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Florida Health Savings Account Plans Question & Answers

2013 July 29
by Sarah Fields

Chris asks…

Can anyone state what the unpaid obligations for health care services are each year?

Those promoting universal health care have some good points. Namely that health care services go unpaid for expensive services and then go bankrupt. So how much goes unpaid each year? Does anyone have the number?
I understand, but is there any place online where the number of dollars lost is even estimated?

Sarah Fields answers:

I have never been able to find such a number and if it did exist, it would be bogus. Why? Because health care has been hijacked from the doctors and the crazy government and large insurers are completely in control, so they play all the numbers games they want to concoct problems so they can have MORE control and MORE money from the taxpayers.

Example–what the taxpayer is billed for drugs:

“In 2005, ConsumerAffairs.com ran “Illinois Sues 48 Drug Companies,” in which they explained the lawsuit filed by the Illinois Attorney General, Lisa Madigan, which involved a different method of increasing the money taxpayers shelled out for prescription drugs. Nearly 20 other states filed similar suits by the article’s publication. State and federal health insurance programs reimburse providers (doctors, pharmacies, and hospitals) based on prices that the drug manufacturers list as benchmarks to various publications. The difference between the benchmark price, also known as the Average Wholesale Price (AWP), and the price the providers actually pay is known as the “spread.” The actual sales price of the drug is less than what a consumer or even the government pays for the prescription medication. This means that the government pays based on the AWP which is higher than what the providers pay and the providers are reimbursed by the government (taxpayer) at the higher rate. Remember that Medicare and Medicaid patients do have co-pays and their co-pays are based on these AWP prices as well, so they are paying more than they should. One example that was provided in the article was that of a medication for asthma—a condition well over half-a-million people in Illinois suffer from. The AWP price was $14.99, providers could obtain it for $4.05—nearly a 300 percent mark-up—ensuring a substantial profit at taxpayer cost. Madigan noted a Massachusetts example as well where the mark-up for a medication was 54,199 percent. Her lawsuit also claims that providers received secret discounts and rebates in many cases and that various unethical marketing schemes and confidentiality agreements boosted profits to providers.
In 2006, ConsumerAffairs.com noted a study done by Consumers Union where they checked the price of six common prescription drugs and compared the price at 261 retail pharmacies in Broward County (Florida) with the Medicare Part D “full-cost” price by the 44 insurance plans in that county. They compared the results with what the VA pays. The results were that 80 percent of the time the lowest cost for each drug was to be found at the pharmacy over the Part D price—but the patient had to shop around to find the best savings, otherwise the Part D averages were better. Note that this was before Wal-Mart introduced $4 prices on many generic prescriptions. However, the VA, which is allowed to negotiate for the lowest price did much better. In the study, the Part D price was $48.38, the average retail price (not going with the least expensive pharmacy) was $55.86, but the VA price for the same drugs was $22.06 (“Report: Shopping Around Beats Medicare Drug Prices,” 11 October 2006). Clearly the advantage of negotiating a lower price for a medication is one which government programs such as Medicare and Medicaid should be taking full advantage of.”
–Cassandra Nathan’s Save America, Save the World, pp. 155-157

Hospitals are frequently taking advantage of the public:

“Hospital care accounts for around one-third of the cost of health care in the U.S. (“Health Care Costs Analyzed,” Maine Nurse, August-October 2004). In 2002, nonprofit hospitals received $12.6 billion in tax exemptions stated the Congressional Budget Office. More than $3 billion was saved in property taxes. The IRS does not require a specific amount of charity care or community benefits to qualify for nonprofit status (Boulton, “Tax Status of health systems faces scrutiny: Communities question non-profit designation,” 11 March 2007, nonprofithealthcare.org). Charity Navigator web site reported in 2005 that the Illinois Attorney General, Lisa Madigan, wanted to require that nonprofit hospitals do nonprofit work. Because they are exempt from income and property taxes, Madigan wanted to require them to spend 8 percent or more of their annual operating costs on charity care. She said that in Illinois, currently they’re spending less than 1 percent on charity care (Stamp, “What’s Wrong With Charities in America?,” 5 April 2006, charitynavigator.org).”
–Nathan’s book, pp. 139-140

