciary responsibility to me that within their network, these doctors are top notch, don't make mistakes, right? Blah, blah, blah, blah, blah?
Speaker 2:It's almost like in the financial services industry where you know you check their background and see if there's any nicks on it. Same thing with the doctors, where you check their background and see if there's any nicks on it. Same thing with the doctors If they've been suspended or if there's been a complaint and how was that resolved, then they'll bring you into the network. So you don't have to be pristine with a clean record all the way back. It's just there's not a bloody hatchet involved with this. So whether you're in Blue Cross or UnitedHealthcare, really what the differentiator is is not the quality of the provider, it's plan options, different ways to put together a plan and what the features are.
Speaker 1:Interesting to sort of shop and pick and choose what I want? Or is someone just saying this is the plan we've developed for you? Pick A or B? Do? They all generally then cover similar services, but the cost is just an access. Maybe is just different More often. So the fancy terms are just more direct access or more access without permission Right or a different copay level oh, fair enough.
Speaker 2:Or a different deductible. So you've got a higher premium, okay, or a lower premium, and you'll take a higher deductible, okay, and cross your fingers.
Speaker 1:We are aware that some listeners may not agree with our earlier interruption of what is known as the Chex Mix Paradox. The following is provided to defend our editing of this spiral into bullshit and banter. You're welcome.
Speaker 2:And you know what. Here's where we are today. One might say that if I'm picking out all the wheat, checks out of there that I really like the wheat. Another one might say what do you got against those? Why are you committing in that bowl a form of genocide and eating all of those? What's the?
Speaker 1:issue. There's a third option that your actions aren't because you like them, or that you're trying to wipe them off the face of the bowl, that you just want to consume them, to deny other parties within this group all feasting on Chex Mix to have maybe what they perceive their favorite. I mean, that's a third potential scenario here. Incorrect answer.
Speaker 2:Okay, we're back. You know it's amazing what 15 minutes on our little mats will do right.
Speaker 1:So we're going to rerun this real quick. I got insurance. I got a network through the insurance company that I have my insurance with. I got $500 a month costs when I go and see a doc in our example $300 doctor bill but I pay $50 in a co-pay when I get there and $250 is paid by the insurance company. So thus far this month'm out 550 bucks and I've seen my doctor who's now prescribed me, in our story, three mris in this case. Obviously I'm going to go. Typically, do I tend to I mean, as a consumer, do I tend to shop that or don't I just go where my doctor says what?
Speaker 2:happens. It's not like shopping on Amazon for items you're familiar with or on Priceline. It isn't People don't know. People don't really know where to shop. They don't even know what the test is. Fair enough. So often if the doctor says, go here or you're with a large healthcare system, you just get it done there. But if you're in your deductible that can be awfully expensive instead of going out into the marketplace and seeing if better pricing exists.
Speaker 1:So in our case, in our example, those three MRIs were priced at about $3,400.
Speaker 2:That was the negotiated discount price for the privilege of being with Blue Cross discount price for the privilege of being with Blue Cross.
Speaker 1:So my $550 at this point this month is paying for the discounted price of $3,400. So what would happen if I didn't have insurance? What would happen if I saw a doc? I ended up paying $300 for that doctor's visit in this example, because I don't have insurance. But something's been bothering me and I get hey, you need these three tests. Now I got 3,400 that I'm looking at and I don't even have the pleasure of having that count toward a deductible. So I'm out of pocket in this example. 3,700 bucks this month, maybe. What do you mean? Maybe I mean that's the discounted price in that insurance network. That's why it's all about. Why, right?
Speaker 2:but if you don't have insurance, you might be able to get it a whole lot less expensively.
Speaker 1:Kelly shut the front door but having insurance gives me access to the insurance company's network of professionals at discounted prices.
Speaker 2:And you mean which may not be the best in the Chex Mix Bowl.
Speaker 1:Oh, that's why we're talking Chex. I didn't understand. There was a connection here. So if we both like the wheat Chex, it doesn't mean that the doctors and the service providers in the network are all wheat Chex.
Speaker 2:They're not all in the in this case. Whatever the carrier, they might not be in that the wafers?
Speaker 1:I'm not taking those, I mean, who the heck decided to put those in? So the wafers could be other professionals in the network, all right, so we got 3400 dollars in expenses. With an mri, I may be able to access it for a lower price how do I do that?
Speaker 2:a couple of different ways. Depending on your income, you may qualify for discounted or charitable care for those same MRI at a nonprofit hospital serving your community. Okay, so if your income is, let's say, below Dude, I do not like the sound of that.
