You Tube Medical Debt Episode 1 What is Medical Debt

PRESENTER NOTES

Medical Debt EPOSIDE 1

Hello Healthcare Consumers and welcome to The Gary and Jay’s Healthcare Insider, the program that tries to help “Make healthcare easier to understand and navigate.”

Today’s program:  What is Medical Debt; Since this topic is complex, this will be the First of Several Programs

I’m Gary and I’m Jay and we will be hosting today’s program.

  • We are not Clinical people.
  • We are experienced in the Business of Healthcare with over 50 years of combined experience.
  • We bring an Insider’s view of how healthcare works.
  • Our goal is to share our knowledge with consumers.

Gary Prala:  Career in spans managing hospital and physician revenue cycle operations that include

Pt Admission, Precertification, Ins verification, billing and medical collections

 

Jay Herron:  Chief Financial Officer for several large healthcare systems

 

Medical Debt

The topic today is medical debt. This topic is controversial, complex and challenging for anyone exposed to the medical system. KFF Health News conducted a nationwide survey of people receiving either medical or dental bills. For our purposes we’re defining medical debt as

A financial obligation or bill incurred receiving some form of medical services or products. The form might be a lab tests, Dr visits, ER care, hospitals, payment plan, credit card, bank loan, financing company, or borrowing from friends or relatives.

Another important question is “do you have medical debt?”

If you have medical debt, you’re not alone. Current estimates place the amount of medical debt around $220 billion. This is largely an estimate because of the numerous unofficial forms of medical debt. This number pales in comparison to the almost $2 trillion in student loan debt the government is in process of forgiving. Largely because medical debt hasn’t been accumulating for as long. Per a recent KFF study:

Four out of ten adults have a medical debt: 41%

About 50% of adults with medical debt owe less than $2500

$88 Billion reflected in consumers credit bureau reports

Medical debt is not evenly distributed: Uninsured, Low Income, Black/Hispanic Adults

Unexpected:  One time or short term medical expense

Typical consumer can not pay a $500 medical expense

Most consumers need two to three years to pay off their medical expenses

One in seven adults reported they were denied care due to a medical expense

SIX IN TEN ADULTS CUT BACK SPENDING OR USED ALL SAVING

 

Explaining the rise in medical debt is a long and complex story. Ironically, much of the current medical debt has occurred after Congress passed legislation referred to as Obamacare whose purpose was to reduce the number of uninsured people.

Possible causes of medical debt for people with health insurance are what are referred to as risk sharing tools. Risk sharing is a concept payors have invented to attempt to hold down the rate of health insurance premium increases. Common forms of these risk sharing techniques are high deductible health plans, deductibles, coinsurance or denials or managed care.

High deductible health plan

  1. DEFINTION
  2. AVAILABILTY
  3. ANNUAL DEDUCTIBLE AMOUNT
  4. PREVENTIVE CARE
  5. HDHP TAKEAWAYS
  6. HSA’S HEALTH SPENDING ACCOUNTS

 

Gary can you provide examples for our audience what exactly deductibles, coinsurance and Denials are?

  1. CO PAYS
  2. COINSURANCE
  3. DEDUCTIBLES
  4. DENIALS
  5. PRE AUTHS

As we previously explained, the topic of medical debt is complex. Therefore, we have decided to break the topic into several pieces.

The upcoming episodes will be included:

  1. Solutions-
  2. Acquiring insurance
  3. Selecting Traditional Medicare or Medicare Advantage
  4. Medicare Gap coverage
  5. Applying for Medicaid
  6. Applying for charity care
  7. Negotiating discounts and payment plans
  8. Increasing Medicare deductibles
  9. HSA’S DEFINITION, USE

Healthcare consumers

A byproduct of the aforementioned causes of medical debt is a need for patients (healthcare consumers) to be more engaged and knowledgeable about how, when or where healthcare services are received. Examples of tools providers of healthcare services are utilizing to collect accounts are credit bureaus, collection agencies, litigation, and revenue cycle companies.

