Navigating the U.S. Healthcare System Without Getting Financially F***ed

Katie: Welcome back, rich girls, to The Money with Katie show. Today's episode is going to be a little bit unique. Why? Because the takes are going to feel a little bit hotter than normal and we are going to talk about something that I've never addressed before.

Katie: We're diving into a topic that candidly, I have always shied away from for two major reasons. The first is that it can be construed as political, and I try my best not to open partisan cans of worms with an audience of 60,000 some odd people because I value my peace of mind. And frankly, that usually blows the lid off of it. And the second more honest reason, I didn't really understand it. Part of the joy of Money with Katie for me is that I write and share about things that I feel like I understand. I can bring humor and fun and entertainment value to otherwise boring shit because I get it. But health insurance, I've never really spent the time to understand it because it felt like a black box of deductibles and copays and confusion. And honestly, I didn't want to spend the time sifting through that hairy junk drawer.

Katie: Now, I graduated from both high school and college with a 4.0, I read irs.gov for fun. I consider myself a relatively critical curious thinker, but I didn't want to touch the healthcare system with a ten-foot pole. It always made me feel stupid that I didn't get it. And instead of leaning into that feeling, I avoided it. It wasn't until I started researching for this episode that I realized it makes me feel stupid and confused for a reason. It's designed to. When I heard experts on the matter describe it as a fragmented broken system of overlapping patchwork policies that impact different people in different ways based on a slew of opaque reasons locked away in the filing cabinets of claims adjusters' desks, it started to make sense. And while I'm more fired up than I have been in a long time, and you'll hear why shortly, and wish I could change this system, I can't. At least not right now.

Katie: So we'll start with how the fuck this system works or rather it doesn't work and then we'll move into strategies for outsmarting and navigating it if you find yourself on the other end of an outrageous medical bill that you thought should have been partially or totally covered by your insurance. Because as you'll hear in these interviews today, insurance companies spend a lot of money on employees whose express purpose is to find creative ways to deny your claims. You'll hear from a number of people like a new mom who gave birth and to her surprise was at the mercy of two deductibles, hers and her infant's, “Huh? You're billing my two-day-old baby?” You'll also hear from a healthcare consultant whose entire job revolves around advising hospitals and humans on how to fight back against the insurance companies. Oh, and those insurance companies, you'll hear about their record breaking profits.

Katie: Of course, we'll also address some of the common pushback that people use to defend our broken system. Like, “You're fetishizing socialized medicine, you dumb millennial.” But I learned while researching that there are only two truly socialized healthcare systems, Cuba and the U.S. Department of Veterans Affairs. No other healthcare system in the world meets the criteria for the label, socialized medicine. The origin story, by the way, for the at terminology and politics is super interesting. So we'll dig a little bit deeper too.

Katie: And how about the pushback that American care is more expensive because it's better and faster, but there's just one problem, it's not. For the richest 5% of Americans that can pay to play, yes, it is the best healthcare in the world. But for the other 95% of the U.S. population, well, of the 11 richest countries in the world, America's healthcare system ranks 11th. The judgment metrics are as follows: access to care, care process, administrative efficiency, equity, and healthcare outcomes. The U.S. ranked last in four of the five criteria with the exception of care process for which we ranked second. But don't worry, we sure do spend the most. That's right, a lot of critics claim that universal healthcare or something like it would be prohibitively expensive, but our country's healthcare spending as a percentage of our GDP is the highest of any country in the world by quite a bit. If you're like me and formerly believed that our system was cheaper to maintain, you may find that surprising. And today, we'll dig into why that's a thing.

Katie: The craziest thing about what I found while researching is that the U.S. could relatively easily mimic another developed country's system and it would be much simpler and cheaper than what we're doing now, but we'd have to find the bipartisan support to untangle and overhaul the system as it is now. And unfortunately, we don't have a lot of bipartisan cooperation in America, especially bipartisan cooperation that isn't at the mercy of pharmaceutical company and insurance lobbyists. I love America and that's why I want to see this change. I want America to remain a global power that's considered a great place to live. And right now, the American healthcare system is a black eye on that reputation. So what is the TLDR here? Until very recently, the U.S. was the richest country in the world, now China is, but it's the only developed nation without universal healthcare. And what do we have in its place? An exploitative, expensive system that doesn't work for the majority of our citizens. That means we're spending more for worse outcomes. And in the personal finance world, we call that inefficient. So, yeah, we'll talk about all of that today.

Katie: With that said, let's begin with a little bit of levity and all have a laugh at my expense. My first true brush with the healthcare system happened when I was 17. Up until that point, I was insulated from the cost of care by my dad's health insurance policy. My mom would dutifully shuffle me from appointment to appointment. My optometrist, my orthodontist, my pediatrician, my dermatologist. My parents took really good care of me and they made sure I always had the care I needed. And as a result, I am a healthy adult with straight teeth, eyes that can see and about five fewer questionable moles on my body. That was the privilege of having parents who made good money and had good health insurance in the United States. I thought our system was great, because I never saw a bill and had a health concierge in my mom who scheduled and chauffeured me to all of these appointments. Then when I was 17, I threw all of that good parenting in their faces and got arrested for a public intoxication at a, are you ready for this? Lady Antebellum concert.