Also:
“In 1998, the CAGW (Citizens Against Government Waste) wrote a disheartening report on nonprofit hospitals indicating most were not worth the taxes they were exempted from. It was called Are You Getting Your Money’s Worth from Non-Profit Hospitals? In 2006, they revisited the issue and noted that nothing really had changed. One example in the short update (Wright, “Nonprofit Hospitals Still Abusing Tax-Exempt Status,” 26 July 2006) noted that one “nonprofit” hospital had charged a low-income, uninsured woman $20,296 for a procedure that Medicare would pay $3,994 to perform. The report urges government and taxpayers to look at the community benefits provided by nonprofits in light of what they receive (the massive tax breaks) and what they pay their people (benefits included) and the surpluses they run, as well as their billing practices.”
–Nathan’s book, pp. 142-143

There’s more, but the point is this, so long as these people (big pharma, hospitals) can just pull numbers out of the air as they currently do, they can claim anything they like with NO substantiation whatsoever. THAT is part of the problem in the country. Because we lack price transparency, we can’t compare prices accurately. Because about 70% of the care provided is paid for by a third-party, we can’t get an accurate. (Insurers get massive, unwarranted, and untaxed discounts) and whose price are you going to use? Medicare’s price? Medicaid? What’s given to United Health? The bill to the uninsured?

Oh and read this scary thing about another deal health insurers get:
ftc.gov/os/comments/healthcarecomments/meidinger.htm
is the source. Please note that is a GOVERNMENT site so they were happy enough to get testimony from the man, so he’s got some credentials:

Meidinger stated that “cash-paying” consumers pay 3-4 times as much for identical services as those with some manner of insurance.

They are billed under the “accrual accounting system” where the amount billed is the income for the facility (the amount due).

Health insurers, however, get a REDUCED CHARGE and the hospital “writes difference off to an adjusting account called Third Party Contract Adjustment.” He states that this is a “false accounting entry.” He says what would be accurate is “kickback given to Insurance Company for recommending its policyholders.”

Meidinger notes that a normal person or business would file a 1099C form for “forgiveness of debt” and he’d be taxed on that. This is not done with insurers (which helps explain why they rake in massive profits).

There are certainly doctors who go bankrupt. There are facilities bankrupted by insane governmental policies, such as “compassionate entry” whereby the US Border Patrol is instructed to let the ill enter the US for FREE to them, expensive to us, medical care.

“Dickson emphasizes that not all the free care is going to illegal aliens passing through on their way to other states. About half goes to Mexicans who use the Copper Queen as their personal emergency-care facility. In effect, the hospital, which performs general surgery, has become the trauma center for that stretch of northern Mexico. If an ambulance pulls up to the border-crossing point near Bisbee and announces “compassionate entry,” the border patrol waves it through, and the Copper Queen is compelled to treat the patient. It is one more program that Congress mandates but does not pay for. “If you make me treat someone,” says Dickson, “then you need to pay me. You can’t have unfunded mandates in a small hospital.” Although the Medicare drug act that passed last year provides for modest payments to hospitals that treat illegal aliens, Dickson says there is a catch that the U.S. Government has yet to figure out. “How do I document an undocumented alien? How am I going to prove I rendered that care? They have no Social Security number, no driver’s license.'”

http://www.time.com/time/magazine/article/0,9171,995145-7,00.html

So the universal health care crowd doesn’t get the point: it’s a combination of government interference and large insurers who cause the problems. Otherwise, LASIK and plastic surgery would be as ridiculously priced as a life-saving appendectomy is to an uninsured person. We would also lack cases such as:

http://www.simplecare.com/

http://www.azcentral.com/community/gilbert/articles/0217er17.html

and more.

You have to ask yourself: why can an uninsured person walk into a Wal-Mart with an upper respiratory infection, get treated in a short space of time, and walk out with prescription filled for likely under $100 when you can’t hit a doctor’s office or an ER for that price–and that doesn’t include the medicine?

Answer: the typical doctor is forced to jump through the hoops of the insurance companies which drive up his costs. ERs are trying to make up their losses from unfunded idiocy like “compassionate care” and ridiculous discounts to rich insurers on the backs of the uninsured. An URI does NOT need to be seen in an ER, but neither do “stubbed toes” and “poison ivy” as is done frequently where illegals rule the roost. The GOVERNMENT created a stupid, indefensible position where an illegal can go to an ER for what is a MINOR medical problem, waste resources, and skip out for free OR he could go to a doctor, urgent care center, or walk-in clinic and pay $100. Which is he going to choose: free or $100? Which oh which is he going to choose, Uncle Sam? He clearly chooses FREE to him and probably close to a grand billed to the taxpayer.
(Oh and lest the uninformed claim the “poison ivy” story is false:
Reed, “The Uninsured: A health care crisis,” 10 June 2007, news-press.com. Visitors to the ER that were treated included people with:
“toothaches, stubbed toes, rashes, chest pain, nosebleed, itchy eye, headache, poison ivy, cuts, anxiety, and a broken ankle.”)

