(The following is an excerpt from the book How to Avoid Being a Victim of the American Healthcare System by Dr. David Wilcox with minor changes to reflect the current state of affairs)
Since so many people in America depend on an employer for health care insurance, losing your job becomes very problematic. According to a federal law named Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) employees of companies who employ 20 people or greater have up to 60 days to extend their health care insurance coverage after a job termination. Be warned that you will have to pay all days in the coverage period. If you were laid off in May and elect to use your COBRA benefits in July you would need to pay the premiums from the date you were laid off in May until the date you decide to sign up for COBRA. A good reason to elect COBRA is if you have already paid your out-of-pocket expense for the year or your deductible you wouldn’t have to pay it twice as your COBRA insurance is simply a continuation of your current employer based plan. Some state laws cover people employed by companies with less than 20 people, but all of them are costly and require the employee to pay their usual premium as well as what the employer would pay, making them much too costly for people living from paycheck to paycheck. Still, if you did have a medical emergency within the first 60 days of losing your job, it would be worth enrolling in a COBRA plan.
This shift in lost benefits means greater use of benefits such as Medicaid. Enrollment for Medicaid has grown to 4.3 million people since February 2020 and could grow even more. Medicaid is one of the biggest safety net programs in the United States, providing health care insurance to some 66.8 million Americans, or 20 percent of the nation’s population. During COVID-19, the Medicaid rolls have grown even further, taxing the states to deal with the financial fallout with limited federal support.
If you have lost your employer based health care insurance, you have several options. The first option is if you have a spouse or partner who has health care insurance you could be added to their policy, as the loss of a job qualifies as a life-changing event. If you are under 26 years old you can be added to your parents’ insurance. These are the two easiest options you can exercise.
If these options are not viable alternatives for you, other options include COBRA which we mentioned previously, Medicaid (if you qualify), or buying insurance through an Affordable Care Act (ACA) insurance exchange. You can also buy a policy directly from an insurance provider but make sure it’s an ACA policy. As the recent pandemic has shown, going without insurance is not a good idea.
One of the first things that you should do if you lose your employer sponsored health care insurance benefits is check to see if you are eligible for Medicaid. It is a state and federally run program that provides health care insurance at little to no cost to its recipients. The recipients must meet a certain income threshold, and while many states have expanded Medicaid coverage, some states have not. Your eligibility to enroll will be dependent on which state you live in. Medicaid is your easiest and lowest cost alternative to obtaining health care insurance.
A low-cost option for covering your children is the Children’s Healthcare Insurance Program or CHIP. It has different requirements from state to state but is usually more generous in its income allowance. To be eligible for Medicaid you can make up to 138 percent of the federal poverty line in some states for 2020, which is $12,760 for an individual and $26,200 for a family of four. With CHIP in some states, you can make more than 400 percent of the federal poverty line and still be eligible. You will at least be able to get your children covered.
If Medicaid, CHIP, and COBRA don’t meet your needs, you may be eligible to buy an insurance plan through the Affordable Care Act marketplace. After losing a job, you will be eligible for a special enrollment of 60 days prior to your job loss or after your job loss to enroll. For most states, you can find the information at healthcare. gov, although a handful of states and Washington DC run their own exchanges and require you to buy your health care plan there. People who make up to 400 percent of the federal poverty level may qualify. People making middle class wages are eligible for subsidiaries. The ACA subsidiaries are effectively tax credits that they give to you in advance. Even if your income shifts and you obtain another job, you will just have to pay back anything you underestimated when filing your federal taxes without any tax penalty. With COBRA, Medicaid, or an ACA health care exchange plan you can cancel the insurance at any time if you obtain another job.
The last option is buying an insurance plan outright. This can be a little complicated because insurance brokers will offer you low cost plans that may have some stipulations regarding preexisting conditions—not covering what an ACA health care exchange plan would. In other words, if something looks too good to be true it usually is. As a consumer, you can ask the insurance agent if this is an Affordable Care Act approved marketplace insurance plan.
If your income drops to 400 percent of the federal poverty line, you will not be able to collect any subsidiaries if you have not purchased a plan through the ACA health care exchange. This is a factor you need to be aware of if you feel your financial situation is going to change.
Suppose you let your insurance lapse or didn’t make the decision to continue it within the allotted time frame. You do have some alternatives when it comes to handling medical bills— what the industry calls a private pay individual. You will have to pay your bills, but there are ways that you can go about doing that without affecting your credit scores.