Katie: Yep, my scrawny 17-year-old self decided to get blackout drunk and then go out in public and ended up in the back of a cop car. To be honest, I don't really remember most of that night, but I do remember throwing up in the back of a cop car and sitting in an emergency room. I didn't need my stomach pump or medical attention, but because I was a minor, they couldn't take me to jail. So instead they took me to the hospital where I sat and shifted awkwardly on the paper covered seat of an ER room while the cop sat in the corner and intermittently told me to shut up every time I asked him through slurred speech what was going on. I'm pretty sure a nurse came in and offered me a cup of water. But for the most part, it was an uneventful drunken 30-minute wait for my parents to come get me and ground me for the rest of time.

Katie: I thought that humiliating, shameful experience was the worst of it, but then the hospital bill came. More than $1000 for my emergency room visit wherein I essentially sat there, drank water, and waited for my mom and dad. I was shocked and my parents were not paying that bill. Nope. They told me I could figure out a way to pay for it since I decided that I was adults enough to drink. It was confusing. Why was I being charged $1000 for just going to the hospital? I didn't get it. The discharge paperwork they provided me had less than helpful instructions to drink less alcohol. I ended up having to go to court twice to get the charge expunged. And in retrospect, that might be the most ass-backwards part of the story.

Katie: Two cops babysat me for three hours at that concert in the medical tent, trying to reach my parents. When they couldn't, they took me to the hospital and waited with me there. Then I put a strain on the court system and wasted some poor judge's time by having to show up for two separate events to get my record cleaned. Something that was only possible because I was not yet 18 and therefore deemed redeemable by the system. The fees from court, less than $300. Of all involved that night, the hospital was the last place that should have been charging me $1000. The cops and the court system were way more taxed by my stupidity and yet their participation in my drunken shit show were basically free by comparison, paid for by our taxes. Even back then, I remember thinking, what the fuck is this system? So yeah, what the fuck is this system? Let's talk briefly about how we got here.

Katie: Before the 1940s, health insurance was practically a philanthropic pursuit, but after World War II, employers started offering health insurance and demand boomed. The percentage of Americans with health insurance went from 10% to more than 60%, enter all the for-profit insurance companies, which separated the healthcare consumer from the payments. And what happens when you separate a consumer from the price? The prices start going up. In the 1980s, our healthcare spending began far outpacing the rest of the developed world and yet our life expectancy stayed the same or even began lowering while others were still going up because it feels like nobody's paying for it. And today, we spend a ridiculous amount of money on healthcare. The U.S. spends roughly the same amount as a percentage of GDP on Medicare and Medicaid alone that the rest of the rich countries spend insuring their entire populations and the private sector spends even more. A better organized system that covers everybody would almost certainly cut our healthcare costs. After all, every other rich nation's system is cheaper than ours.

Katie: One common piece of pushback is this idea that care here must be better or somehow superior since it costs so much more, that health outcomes in America are better than they are in countries where the government is more involved because “you get what you pay for,” except it's not. The U.S. has demonstrably, repeatedly worse health outcomes than other countries that have less and spend less than we do. More than 20,000 Americans die in the prime of life each year for medical problems that could be treated because they can't afford to see a doctor. The Commonwealth Fund examines avoidable mortality, a measure of how well a country does at curing diseases that are curable. A 2008 report found that the number of people under 75 who die from curable illnesses was almost twice as high in the U.S. as in the countries that rank in the top five like, France, Japan, and Spain.

Katie: We have higher infant mortality rates too. The American healthcare system ranks dead last in developed nations when it comes to keeping newborns alive. Estonia, Slovenia, Hungary, the Czech Republic, Korea, Israel, all of these countries have lower infant mortality rates than the U.S. Part of the reason our health outcomes are so much worse is because our healthcare system isn't focused on preventive care because the average customer stays with the same insurance plan for less than six years. And insurance executive with his eye on the bottom line has very little financial incentive to pay for long term prevention. There's a lot of short term thinking, which compounds inefficiency and expenses.

Katie: So do me a favor, imagine a world for a moment where you have a card, like an ID that has all of your health data stored on it. The fact that in 2018, you had your wisdom teeth removed and you're allergic to amoxicillin and you told the doctor you were having shoulder pain back in 2009, but they figured out it was just muscle fatigue and surgery wasn't necessary. And every time you go to any doctor, you just hand over this card and in minutes, the doctor knows everything about you and your health history. Maybe this card can even tell the doctor exactly what insurance plan you have and what your coverage is like. That way, they can prescribe care and medication that you can comfortably afford. Is this what the blockchain can give us, Web3, the metaverse? No, this is just what it's actually been like in places like France and Germany since 2008. How much difference in Germany pay for their healthcare per capita and as a percentage of GDP compared to the U.S.? Roughly half.

