By Bill Rusteberg
Consumers are responsible for all cost of goods and services they purchase including health care services. Health insurance by definition is a reimbursement scheme for covered medical goods and services.
Here is a common sense health care reimbursement plan for consumers which could substitute as an alternative to status quo traditional coverage (that’s provably worse at double and triple the cost):
Medical / Surgical Benefits 100% Of Allowed*
Rx 100% Of Allowed**
*Government Mandated Reimbursement Rates Accepted By Over 90% Of The American Medical Community
**Limited To Drugs Under Government Specialty Drug Threshold Definition
No Network – Freedom to choose any provider of choice
No PBM – Pharmacy or member files claim for reimbursement
Balance Billing, if any, replaces deductible, co-pays, and co-insurance common to traditional health insurance plans. Statistics prove less than 4% of claims are balance billed. That means more than 90% of the time all financial barriers to health care vanish under this common sense based health plan.
Traditional Health Insurance Claim Transactions Creates Moral Hazard
An Assignment of Benefits is a common, almost universal form of financial credit extended by providers as a courtesy to plan members. Providers carry debt on their books until reimbursement is received through the member’s insurance policy.
Pharmacy Benefit Managers front covered pharmacy expenses through a revolving Letter of Credit, carrying debt on their books until reimbursement is received from the plan sponsor, freeing plan members from upfront cost of goods.
In both cases plan members enjoy health care financing fronted by other people’s money. This process isolates consumers from the true cost of health care, creating a moral hazard.
New Health Insurance Claim Transactions Eliminates Moral Hazard
Plan members are responsible for paying for health care services as has always been the case. Nothing changes in that regard. Sometimes providers will carry the debt for the member in the form of an Assignment of Benefits and sometimes they won’t.
This process removes traditional managed care blinders by placing consumers on the front row of health care finance. Consumers, for the first time, are incentivized to shop health care prices just like they do for everything else. They are empowered and rewarded by seeking out goods and services independent of any third party intermediary whose vested interests are often at variance with traditional American business values and practices.
Will this plan sell? Of course not.