Speaker 1:It feels like dark clouds over some institution. It's charitable care. It sounds like Lurch from the Adam family is going to be in the emergency ward. That doesn't sound positive. Are these good facilities? Are these?
Speaker 2:Well, they are typically the top tier providers in any given community. Are your nonprofit hospitals? No kidding, yep.
Speaker 1:That's not the image. That's about 4,000 of them.
Speaker 2:I have a weird image. So you think of the big anchor hospitals in any given community. They're the nonprofit hospitals.
Speaker 1:So those are going to be typically the hospitals that someone that needs financial assistance for their health care bills or services that they need to consume. Those hospitals probably have some kind of a program With the nonprofit hospitals.
Speaker 2:It's all through. I think it's Section 501R of the IRS code. It says look for you to maintain your tax-exempt status, you have to, among other things, provide charitable or discounted care to lower to mid-income residents in the communities in which you serve. Is that new? No, it's been around since 2010. So, for example, I could be a household of four making almost $60,000, and I'm below, without getting technical about this 200% of the federal poverty level. I could get free care, no kidding, it's paid for, it's fully subsidized by that hospital. I could be making $100,000.
Speaker 1:Do they make this hard though, though, to do it, because I mean, it sounds like, yeah, they do. There's a well of money to support so I can be healthy. I can take care of it.
Speaker 2:The law- states that you have to make salient, if not even promulgate, that financial assistance is available to them if they meet certain financial criteria. So they have to do that. Then you have a form that you need to fill out and if you think that that form's easy to fill out well, it's gotten a lot easier, but it used to be just onerous to fill out and then they will make a determination within 30 days whether you qualify for charitable care, meaning free care or some discount off the bill.
Speaker 1:My view of the consumer, as you know, is not necessarily a super favorable one. In certain instances, and whenever we have a legal document that needs to be filled out, my view of the consumer is. I don't want to go through that and I feel sorry for you and your lack of soul. I'm going to divulge all my personal information. Where's that going? I got to wonder how often are these programs used by individual patients of the health care system?
Speaker 2:Not very much. I don't have the statistics, but I know that it's a very—. Just give a number and they won't know.
Speaker 2:Oh yeah, that's right incorrect answer so you know like well you know what I do. Remember one from gala that was during covid and it was 68 percent of people did not fill out applications for relief when they knew it was a high probability of them receiving some type of subsidy because the form was too onerous. They just didn't want to go through it. Then there's other factors that come in, like shame. They don't want to fill it out. So there's other factors that come in like shame.
Speaker 1:They don't want to fill it out, so there's a lot of factors that go into it.
Speaker 2:How long does it take to fill the form out? Well, it probably doesn't take more than a couple of hours to gather, maybe three hours to gather all the information, make sure it's accurate and then complete the form and then submit it, and then often there's requests for additional information. So people often just don't want to get into that, and they know that the hospitals know that you suck.
Speaker 1:In terms of this MRI stuff for $3,400 exposure out of pocket. Give me some examples of what that might cost a person. If they didn't have insurance, didn't have the access to that discounted great pricing, what would they do? They just go down the block and say, hey, my doc gave me this order. It's not the right company, but I see you guys do imaging, knock on the door and ask them to do it. I mean, is that fair?
Speaker 2:No, typically you'd have to shop for providers that offer cash pay lower cost cash pay. Why it makes sense for a lot of them? Because they're able to circumvent all of the rigmarole of going through processing an insurance claim.
Speaker 1:So is cash paid different? I mean, I'm confused here.
Speaker 2:It's totally circumvents insurance. Remember our example was they weren't insured. But it can apply to someone who has insurance. It's totally circumvents insurance.
Speaker 1:Okay, so before we go back to the insurance person, the uninsured person shops around, potentially just finds out hey, do you accept? Would you say cash pay or can I just pay pricing? Can I just pay cash for a service? I need these MRIs done for me.
Speaker 2:Yeah, we're separating this away from insurance and we're talking about a whole different market. I have no insurance in this example, it's a cash pay market rather than the market of networks.
Speaker 1:Yes. So in the first example, all the way up into this point, 500 premium, 50 bucks copay on my doctor's visit, $3,400 for three MRIs. In this example I don't have a premium, I don't have insurance. I did my doctor's visit but it was 300 bucks, so I have to pay.
Speaker 2:Well, it might not be $300 because there are physicians Okay, now my head's starting to rain. Yeah, there's physicians that say you know what? I get paid $300 from the insurance company but I'm paying $150,000 for medical assistance and secretaries to process all of these claims. I've got to wait sometimes eight weeks to get paid all of these claims. I've got to wait sometimes eight weeks to get paid. I can make as much money at a 50% discount than as I can getting paid $300 from the insurance carrier.