Katie: Speaking of Germany, their quality of care is world class. It stands at or near the top in all comparative healthcare studies. The supply of hospitals and doctors is ample. There's no queue for treatment. And when it comes to metrics like waiting for care, Germans spend less time waiting than Americans do. And what about those French? French hospitals generally have more doctors per patient than America, but they have 67% fewer administrative personnel to keep track of paperwork and billing. Because in France, there aren't complex billing procedures. 67% fewer administrative personnel is a huge cost savings that we don't have the benefit of. In fact, the profit making health insurance giants in the U.S. generally spend around 20% of all premium income just on administrative expenses.

Katie: Let me ask you a question. Do you find it insulting that I would suggest that we should try to learn from Germany? American innovative spirit used to look to other countries to see what they were doing better and then say, “Hey, let's take a page out of their playbook and then approve upon it.” That's how we got the U.S. highway system. Eisenhower went to Germany, saw the Autobahn and was like, “Wait, we just have unpaved dirt and gravel pathways between major cities. This works way better. Let's build a highway system.” For some reason with healthcare, we get really defensive about the fact that other countries are clearly succeeding in an area where we have room for improvement.

Katie: Now, the French and Germans still think that their programs are too expensive and they reform them often. They don't like running these programs with any deficit spending and the U.S. knows a thing or two about deficit spending, but where is all the money in the U.S. going? Well, for one thing, the skyrocketing costs of drugs. Usually, this is where someone will suggest that we have to keep raising prices and spending more because we're using it to research and develop new drugs, that our healthcare system is expensive because the money is fueling all of the innovation in the world. And pharmaceutical companies do spend on average, around 20% of their total revenues on R&D. That is really high. Make no mistake though. On average, they spend more than twice as much on advertising and marketing the drugs than on researching them. Another aspect of American medicine that is unique to us.

Katie: The idea that the U.S. is innovating for the rest of the world and we're somehow subsidizing everyone else's advancements by being the leading innovator is not supported by the data. The U.S. actually ranks sixth in the world index of healthcare innovation behind Switzerland, Germany, and the Netherlands, to name a few. And because a lot of these drugs are patent protected in America, no one else can make them. The drug company has a monopoly on the market and can charge whatever they want for the drug. And to quote Elisabeth Rosenthal, the author of an American Sickness, “Once people realized that you could get away with this stuff, it just kind of became a race to the top.”

Katie: Another reason it's more expensive in the U.S. is that our doctors make a lot more money. Sometimes two to three times as much as their European counterparts, but they often have another thing that these doctors don't, hundreds of thousands of dollars in medical school debt. In Europe, medical school is very inexpensive or even free. There's too much inefficiency in the system because there are too many layers of people getting paid. This is ironic as usually the private sector makes things more efficient, not less, but not in this case. Because in America, healthcare isn't a right, it's a for-profit industry.

Katie: That's why T. R. Reid writes in his book, The Healing of America, that when he talked to a Taiwanese businessman on the planning committee for creating the healthcare system in Taiwan, the man said that they've got a lot of respect for America. And so at first they wanted to do whatever America did thinking they've got to have the best system, but then this is a quote, “American healthcare is not really a system at all. It's a market. In a market, people with money can buy whatever they want, and many people are left out. So we thought, no, we don't want market driven healthcare, we want a real system, something that covers everybody and doesn't depend on how much money you have.”

Katie: And even having money doesn't make this system simple and painless. If you or a family member has a chronic illness, it can feel like you're the medical secretary for your home. Between making sense of the paperwork, making phone calls to appeal denied claims, and just generally dealing with all the different players involved, it can become a full-time job to ensure you're receiving medical care that you can even remotely afford. The four biggest insurance companies, United Health, Anthem, Centene, and Humana had combined annual revenues last year of $639 billion. Now, that's just revenue, not profits, but it illustrates just how much money is bloating this system. A new analysis from insurance giant Humana itself and the University of Pittsburgh School of Medicine found that between 760 billion and 935 billion or about a quarter of all U.S. healthcare spending is considered waste.

Katie: And while we're on the topic of money, a popular criticism of changing our current system is that we need to spend a lot more money in order to provide universal care, but that's not necessarily true. We're already spending more than enough, just not efficiently. We are all so afraid of paying incrementally more in taxes that we forget that some of these countries that pay more than we do get a whole lot of bang for their buck. Consider this, Sweden has the fourth most competitive economy in the world, ahead of the United States by the way, according to the World Economic Forum. In return for paying higher taxes, Swedes have access to a generous support system that includes not only quality healthcare, but also childcare, a more generous retirement pension, low cost college education. Most Swedish universities charge no tuition fees, job re-training, paid sick leave, paid parental leave after birth or to care for sick children, ample vacations, affordable housing, senior care and more. Yeah, that's a long list. But if you have a $5,000 insurance deductible for your family, you may end up paying more just for your health insurance alone then an increase in taxes would've increased your tax bill.