In an attempt to help consumers cope with many of the new “techniques” being used by medical care providers and become more aware of their financial accountability, Congress enacted the “Healthcare PRICE Transparency Act” for hospitals. How consumers can utilize this legislation requires education in the details of the legislation and commonly used healthcare terminology within healthcare organizations. Details found in the legislation include the following:

  1. Chargemaster-a listing of each “Gross Charge” for every item or service provided by the hospital
  2. Listing of CPT codes, listing of DRG codes and HCPCS codes
  3. 300 “Shoppable Services”
  4. Discounted cash price
  5. Maximum negotiated charge
  6. Minimum negotiated charge

Understanding the details of the aforementioned Act is a critical component of a healthcare consumers’ ability to navigate healthcare medical debt, billing and collection processes.         CHECK OUT OUR WEB SITE

To conclude, Medical Debt is a very complex issue.  Healthcare consumers need to be cautious and well informed. Our goal is to provide the consumers with information and solutions.  To that end, we are going to have several more programs to further help consumers navigate this healthcare maze.

 

OUR NEXT PROGRAM WILL BE:  MEDICAL DEBT SOLUTIONS

 

 

HCNC is your healthcare partner that offers healthcare consumers information to navigate the healthcare ma HCNC is your healthcare partner that offers healthcare consumers information to navigate the healthcare maze.

Find us at : www.healthcareconsumernavigatorcenter.com

THANK YOU

 

THE FOLLOWING IS MORE DETAIL INFORMATION TO HELP THE CONSUMER NAVIGATE MEDICAL DEBT.

 

HIGH DEDUCTIBLE HEALTH PLANS

high-deductible health plan (HDHP) keeps your monthly premium payments low while typically providing 100% coverage for preventive services in your plan’s network before you meet your deductible. Sounds good, right? But it’s not quite that simple. So, understanding how these health insurance plans work is important.

What is a high-deductible health plan (HDHP)?

An HDHP is a health insurance plan with a high deductible. A health plan deductible is the amount you pay out of pocket for medical care before your insurance covers any costs. A premium is what you pay every month for your plan.

An HDHP is a plan with a deductible that meets or exceeds a minimum amount set by the federal government.

What is considered a high-deductible health plan?

To qualify as an HDHP in 2025, an individual plan must have a deductible of at least $1,650 for individual coverage and $3,300 for family coverage. Your annual out-of-pocket expenses (which include coinsurancecopays, and deductibles) for an HDHP can’t be more than $8,300 for an individual or $16,600 for a family in 2025. If you reach either of those limits, your plan will pick up 100% of further costs for the calendar year. But the limit doesn’t apply for services outside your network.

The table below shows HDHP minimum deductibles and maximum out-of-pocket expenses for 2024 and 2025.

High-deductible health plan (HDHP) requirements   2025 2024
Minimum deductible for an individual $1,650 $1,600
Minimum deductible for a family $3,300 $3,200
Out-of-pocket expenses maximum for an individual $8,300 $8,050
Out-of-pocket expenses maximum for a family $16,600 $16,100

Preventive health services

Most health plans must cover a set of preventive services — like shots and screening tests — at no cost to you. This includes plans available through the Health Insurance Marketplace®.

Notice:

IMPORTANT

These services are free only when delivered by a doctor or other provider in your plan’s network.

Preventive services for all adults, women, and children

There are 3 sets of free preventive services. Select the links below to see a list of covered services for each group:

The Link Below will go it more detail:

Preventive health services | HealthCare.gov

 

 

The Take Aways

In some cases, HDHPs can help you save money by allowing you to pay lower premiums and giving you a tax break through an HSA. Your employer may contribute to your HSA, too. Plus, you may save money if the plan covers all of your routine care.

But HDHPs aren’t always the most affordable option. If you need ongoing healthcare, or if something unexpected happens, you may wind up spending more out of pocket with an HDHP. Your best bet is to crunch the numbers based on your individual financial and health status to see which option may be best for you.

What is a copay for health insurance?

copay (or copayment) is a set fee that you pay for a healthcare service under certain insurance plans. For example, your plan may have you pay a $20 copay for a basic doctor’s visit. Simple enough, right?