Speaker 1:So instead of $300 now I had my doctor's visit. I paid $150 out of pocket versus $50. And then I take my MRI and I do what you're suggesting. Hey, call around a couple of places. I do what you're suggesting. Hey, call around a couple of places, see if they have a cash pay option and then schedule my visit with that facility and go get my test done. What's that going to run me? Same $3,400, right.
Speaker 2:It might run between $900 and $1,100 for all three. All in cost, mm-hmm. How is that possible? Same type of facility that takes the Blue Cross or the Aetna or the United. Why? Because they're circumventing all of the cost associated with that.
Speaker 1:The thing that comes to my mind right now is it sounds too good to be true. It's a Ponzi scheme. There's swamp water in Florida. I want to sell you All of those things come to mind. How could it be? Possibly less than a third the cost? Now, are these same facilities, same train?
Speaker 2:no, you might have to walk through a um kentucky fried chicken or something into the back area back area, yeah, or something yeah, but these are quality, nationally recognized fast food. You know it's not so. It's a partnership.
Speaker 1:Yeah, so it's very much like that. I like that. So while you're waiting, you can have a wing and a biscuit.
Speaker 2:The new thing of waiting with the wings instead of in the wings. Indeed, I like how you did that, yeah, so no, really, they are the same facilities, same machines, same technicians with the same education, and skill set, so there's no question of quality.
Speaker 2:It's just that you're not going through. You're not going through your insurance and all the onerous costs and rigmarole associated with being in your network for that negotiated discount. That really isn't very much of a discount. So in our first example, compared in the cash price market, so in our first example I get all of this done.
Speaker 1:I'm 550 out of pocket and then,400 out of pocket, so I'm at 3950. Is that right? Yeah, 3950. I don't know, I don't listen that closely. Call it, I thought you would. I can't believe that. So call it four grand, just to make it easy on my brain. So four grand out of pocket in network coverage policy, all that, and in this case, no insurance, 150 for the doctor's visit. And call it a thousand out of pocket. Well, let's make it 1200 all in. So 1200 bucks all in versus four grand. And I had insurance, yes, in the first example. And next month, guess what's coming down the pipe, straight ball right down the plate, 500 bucks. Yeah, here we go.
Speaker 1:Okay, so we've been talking a lot about this insurance versus now this idea that if I don't have insurance, I can still access healthcare services, and I either can do it through financial assistance programs at these nonprofit community facilities. They're grade A facilities, they're great service providers and highly trained individuals. There's no different. So I don't want to be the person that's demonizing health insurance either. There's a place for health insurance and if you can afford it, it's fantastic, because it does give you that peace of mind. That's a huge deal, but how do you deal with the fact that not everybody can afford it and not everybody has access to it? You deal with the fact that not everybody can afford it and not everybody has access to it. And even on the exchange with credits, we could still be looking at $500, $1,400 monthly premiums for just the health insurance and thus the access to what we found out not so discounted pricing for MRIs in our examples.
Speaker 2:Health insurance is for catastrophe. It is not for controlling out-of-pocket costs for routine outpatient care the 98% of stuff, kelly, that folks of working age need lab work and imaging screenings, minor outpatient surgery. It's not for controlling those costs, it's for catastrophe.
Speaker 1:Yeah, I think that there's so much emotion. As I said earlier, it's when I might not be able to or I just outright can't afford it. But maybe I just need to learn a little bit more about how to access healthcare at substantially lower pricing than even those folks that walk in with health insurance card in hand. The question then always becomes well, for those families that can't afford it. They don't have access to the Medicaid services in their state. They make too much money. The exchanges are out there and they certainly you know, if you can afford it again should shop it.
Speaker 2:And there's great subsidy. The problem with marketplace insurance and this is anecdotal to some extent is some providers don't take it. So you can have the plan but I don't know how many doctors will take it Aw boo. There are other ways to access care discounts on care and a safety net below you, and those can be healthcare ministries. They don't call themselves insurance, they can't. But you know share programs. Some employers will offer what are called MEC plans. Mec for minimum essential coverage that are often much less expensive than major medical, which is what typically you get through an employer-sponsored plan through one of the large carriers that we've mentioned is major medical, so it handles the preventive, it handles vaccination, wellness screenings, typically at no cost, but it does provide that safety net for you to incur major illness or a major accident or something that suddenly you're looking at. Medical bills in the tens, if not hundreds, of thousands.
Speaker 1:So, at no cost, you have all these screenings and access to these services, but I'm spending six grand a year. That's the thing that I don't. It's the checks mix at the bar.