Katie: In other words, it's not that the U.S. doesn't have the money, it's just that we are spending our money incredibly inefficiently. But if you mention that another country might have a better system for its citizens than we do, it's likely you'll get hit with the claim that you're a socialist or a proponent of socialized medicine, but none of these countries are socialist, none of them have socialized medicine. In fact, the term can be traced back to a public relations firm that was working for the American Medical Association in 1947 to make fun of President Truman's proposal for a national healthcare system. It was a label that in the beginning of the Cold War meant to suggest that if you thought everyone should have access to affordable healthcare, you're a communist.

Katie: So how do other countries do this? Let's talk briefly about some other approaches. I want to focus on two specific healthcare system models that came up in my research because it surprised me to learn that the other wealthy nations don't have government provided healthcare necessarily, but still have private doctors and private insurance companies. The first is the Bismarck Model named for Otto von Bismarck,. It's found in Germany, Japan, France, Belgium, and Switzerland. This research comes from the book, The Healing of America.

Katie: In the Bismarck Model, both healthcare providers and payers are private entities. The model uses private health insurance plans usually financed jointly by employers and employees through payroll deductions. Sound familiar? Unlike in the U.S. though Bismarck plans are basically charities. They cover everybody and they don't make any profits. Tight regulation of medical services and the fees that can be charged gives the system cost control. In the other model that's interesting, the Beveridge Model, healthcare is provided and financed by the government through taxes. There are no medical bills because medical treatment is a public service like the firefighters or police. Great Britain, Italy, Spain, and most of Scandinavia use this model. This is probably the model that most Americans have in mind when they talk about socialized medicine. Canada's model is different entirely though, we won't spend much time on it. It's called the National Health Insurance Model.

Katie: But what's worth mentioning. Here is the fourth model, the out-of-pocket model. While all of the developed, rich, industrialized nations have established healthcare payment systems, many of the nations on earth are simply too poor and too disorganized to provide mass medical care. The basic rule in those poorer countries is this, the rich get medical help, the poorest stay sick or die. The wild thing is that the U.S. has aspects of all of these, depending on if you work, who you work for, how old you are and how much money you have. And for the 28 million Americans that don't have health insurance, they're basically in the same boat as the people in the rural or undeveloped areas in poor countries, paying out of pocket, staying sick or going bankrupt. So, yeah, it's an issue.

Katie: Now, researching for this episode was honestly pretty depressing, made more so by the fact that I know I can't do anything about it. I don't have a solution to the fact that our system is broken. But the one thing I can do is bring in resources who can explain what kind of options you have. None of these solutions fix the problem. They just address the symptoms and will attempt to do what the rest of Money with. Katie does, give you the knowledge and confidence to navigate things to the best of your ability, even within a system that sucks.

Katie: So let's split this whole how to handle it thing into two parts, things you can do before you receive care to try to lessen the chance that you get a bill that totally thunderfucks you and things you can do after you receive that bill anyway. Before I knew anything about this, I would've said, “Okay, yeah, I mean, it's shitty, but I guess I just need to stay employed by an employer who provides health insurance and pay for it.” But that's the thing, even having health insurance doesn't guarantee that your care is going to be paid for. You still may end up footing the bill and you often have to research extensively before even agreeing to receive care to understand whether or not your insurance company will pay. And that's not as easy as it sounds.

Katie: If you go to the hospital, you could see five different care providers and only one of them might be covered by your insurance. If you are unconscious or in a state where, I don't know, you're so in pain that you're in the hospital so you're not asking, “Hey, by the way, that doctor that just came in here, is he in-network? If he's not, I can't accept his care because I can't afford the $6,000 bill that my insurance won't pay.” There is some good news on that front tentatively. There was a bill passed recently, the No Surprises Act that tries to help with this, but it only applies at hospitals. So the question to ask if you're going basically anywhere other than a true hospital is not, “Do you accept my insurance?” It's, “Is everyone that I'll see today in network for my insurance plan X, Y, Z.” Then you would read the name of the plan on your card and provide all of the details.

Katie: Figuring out if insurance will cover something, assuming you're conscious and not in the back of an ambulance is best handled by calling your insurance company. Find the phone number in your packet or on your card or whatever you have and ask them, “I'm planning to go to this specific office or hospital to see this specific doctor to receive this specific treatment, what will my out-of-pocket cost be?” They can figure out what they'll cover so you're not surprised. I had a few other questions though, about the best way to approach this. So I asked Taylor, a healthcare consultant.

Taylor: Hi, my name is Taylor and I work in the healthcare industry as a consultant. In very basic terms, I help hospitals get paid for the care that they provide to patients. This involves coordination between health insurance companies and hospitals, and understanding how rates are negotiated between the two parties. So while I work on behalf of hospitals, I still do see the patient side of things and how you guys are affected by claim denials and surprise bills.