It does get a little more nuanced. To understand copays, you need to understand deductibles. A deductible is the amount of money you pay for healthcare services before your insurance kicks in. Whether or not you pay a copay or the full price of the service may depend on whether you have met your deductible.

How it works

Let’s say you need an MRI. At full price, these could cost hundreds or thousands of dollars. If you haven’t met your deductible yet, you’ll likely need to pay full price. If you have met your deductible, you’ll likely only need to pay a copay, which might be as low as $20. Finally, if your deductible is lower than the price of the MRI, you’ll pay the deductible (and likely a copay), as opposed to the full price.

One exception: For some healthcare services, you’ll only ever need to pay a copay—whether you’ve met your deductible or not. For example, many insurance plans offer certain services (especially preventative services) for a small copay. This includes doctor visits, annual checkups, cancer screenings, and dental cleanings.

Why? This is usually to make sure you can afford preventative services and basic care. These services may help prevent major health problems or catch them early. Health problems often get harder (and more expensive) to treat as they progress, so catching issues early is very valuable. It can help both you and the insurance company save money.

 

How does coinsurance work?

Coinsurance is a way for your insurer to share medical costs with you after you’ve met your deductible. It requires you to pay a portion of your medical costs (such as charges for tests and office visit fees), while your insurer pays the rest.

Your portion is expressed as a percentage. For example, if you have 20% coinsurance (a typical share for employer-sponsored health insurance), you pay 20% of medical costs, and your provider pays the other 80%. Higher coinsurance, such as 60% or 70%, would have you paying 60% or 70% of the bill.

How does coinsurance relate to your deductible?

Your health plan will likely have both a deductible and coinsurance. Your annual deductible is an out-of-pocket dollar amount specified in your policy documents. You have to pay that amount in full before your insurer begins covering any costs. Once you’ve paid all of that deductible amount, your coinsurance will kick in. Your insurer will begin paying a percentage of your medical costs as outlined in your plan, until the end of the year. Your deductible resets each year.

It is possible to get zero-deductible health insurance — in which case, your coinsurance would apply immediately. However, those plans will often have more expensive premiums.

If you have a high-deductible healthcare plan, you’ll generally pay lower premiums. Coinsurance doesn’t apply until you meet the deductible. It’s not uncommon for high-deductible health plans to have low coinsurance rates (even as low as 0%).

The Take Aways

Understanding your health plan’s coinsurance can help you estimate your medical costs. Low coinsurance will benefit people needing ongoing care; even if premiums are higher, overall medical bills will be smaller. High coinsurance typically goes with lower premiums, so people who need only routine care will pay less each month and may not face costly bills at all. If they do need expensive care, of course, they owe a larger share of those bills. Once you hit your annual out-of-pocket maximum, you no longer pay coinsurance.

 

 

What is a health insurance deductible?

deductible is the amount you pay for healthcare services before your insurance plan covers the balance. When choosing an insurance plan, you will often see a range of deductibles. One plan might offer a $500 deductible, another a $1,000 deductible, and another a $2,000 deductible.

For example, if you have a $1,000 deductible, it means you’ll pay for the first $1,000 of covered care yourself—with some exceptions (more on this later). After you have paid at least $1,000 in one benefit year, your insurance will start covering those costs. You’ll only need to pay your copay or coinsurance or if you go over your max reimbursement for any services after that. (Copays and coinsurances are usually either a set fee or a percentage of the total cost of the service.)

Here’s the exception: Whether you have reached your deductible or not, it’s possible that your insurance will often fully cover specific items. You would need to call to clarify what is covered or look at your eligibility of benefits table. These payments may not count toward your deductible. Plans with a higher deductible are often less expensive in other areas (copays, prescription costs, etc.).

Why do insurance companies deny healthcare claims?