Speaker 2:Well, that's the network. That's the network, but the no, but it's also the checks mix. Because you're not paying for that? It's at no cost? Yeah, you're paying for it. Absolutely you're paying for it. Yeah, absolutely You're paying for it Instead of incident.
Speaker 1:You're paying membership pricing, as we've talked. I always view it as a cover charge to get in and if you can afford the cover charge, get into the club and enjoy yourself. And it's those that can't or don't have access and again make a little bit too much money to qualify for other insurance coverages. If I'm out there as an individual, that middle of the road group, is there health insurance out there that can cover my backside, like I did have that accident, and there's coverage where, if you're hospitalized or if you have this type of illness or that, that will help cover some of that medical expense.
Speaker 2:There are catastrophic plans. There's indemnity plans that might pay several thousand dollars for a hospital stay. Without getting too in-depth with us, just keep it conceptual. And I believe if you're 30 or younger, all you need to buy on the marketplace is catastrophic care. Something really bad happens to you. You're taken care of. Why? Because they know it's a low probability for needing anything else. It's like a term policy in life For hospital. They might pay $1,000 or $2,000 a day for a set period of time. Cancer policies are the same Other types of policies that you can cobble together here that might have you adequately covered for most things. Now by covered I don't mean fully covered, I mean some portion of it might be covered With these indemnity plans. It's a defined benefit. So if you're in the hospital and your coverage says it'll pay $1,000 or $2,000 a day and if it's $2,500, you pay the $500. But if it's $1,800, it's paid for by your indemnity plan.
Speaker 1:I see so indemnity kicks in and they can either pay the hospital, they'll pay you and you pay the hospital. Indemnity kicks in right away with some kind of an amount and there's a cap to the amount. Yeah, that's why it's called a defined benefit, just like a pension. Yes, I get that. So if I'm paying 500 bucks a month on a premium Blue Cross, blue Shield, vantage Silver in the state of Texas and the one individual was like $500 a month in premiums, the family of four was like $1,400 in premiums. So $500 to $1,400 is my bandwidth.
Speaker 1:Real quick, by comparing that with a tricked out do-it-yourself healthcare approach intending to use cash pay providers, intending to maybe even look at financial assistance in the local big nonprofit community hospitals that are out there that you live, by putting together either an indemnity and or catastrophic coverage based on my family history, what's all that going to run me? And the second, like with first, we got $500 to $1,400, plus your co -pays, co-insurance and all that stuff. So let's not get into that part of it. Just at 500 to 1400 a month.
Speaker 1:If it were an individual, it would be a third of that amount, yeah, a third of that 150, 200, somewhere there.
Speaker 2:And typically with a family. It might be still about that one third.
Speaker 1:So wow, so let me just do that, because I this stuff. That's $1,000 a month not being spent on healthcare premium, right? Most families out there need an emergency fund. As an example, maybe they need life insurance, maybe they need other things done, I don't know, I don't know. But that $1,000, if it went into a savings account, let's say it was earmarked to create an emergency fund. Right now rates are at 5%, call it. That family would have $24,000 accumulated in an emergency fund. For what? Come May, within 22 months, if they save that additional $1,000 not being spent on the premium into a high-yield FDIC insured savings account, $24,000.
Speaker 2:So that $24,000, not a perfect analogy, but let's think about it this way it does come down to a tolerance for risk. So in the marketplace, you can get an exceptional rate of return 10, 11, 12% perhaps by taking on market risk yeah, as opposed to the safety of a FDIC insured account. To save the money the $24,000, you're taking on another risk and that is what are the probabilities of something happening to you where you would want full insurance coverage or would need full insurance coverage? So there's a risk. So all of this does come down to a risk return trade-off. One is volatility, the other is something happens to you. So while we can't advise on that, that does come down to a personal decision.
Speaker 1:It's sort of like shaping the amount of risk you're taking on. One option is fully insured Employer offers it, you can afford it. Another option is you can't afford it, whether it's offered or not, and you can't afford on the exchange. Family of $4,400 a month Just can't afford it. In that case that family is out there looking for an answer and they can start shaping something that might be a third the cost of Still not dirt cheap $150, $400 a month.
Speaker 1:But boy, you shape exactly how much financial exposure you're going to take on, whether it's a hospitalization or some disease or what have you. And to me, when I'm saving a thousand on the probability that that stuff isn't going to happen, versus just blindly saying I just got to spend the money. That's at sort of the crossroads of people's decisions today, because if you can't afford to do all the things you want, you have to start examining where you're spending your money and, to your point, how much risk you're willing to take on or take back from having a full health insurance policy on the market. Pretty interesting stuff, man, good stuff. We'll see you next time.