Katie: For our listeners, Taylor is the kind individual who gave us the free template for when your insurance claim is denied and you have to fight for your life in Gmail. So, Taylor, I really appreciate you coming on the show.

Taylor :Of course, I'm happy to help.

Katie: I have a few questions for you about how people can best exist within the system as it exists today. Because obviously, we can't exactly change things tomorrow. So let's say someone already has their insurance plan for the year, since we are outside of that open enrollment period, let's say, it's February or it's March and you have what you have and they want to go see a doctor for preventive care. What types of questions should they be asking at the outset? Like, how should they think about finding a provider and calculating their costs to try to avoid surprise?

Taylor: The very first thing that someone should do is find out what their network is and ensure that the provider that they choose to see is considered in-network with their plan. By network, it's basically just describing the negotiated contract between the doctor or the hospital and the insurance plan. So one of the best ways to do this is just by going to your health insurers website and searching there. Most of the major health insurance companies have an option where like, if you already have your doctor and you want to make sure that they're covered by your new plan, you can search by the doctor's name, or if you're trying to find a brand new doctor say, you've never been to the dermatologist and you want to go for the first time, you can search by specialty and find all the doctors that are in network near you.

Taylor: I like this method because it is A, really fast and easy to search for what you're looking for. And B, it is easier to screenshot and document, rather than calling your insurance company over the phone. A lot of times you could talk to someone that might not understand what you're talking about. They might give you false information and it's harder to argue your case down the road if you have to that, “Hey, you told me this was a network and now you're saying it's not. What gives?” If you have screenshots, receipts, screenshot it, save it for later. And hopefully, you never have to use them. But if you do, that's the best way to go about it.

Taylor: Second step would be just to be ultra careful is when you call to schedule your doctor's appointment, before you ever set foot in that office, just confirm over the phone like, “Hey, I just want to make sure this office is covered, my health insurance will cover this visit.” Just to make sure that you're told by multiple parties and you can use that to your benefit if for some reason later down the road, it doesn't get covered.

Katie: What about during the visit? Like, is there anything someone should be aware of while they're visit sitting with the doctor, questions they should or shouldn't ask that may impact the price of the visit?

Taylor: If we're just talking like a preventative annual physical, for example, there's not going to be any kind of qualifiers or criteria required for coverage like there are with other types of procedures or if you go to the hospital, things like that, you might have to get different authorizations. However, I would definitely ask questions during your physical if your doctor recommends additional testing that kind of falls outside the normal scope of a physical. It might be possible that your insurance won't cover that. If that worries you, you have the right to ask and feel empowered to do so. They're like, “Hey, we want to run this additional lab work.” Say, “Yes, that's fine, but can you check with my insurance first that it's going to be covered before we proceed?”

Taylor: And every doctor's office has employees that are very skilled at dealing with health insurance companies, that's their job. And so that usually just involves them calling up your insurance and saying, “Hey, I have so and so here, we want to do this test for this reason. We want to make sure it's covered under their plan.” Because what's funny is all these insurance companies have policies online that you can look up and they might say, “Yeah, we cover this test.” But there are in your plan documents, sometimes exclusions. Like fine print that says, we don't cover things like cosmetic procedures or random things that might be excluded. So making sure that they're looking at the specific plan is really important.

Taylor: And also, this only really applies to physicals, like annual exams. If you ask about a specific medical condition during your annual physical that's not related to just a general health check, they can bill that separately. And so your health insurance company is going to categorize your preventative annual visit separately than a normal office visit. For example, if I have migraines and I'm at my yearly visit and I'm like, “Hey doc, I've had migraines for months. Like, let's talk about it.” That can then turn from my covered annual exam into a problem visit that then I'm responsible for a different copay. I might have to meet my deductible first before they start covering that. Whereas usually an annual exam, your deductible is waived from that. There's a lot of nuance there. And normally your ... Like my doctor's office, I noticed last time I was there has a big sign. Like, “We cannot discuss a specific concern during your annual physical. Schedule a separate appointment.” Because if they do, they have to bill it separately. And then these patients get surprise bills like, “Hey, I thought I was going for a covered yearly exam and now I have this bill.”

Katie: It's funny because this is what someone told me about my dermatologist appointment. They were like, “Did you ask her at any point about a specific concern or was it just a mole check?” And I was like, I mean, it was just a mole check and she asked me if there were any moles I was worried about and I pointed to a few, but I was like, I had no idea that I had to be so careful with what I was bringing up and that, that could change the entire scope of what I was going to have to pay for.

Katie: So I'm going to run with this migraine example. If somebody, their physical is coming up, they're having headaches, would the most auspicious way to proceed be to proceed with the physical, mention nothing, and then set up a separate appointment to talk about the headaches, or if they talk about the headaches and the physical, are they just going to end up paying the same price and knocking it all out in one visit? It sounds like regardless if you're coming to a doctor and saying I'm having a problem, which is kind of ironic and sad in the whole point of this episode, that the system is so fucked up, but like, what would the best way to proceed if you were in that situation?