Insurance companies deny healthcare claims for various reasons, including:

  • Data entry errors:If your name or policy number gets typed incorrectly, or if a field on an application form is left blank, it can lead to a denial.
  • Medical coding errors:If your healthcare professional submits an incorrect code for your diagnosis, the type of treatment you received, or the location where you received services, your claim will likely be denied.
  • Lack of prior authorization:In some cases, your health insurance provider may require a prior authorization or a referral before they will cover a service. However, getting prior authorization does not guarantee that your claim will be paid.
  • Non-covered treatment:Your health plan may not cover specific services, such as cosmetic procedures or experimental treatments.
  • Treatment not medically necessary:Your claim may be denied if your healthcare professional performs a treatment or service that does not meet your health plan’s criteria for medical necessity.
  • Exhausted benefits:If you reach the limit for a particular service or treatment (say, home visits by a nurse), your health plan likely won’t pay for additional services and may turn down your claim.
  • Duplicate claim:If your healthcare professional submits two or more claims for the same service that were completed on the same date, these claims might be seen as double billing and will be denied.
  • Coordination of benefits:If you’re covered by more than one health plan, claims may be denied until your insurers determine which plan should pay first.
  • Out-of-network professional:If you receive services from a healthcare professional who is outside your insurance network, your health plan may turn down your claim.
  • Missing documentation:If your healthcare professional does not provide enough documentation for the services you received, your claim may be denied.
  • Late filing:If you or your healthcare professional do not submit your insurance claim within the timeframe specified by your health plan, it may be denied.

 

Key takeaways:

  • A health insurance claim may be denied for many reasons, including medical coding errors or failure to meet your plan’s criteria for medical necessity.
  • Generally, you have up to 180 days to request an appeal if your health insurance claim is denied. Review your company’s appeal process and gather documents to support your claim.
  • You can request an external review by an independent third party if your appeal is turned down.

 

What is a prior authorization?

Prior authorization is an approval of coverage from your insurance company, not your doctor. It’s a restriction put in place to determine whether or not they will pay for certain medicines. It doesn’t affect cash payment for prescriptions. Plus it’s only required on those prescriptions when billed through insurance. So if you’re uninsured or if you decide to pay in cash, you won’t need to worry about getting prior authorization.

What types of prescriptions require prior authorizations?

Insurance companies will most likely require prior authorizations for the following drugs:

  • Brand-name drugs that have a generic available.
  • Drugs that are intended for certain age groups or conditions only.
  • Drugs used only for cosmetic reasons.
  • Drugs that are neither preventative nor used to treat non-life-threatening conditions.
  • Drugs (including those dosed at higher than standard doses) that may have adverse health effects, possibly dangerous interactions, and/or risks for abuse or misuse.
  • Drugs that are not covered by your insurance, but deemed medically necessaryby your healthcare provider.

In many cases, prior authorizations are intended to ensure drug use is appropriate and the most cost-effective therapy is being used. If you think your drug may require a prior authorization, call your insurer directly to confirm.

What is an HSA?

A health savings account (HSA) has potential financial benefits for now and later. Not only can you save pre-tax dollars in this account to pay for qualified medical expenses, but HSAs can also provide valuable retirement benefits.

Here’s how to take full advantage of HSAs.

An HSA is a tax-advantaged account that can be used to pay for qualified medical expenses, including copays, prescriptions, dental care, contacts and eyeglasses, bandages, X-rays, and a lot more. It’s “tax-advantaged” because your contributions reduce your taxable income, and the money isn’t taxed while it’s in the account—even if it earns interest or investment returns. Bonus: As long as you use your HSA funds for qualified medical expenses, you won’t owe taxes when you take money out of the account. These 3 reasons are why HSAs are considered “triple” tax advantaged.1 This means they provide more tax advantages than retirement accounts, such as 401(k)s or individual retirement accounts (IRAs).

How does an HSA work?

HSAs work together with an HSA-eligible health plan. If you’re enrolled in this type of health plan, you can make pre-tax contributions to an HSA, allowing you to pay for qualified medical expenses tax-free. This can help create a cash cushion to offset the higher deductibles that HSA-eligible health plans typically have.

If you don’t need the money in your HSA for immediate medical expenses, you can save and invest it until you do. This sets HSAs apart from another popular account, the health care flexible spending account (FSA). Unlike an HSA, money held in a health care FSA typically must be spent by the end of the plan year in which it’s contributed, can’t be invested, and can’t be carried with you when you leave an employer.

 

 

 

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