Sandy asks…

How can I get affordable health insurance for my husband and I in the state of Florida?

I am a healthy 23 yr. old and my husband is a stable 32 yr. old.

Sarah Fields answers:

Ultimately, you are the one who determines the affordability of your health insurance plan by deciding how much you will participate in sharing the cost of your health care with your insurance company.

If you choose a plan that covers everything i.e. Doctors office visits, prescription drugs, preventative health benefits, maternity coverage as well as low deductibles and low copays your monthly premiums will be significant.

On the other hand you and your husband are young and presumably healthy and if you rarely use the health care system you could consider a plan that covers only the major health catastrophe which will result in a relatively low monthly premium. You then can use the monthly premium savings to pay for the occasional doctor visit and still come out ahead.

You need a trusted adviser to help you through the process of purchasing health insurance so that you understand what you are purchasing. That adviser can answer questions as to what is and is not covered by the policy, explain deductibles and copays and show you the hospitals and doctors that participate in the network. Check with the agent that writes your home or auto insurance he/she can provide you a health insurance proposal that takes into account your budget and health situation.

Some may suggest going on line to get a quote but you probably already know that there is much more to health insurance than price. Some might even “pitch” a discount plan that is not insurance at all. Use the Internet to educate yourself but use an agent to purchase the coverage.

Joseph asks…

Is it beneficial to open IRA early in my situation?

I graduated last year and started full-time job. My employer does not offer me 401k for the first year and it may take longer for me to qualify should I change job.

I got some credit card debt to take care off, around $2000 I acquired from college (no part-time job last year, and living expenses + books). I pay around $300 each month for cc and don’t make there any more purchases.

Then I set up online regular savings account (1%) where I put off $200 monthly for a pleasure in the next month (few days vacation in Florida).

I also set up Health Savings Account (since I have high deducible health insurance through my employer) and anticipate medical expenses for diagnosis. It may cost me $2000 just to do MRI heart scan but its important and hell no way my cardiologist did want me to do this if she thought if it was optional.

I also got student loan to pay off and need to pay off some soon, so I make more than minimum required.

I make 42000 a year, have $70,000 ($22,000 of that federal) student loan debt and $2000 in credit cards. I only chose graduate plan and pay only minimum for federal loan, since I am not worried to much about it.

Then it comes to IRA. I would prefer to start investing early, but I can’t afford to make maximum contribution ($5000) yet, I think. But I would set up traditional IRA to take advantage of tax deductible and credits. Once I get 401k can I rollover my money from IRA? Or perhaps roth IRA is a better option?

P.S. My family, parents pressure me to buy new car (since my old may break sometimes) but I want to do medical tests first. Its sad that my family including mom has reverse priorities. IT was same in college when I wanted to get a better health insurance through my school (and did not make enough money from my part-time job) for chiropractic (to work on my posture) but she refused and later used that money to purchase new furniture for my room :(
For now I live at home, but I plan in few years to move out. I don’t want to get stuck with my parents for too long.

Sarah Fields answers:

I really respect that you got through college on your own. That being said, you have some work to do. First and foremost pay the 2,000 in credit card debt. Divert all possible funds and pay that off as quickly as possible. There are multiple reasons for this that I dont want to go into. Next is the loans. The amount you wish to pay on those loans is your decision that you can base off the interest rates that you are paying. Next is the IRA. DO NOT DO A REGULAR IRA AT THIS TIME IN YOUR LIFE. The smartest thing for you to do is a roth IRA. Here is why… For a regular IRA you cant access the funds that you deposit until you are 59.5, for the roth you can access the money you put in at any time just not the earnings on the money. You discussed tax benefits for the IRA. Yes its true that an IRA is tax deferred but that means you have to pay the taxes later. The money you put in a roth IRA is after taxes. This is better for you because youre in a low tax bracket right now. For the regular IRA you will have to pay taxes on whatever tax bracket youre in at age 59.5 which could be alot more! Finally, push off the car as long as possible and when you do buy a car it better be a used car.
If you have any other questions feel free to ask me.

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