Taylor: Yeah, it's sticky because a lot of people, they have to take off a day of work and find maybe childcare for their kids. It's kind of a burden to go to the doc and then you might have a copay that you have to pay. And so in your head, you're like, “Okay, two separate doctor's visits. Like, I'm going to have to take off two afternoons from work, find a daycare or babysitter, and then also pay two different copays.” And so that's kind of reducing access to care, right? And so my thought would be, yes, you could bring it up with your doctor and say, “Look, I know sometimes you can't talk about specific things during a physical. If that's the case, can we go ahead and schedule a separate appointment for this issue?” Or before you even go to your doctor, your physical exam, maybe call the office and say, hey, I have a separate thing I want to talk about, can we schedule back to back appointments of my physical and then the specific issue, migraine question. So that you're there on the same day.

Taylor: The only caveat out to that is make sure insurance doesn't have an issue with you having two doctor's appointments in one day. I don't know that, that might be, but every plan is so different. They make things so complicated to figure out that, that's just another roadblock. But that would be my ... Like if I had to do it, I would go to all of my doctor's appointments in one day so I don't have to logistically plan that out on separate days. So that would be my recommendation, but again, please check with your insurance company and do not come after me if they don't get that second visit.

Katie: I think that's the thing to underscore for this entire conversation is like, you are a guide. You can give us these little tips and tricks and point us in the direction of things that could be problematic so we are aware of them, because hello, I was in no way away ... I mean, I'm walking to that dermatologist office like, “Yeah, let's talk about my Crow's feet. Let's talk ... ” I mean, you're asking me if I have any other concerns, well, shit, I'll sit here and think of some. But to know these things is super helpful, but I think that's the thing to underscore is like, if you have any doubt at all, call the insurance company ahead of time and ask them, give them the specific thing, “This is what I'm going to do. What is this going to cost?”

Katie: So, okay, what are some other common reasons that someone could end up with a bill that they weren't expecting? Like, is there anything else that you would kind of file under this folder of okay, things so that you probably wouldn't think that you have to look out for, but reasons that you could end up getting a bill that you weren't really expecting?

Taylor: Yeah. Unfortunately, I could talk for hours. There are many reasons and every day I come across a new reason that I haven't heard of before in my life. And so it's unfortunate and it changes so much. It's heavily legislated. Policies change insurance. They change their own policies all the time. But I would say the main ones are what we talked about, in-network, out-of-network denials, things like the different types of office visit.

Taylor: One that has happened to me is that I went to an urgent care once and the urgent care itself was in-network with my insurance, but the nurse practitioner that I saw at the urgent care was out-of-network. And now, when you're going to urgent care because you're sick and you're just like, “Give me a Z-Pak.” You don't ask if your nurse practitioner is also in-network. You know, month later, I get a bill for $300 for urgent care and I'm like, “My copay is $50. What is happening?” And that is unfortunately something that has happened to so many people, especially long hospital visits. The doctors that they're seeing in the ER or their surgeon or whatever. But they're not employees at the hospital sometimes, so that means that they're not in-network with your insurance.

Taylor: But I will say effective January 1st, a new law went into effect called the No Surprises Act. This basically kind of helps prevent this from affecting you as much. I won't say completely affecting you, but what it does is it basically prevents your doctor's office, your hospital from balance billing you if this exact scenario happens, right? Like your hospital is in-network, the doctor you saw was not, they have to only apply in-network cost sharing. Meaning that like your normal, if you went to a hospital that was in your network and you had to pay 20% after your deductible was met versus a 100% if you went out-of-network, you would only pay that 20%. So that just went into effect January 1st.

Katie: I found out about this because I was listening to another podcast and the guy on the podcast was saying that for whatever reason, one of the weird caveats is that it only applies in hospitals. So I was like, that's interesting that you have to kind of be aware.

Katie: Okay. So how can someone approach a situation where all right, they thought they did everything right or maybe they shit the bed and didn't do any of it right. They have a bill, right? They didn't think they were going to get a bill. What types of questions should they be asking after the fact? What options do they have at this point, generally speaking? I know it's going to vary a lot by which one of the 3,000 different plans you have, but in general, Taylor, is there thing that, you know, steps one through three, like somebody should be thinking about if they've got a bill that they're a little bit sketched out by?

Taylor: Oh, definitely. First question is, why? Right? So like, why is this denied or why is this more expensive than I expected? And the first place you can look is something called an explanation of benefits or an EOB. So every time you go to the doctor or hospital or anything like that, they're going to submit a claim to your insurance, which basically tells them all the services that you received, all the medication you were given, tests that were run, whatever. And then once the insurance company processes that claim, you'll receive an explanation of benefits, which tells you what was billed by the provider, what your insurance company paid for. And then what your portion is that you might owe and then also any denials.