The first thing you should do is look at your bill. I know this sounds like a no-brainer, but hospitals quite often make billing mistakes. If you were discharged in the morning, they may charge you a full day hospital rate. They possibly could charge you for medications that you’ve never taken or procedures that were never performed. It’s very important that you look at your bill and determine the validity of the charges that are on it.
Equally important, you should not ignore your bill. One way or the other, you will have to pay this money back. But if you choose to ignore it, your credit rating is going to take a hit as they will send your bill to a bill collector. This will cost you a lot of money if you ever anticipate taking out a loan for a car or a mortgage on a house. A bill collector gets paid a certain percentage on the amount they can collect from you. In my experience, most bill collectors are pretty ruthless in trying to extract money from you. At all costs, you want to avoid that headache. Get in front of this instead of letting the situation manage you and you’ll do yourself a huge favor.
You can contact the hospital and work out an interest free payment plan. Usually, information within your bill discusses that option, but it’s often in the fine print. Now when you do this a hospital is going to ask you for an amount that you probably cannot afford as a monthly payment. Do not be afraid to negotiate this amount. Talk to them about your extenuating circumstances. Ultimately you’re trying to reach a price that both you and the hospital find affordable. If you try to stretch yourself too thin and can’t make the payments, you’re right back in the same boat, so again explain your circumstances and try to find a figure that you both find acceptable.
The worst thing you can do is take out a loan or put the balance on a credit card, as you will pay a lot more interest if you use either of these options. Keep in mind that the hospital wants to settle this as quickly as possible, and they will probably suggest a loan or a credit card as a viable alternative. Again, you do not want to use this method to pay your medical bills so continue to negotiate between yourself and the hospital arriving at a figure that you can both live with.
If you’re fortunate enough to be able to pay the entire bill off in 30-90 days, you can ask for a prompt pay discount. Hospitals negotiate different figures for different insurance companies based on the procedures that you’re having done at their hospital. You can use the same negotiating technique when you’re acting as a private pay individual. Most often you will get hit with the full price of your hospital stay and any procedures because an insurance company covers multiple people, thus allowing them to negotiate the price down. Lucky for you, there are some online resources that list the fair price to pay for a medical procedure in your area. One of those tools is called the healthcare blue book. Here is the link: https:// www.healthcarebluebook.com/ui/consumerfront
The free version of this tool allows you to enter your zip code and shows you an acceptable payment for various procedures. This will give you a starting point in negotiating a prompt pay discount with the hospital. If you’re being billed toward the high end of a procedure, you should be able to negotiate it down toward the lower end.
Another great tool that came out since I published my book is a price transparency tool at Turquoise Health. The tool allows you to get an estimate on everything from lab work to open heart surgery. You can find the tool at this link: https://turquoise.health/
If you fit the hospital’s criteria, you can also apply for financial assistance. Do know that you will have to provide the hospital with quite a bit of paperwork, including your tax returns, pay slips, bank statements, current debt, and anything else that they may require to use this benefit. Many hospitals will make you apply for Medicaid first, which will lengthen the process.
Negotiations get harder once a collection agency is involved, so get in front of this. You want to offer to pay them something, as that is a show of good faith. If you negotiate properly, the figure should be what you can afford as well as income that the hospital can count on. Most hospitals have two sides to the business. On one side is the caring of the patient by the clinicians, and the other side is the business office, which has to bring in income for the health care organization to survive.
Working with your hospital on a payment strategy is important, but if you feel that you can’t get any further with the individual that you’re talking to, do not be afraid to ask to speak to their boss or another individual. Like any other profession, some people are very good at what they do and want to meet your needs because you are a paying customer of the hospital. Other individuals may not like their jobs and sometimes don’t act very happy during the negotiation process. It is your right to deal with someone in the business office who is sensitive to your needs. You are respecting the fact that the hospital needs to make money to provide care for your community, and the hospital respects that health care can be very costly and works with their community members to ensure a payment plan meets their needs as well as the hospitals.
In closing, never take out a loan or use a credit card to pay off a hospital bill. Work with the hospital to develop a payment plan and save yourself many dollars in interest. Negotiation is the key.
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You can purchase Dr. David Wilcox’s book How to Avoid Being a Victim of the American Healthcare System: A Patient’s Handbook for Survival on Amazon at the following link https://lnkd.in/diZKYC2
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