Open Enrollment and the Quirks of Insurance

As we’ve discussed before, insurance is a complicated business, especially health insurance. As such, a lot of interesting quirks and contradictions exist within the insurance and health care system – almost all of which benefit those who have health insurance. During open enrollment, take some time to consider your insurance options: if you don’t have insurance, open enrollment is your opportunity to get covered, and if you already have insurance, open enrollment is the right time to make changes to your plan or to switch plans entirely.

One of the most interesting quirks of health insurance is that it isn’t really insurance at all, at least not in the way we think of other types of insurance. For example, when we purchase automotive insurance, we don’t make a claim when we need to replace windshield wipers, when our wheel bearings wear out, or when we need new tires. Instead, we make claims for big, unexpected repairs that are the result of a crash.

With health insurance, on the other hand, we make a claim for every doctor visit and every prescription – whether it is unexpected or routine. Aside from over-the-counter medicines, we generally assume that our health insurance will cover every health-related expense that we incur – and that we’ll only have to pay a set amount regardless of how much it costs. This is why we rarely ask how much a test or procedure will cost when our doctor recommends it – and why hospitals rarely discuss costs with patients, especially if they are insured.

The other major difference between health insurance and other types of insurance is that needing health care is almost a certainty. While people with flood insurance may never experience a flood, people with car insurance may never be in a collision, and people with earthquake insurance may never suffer damage to their home as a result of an earthquake, every person will need health care of some kind in their lifetime. While many people do not necessarily need health insurance when they are young and healthy, needing health care of some kind once we get older is nearly a certainty, and we don’t usually buy insurance for things that are certainties; instead, we buy insurance for things that are only possibilities – like floods, automotive crashes, or earthquakes.

Aside from the fact that health insurance isn’t like other types of insurance, another interesting contradiction that exists within the insurance world is that people with insurance are privileged with lower prices for things than people who are uninsured or than what a hospital would normally charge. Granted, people who are insured may not realize this because, as we mentioned before, most insurance plans require those who are covered to pay a set amount regardless of the cost of a test, procedure, or prescription.

However, the insurance companies themselves often negotiate with hospitals to get better pricing for the individuals they insure. Medicare, for example, is one of the biggest insurance networks in the United States. As a result, they have significant bargaining power with health care providers since they can leverage coverage at an establishment for a better deal – if a hospital won’t negotiate, the insurer won’t cover care at that hospital, which will cause the hospital to lose business. While there are also laws and other statutes in place with Medicare to keep prices down, hospitals usually charge patients with Medicare about one-fifth of what they normally do.

Many insurance carriers can also negotiate pricing, so people without insurance pay double, triple, or even more than what people with insurance pay for the exact same tests, procedures, and prescriptions. Granted, people with insurance don’t really notice this difference because they are paying set amounts for deductibles or copays, but the hospital is charging them less, and their insurance carriers are paying less than what the hospital normally charges.

Beyond the fact that health insurance isn’t really insurance and that insured people are charged less for health care than uninsured individuals, one of the most shocking contradictions within the insurance landscape is the fact that having better insurance doesn’t result in having better health. While people with better insurance coverage tend to take advantage of it by going to the doctor more often and checking into the hospital more frequently, their health, on average, is not any better or worse than the health of those who have less coverage. In short, having better insurance doesn’t mean that people are in better health.

What health insurance does do, however, is protect people from astronomical costs if they do suffer from a major medical problem. Every year, the number one reason for filing bankruptcy is health care bills, and a significant portion of the population in the United States struggles financially as a result of medical expenses. Just like it is with other types of insurance, having health insurance protects individuals from economic catastrophes associated with unexpected disasters. By analogy, if you have flood insurance, it doesn’t necessarily protect your house from normal wear and tear or prevent you from having to pay for things like lawnmowers or tools to keep your house in good shape; however, it does prevent you from having to pay astronomical amounts of money if your home is severely damaged by a flood.

Health insurance, although it doesn’t operate the same way as other types of insurance, accomplishes the same thing. It can’t prevent the normal wear and tear on the body that we all experience or prevent us from having to pick up pain relievers when we have a headache, but if we do have a major health issue – like needing our appendix removed or being severely injured in an accident – health insurance can protect us from the astronomical costs of care.

This is why it is so important during open enrollment to explore your insurance options. If you don’t have health insurance yet – make sure to purchase a plan. If you already have insurance – make sure you’re getting the most out of it by switching doctor groups to a quality health care provider like Meritage Medical Network. We are located in Marin, Napa, and Sonoma Counties, and our professional and experienced staff are committed to ensuring that you get the absolute best health care available.

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