Taylor: So they have kind of sneaky, little codes on there that might be a bunch of letters and numbers. And sometimes they'll have a description on there, sometimes you'll have to Google it. So Google is your friend, if there's no ... Next to those codes, if there's no like, “This is denied for X, Y, Z.” Google it. Usually, you'll be able to find what you need. But anyways, this will tell you why something was denied. So an out-of-network denial, for example, or they denied it because they didn't think it was medically necessary for your care, whatever it is, that'll be on that EOB.

Katie: And this is the insurance company that sends you this?

Taylor: Yes. So it'll either be online, like on your patient portal with, you said you had Blue Cross Blue Shield, it'll be on there. Sometimes if you're not paperless, they might mail you a copy. If you don't have it anywhere, call them and be like, “Send this to me now.”

Katie: Okay.

Taylor: This will tell you what is denied. You need that to be able to do anything else, to be able to kind of argue your case.

Katie: So you need the EOB to be able to proceed.

Taylor: Basically, yeah.

Katie: Okay.

Taylor: Sometimes, like I said, you can call and they'll send it to you. They might email it, fax it. Sometimes they mail it. But yes, that will just kind of explain what went wrong and why there's a surprise. You can also call if you don't don't have the EOB and you want to get the EOB. Yes, I recommend getting paper copies again, receipts. But the representative on the phone should be able to say, “This is denied for so and so.”.

Taylor: I will give a disclaimer there though. I've been told many a time on the phone by insurance reps, “Hey, this is denied for this.” And it's just false. It's not the right information because unfortunately, again, so complex, so nuanced that there might be something bigger at play that's actually causing the denial that they're just reading off a list of codes.

Katie: Okay. So would it be fair to say that we should have an attitude or a bias toward these types of negotiations or creative conversations with insurance that it's not unlikely that the person that we're talking to could be wrong after the fact, like we should go in assuming like this person might not know what they're talking about?

Taylor: Yes. That is almost always how we go into those conversations.

Katie: Wow! Okay.

Taylor: And I work on behalf of hospitals, so I'm really ... Yes, it's a patient's claim on the end a day, but it's, you know, I'm helping the hospital basically get paid for the patient's care that they provided. But yes, some of these reps, you can tell, hey, this might be their very first day on the job. They don't know the terminology that I'm asking for. I pretty much assume that I know more than they do, which again seems entitled, but I think that's kind of the attitude you have to have. Don't take what they're saying at face value at all. You can take it and believe it, but at the same time, I also encourage you to do your own research and make sure like, if what your EOB says is something different than who you're talking to on the phone, maybe ask to speak to a supervisor. You have the right to do that. And you'll speak to someone a little bit more tenured. So someone that's been there longer and know the ins and outs of your company, your insurance company a little bit better.

Katie: So we whip out our Karen, we put on our blonde, spiky wigs and our acrylic nails and we tap the table and say, “Something is wrong here. Something is very wrong.” Okay. What then? I've gotten my EOB or I've like talked to somebody and now what do I do?

Taylor: Yep. So you got your EOB. You're like, all right, this is denied for this out-of-network thing that I have screenshots of it being in-network. This is wrong. I am fighting this. Call is your next step. Depending on your plan again, caveat here, but you might even have an option on your insurance company's website to submit a dispute online. Some are doing that now. So check there first to see if there's like a dispute process. Usually, it's called like grievances or appeals. And they'll kind of outline what to do if you have an issue with your claim. But normally, I would just call and I'd be like, “Look, this is what happened. It denied for this. However, I know that this is wrong because X, Y, Z.” You're basically a lawyer, right? You're presenting a case. You're gathering evidence, presenting your facts. And then you're like, “Here's what you're going to do. I would like you to send my claim back for reprocessing and I'd like you to take another look at it.”.

Taylor: And they'll send it back to what's called the claims processing team. That could take anywhere from a couple days to a month or two. It just depends. Especially with COVID and all the craziness in the healthcare industry right now. That's very possible. So then if that pays after that, great, you gave a great argument over the phone. Congrats. Great job. However, that was not my experience. It denied, okay, now, what? Now, depending on your insurance company, you have a few different options. You can write an appeal, which is the template that I gave you guys that I have used myself. So you're basically then like, okay, in writing, attaching all said screenshots that we've already to taken and saying, this is wrong. According to this website, your website, my plan documents, or if they're saying it's not medically necessary, it wasn't urgent, attach your medical records, go on your patient portal, print them out, attach them there and say, “This doctor said that this was urgent.” Or whatever it was, argue your case. Then you can mail it to them.

Taylor: If you exhaust all normal appeal options for your insurance company and you're like, “I don't even know what to do.” But you're still like, “I'm not having this. I am still fighting it.” You can file a complaint with your insurance commissioner of your state. And in extreme cases, a lot of people turn to legal action, especially if the bill is enormous, because it's definitely worth it if they win to pay some legal fees. So those are kind of your main steps. EOB, call them, appeal, find a lawyer or talk to an insurance commissioner. Those are kind of like extreme cases, but usually if you fight back, you can get it overturned in most cases, if you have the evidence to support it.

Katie: So is there any sort of like statute of limitations with, if you've received a bill, like if someone is listening to this and they're like, I have a bill for $10,000 from four years ago, like, what is the limit there?

Taylor: Again, check your plan documents or on your insurance company website, I'm a broken record, but it usually is unfortunately like six months. Most plans will give you 180 days from the date of service. Sometimes they'll give you up to a year. That's less likely my plan's 180 days. Sometimes I would also again, check because my insurance plan requires me to submit a special form too. So when I wrote that appeal template, I attached a filled out form on top that I printed off from their website and they would not review it without that form.

Taylor: So definitely do your research, get all your ducks in a row and make sure that if you're going to fight it, you do it right away. Those are your best chances because they'll then, after six months or a year or whatever the timely filing limit is, they'll just deny it saying you only have this long and you didn't do it.

Katie: Wow! Okay. So these are some great tips for navigating the system that is so blatantly trying to screw us out of our money and out of our health. Taylor, thank you so much for being here. Any last parting words to leave with the rich girl audience before you go?

Taylor: I guess if there's anything I've learned working in the healthcare industry, it's that while I understand our free market kind of attitude towards health insurance, I also see the dark, twisted sides, the ins and outs of it that infuriate me and make me lose all faith in humanity sometimes. But the biggest thing is our healthcare system, the way it's designed really puts the ownership on you, the patient to advocate for yourself and your own care. So that's my biggest piece of advice is speak up, ask questions. If you think that something's not right with your bill, say it, talk to literally anyone about it. And chances are, you have a pretty good chance of getting that fixed because a lot of people don't have the time or the energy, or even know how to fight things like this and they bank on that, right? So these are for profit insurance companies. And unfortunately, they make money when more and more people don't understand how it works.

Taylor: So learning how it works is very complicated. It's not easy. I'm learning something new everyday still, but just try to do your research. And like I said, ask questions and advocate for yourself.

Katie: So yeah, I used to think, hell, I'll just avoid this system altogether and I'll stay healthy, but what if you want to have a healthy baby?

MWK Listener: So long story short, I had what I would consider as a best case scenario birth story. From the time I got to the hospital to the time my baby was on my chest was about an hour. That being said, it went so quickly that there was not time for the epidural I had planned for. I had no complications. I did not need any extra care. I didn't even need the Tylenol that they tried to offer me. We were in the hospital for about 36 hours. No major complications with her care either. So all in all, it was a very low touch hospital experience. And after I totaled it up, just that 36-hour visit was billed about $45,000 and we paid out of pocket 2,000 with our very good insurance or what I consider to be good insurance paid for by my employer.

MWK Listener: So this doesn't include any of the costs prior to her being born. So the OBGYN and any fertility services. This also doesn't include any of the care afterwards. Sometimes multiple times a week, pediatrician visits, or even the surgery that was required for her to be able to eat properly. She had both a lip and tongue tie and neither of those were covered by insurance. All in all, we paid out of pocket about 5% of what was billed. Again, we're very fortunate to have good insurance, but I cannot imagine what it would've cost had we had to pay a higher copays or a higher deductible for either of our care.

Katie: So what are we to make of this, rich girls? What is a sick girl to do? While following Taylor's advice should help us navigate things a little, we can also budget for the financial bludgeoning. Monday's blog post entitled, How I'm Budgeting for Health Insurance in the U.S. discusses a few strategies for thinking through how much to set aside. But apart from that, there's not a whole lot you can do. We are at the mercy of our employers and our insurance companies to make these types of decisions on our behalf. That's kind of the irony of this entire thing, you know? Many Americans hate the idea of healthcare being controlled by the government and yet we're just under someone else's for profit thumbs right now instead, our employers and the insurance they choose. And simply adding more people to the system or paying for more people in the system as it exists today can't be the answer. Adding a shit ton of people to the most highly inefficient, highly expensive system in the developed world will just make the whole thing collapse under its own weight.

Katie: And for the wealthy who like their current insurance or healthcare plans and are concerns that changing it would make things worse for them, the reality is that rich people are often not bound by any of these systems. If you have money, you can, for all intents and purposes, pretty much get whatever healthcare you want, whenever you want it. In that way, some suggest that changing this system in America would make it look a little bit more like the public school system. Everybody pays to support the public school system through taxes, regardless of whether or not you have kids at that school. And if you want to pay more for private schools, you are free to do so.

Katie: To use medical parlance, fixing this will likely be a long term major surgery. After all, some things are working well. We have very well trained doctors and nurses and state-of-the-art medical research and equipment. We can keep our private doctors and private insurance companies the way other countries do. We can rely on the private sector for most things in healthcare, just not the financing part. Giving the private sector control over financing healthcare means adding to the bottom line becomes the most important thing.

Katie: All right. That was a lot. Thanks for listening. That's all for this week. I will see you next week same time, same place on The Money with Katie Show.