Let's get "personal" about healthcare reform

Healthcare reform is big news, but lt's face it--you and I have very little direct influence over what actually happens in Washington, D.C.. Sure, we can write letters to Congress and to the editors of our local newspapers. We can take part in town hall meetings. We can even call into talk radio programs and rally on street corners. Yet in the grand scheme of things, our individual voices are like small drops in an ocean of voices trying to be heard in the great healthcare debate. So while we should definitely keep doing all we can to get our leaders to make wise choices, I would like to propose more direct action. In contrast to the "public option" being discussed in Washington, I think it's time we get personal--very personal. Here's what I suggest:

1. Take more responsibility for your personal wellness.

Wellness is defined as a holistic regard for our own well-being. The National Wellness Institute, located at the University of Wisconsin at Stevens Point, identifies six dimensions of a complete personal wellness program. If you and I took greater responsibility of each of these dimensions in our lives, we would generally be happier and healthier people.

When it comes right down to it, we Americans have become a pretty sloppy, sedentary bunch. We know we should exercise more and eat better, yet we continue to rationalize unhealthy lifestyles. If you want to see a generally entertaining, though at times repulsive documentary on this, check out Morgan Spurlock's Super Size Me. (If you can find it, rent the "educationally enhanced" version to avoid some unnecessary and thoroughly unappealing discussions about Morgan's sex life.)

Healthy living isn't rocket science. It's the same stuff our mothers used to nag us about when we were kids: got to bed on time, get some exercise, eat your vegetables, play nice, go to church, do your homework, etc. Do you see how we could clear up a lot of our expensive long term health issues if we would each decide to live more healthful lives? No matter how well-intended, Obama-care just can't touch that.

2. Take ownership of your medical decisions.

I'm a big believer in high deductible health plans. With a high deductible health plan I pay for all my medical care up to a certain dollar amount. Once my medical bills cross that threshold (the "deductible"), my insurance coverage kicks in. This means that I cover the small stuff and insurance backstops me for the big things. This is the way insurance is supposed to work, right?

The economic beauty of a high deductible plan is that it makes me very aware of the cost of my choices. If I'm paying the bill, I tend weigh much more carefully whether I really need to visit the doctor for a cold or the seasonal flu. In short, I become the owner of that decision. The really cool thing about high deductible health plans is that they cost about half the cost of low deductible health plans.

As I shopped for health insurance for my family, I discovered that the annual cost for high deductible health insurance PLUS the annual deductible was about the same as the total annual premium for a traditional health plan. This means that in bad years (i.e., years when I have a lot of medical costs and therefore pay my entire deductible), my total out-of-pocket cost is about the same as a low deductible policy holder pays every year, but in good years, my overall payout is a lot less. I don't see the downside.

3. Get a health savings account.

Health savings accounts (HSA's) are one of the best healthcare deals in the cosmos. HSA's allow families to put away $5,950 every year into a tax-deferred investment account. (Individuals can contribute ($3,000). You get a tax deduction equal to the amount of your contribution. As long as the money is used for qualified medical expenses (and almost any reasonable health-related expense qualifies) the money comes out tax-free.  In essence you get to pay yourself and get a tax deduction. Like I said, it's a great deal, but there are some wrinkles:

  • Your health plan determines if you are eligible for an HSA.
  • To qualify, you must be insured under a high deductible health plan.
  • Individuals must have a minimum deductible of $1,150 and families must have a deductible of at least $2,300.
  • Individuals and families who are covered by other health plans cannot participate.
  • Individual covered by Medicare or who are active military (covered by Tricare) cannot participate.

If you want more information on HSA's or if you want to see a side-by-side comparison of various HSA plans, check out HSA Insights.

4. Look for deals on generic drugs.

Prescription drugs are like many other consumer goods--you can pay up for brand names or you can buy a non-branded generic version for a lot less. Generic drugs are guaranteed to be chemically identical to the name-brand version. They aren't simply look-alikes. Generics are literally the real deal.

Generic drugs cost a lot less than the branded version. A 2008 study published by the Kaiser Family Foundation found that the average name band prescription cost $119.51 -- nearly 3 1/2 times the average generic prescription ($34.34). The generic version of a drug is only available after a drug comes off patent, so newer drugs probably don't have generics available. But when they are, you can save a ton of money.

You should be aware that doctors often write prescriptions for the name brand version of a drug even when a generic exists. I don't know why this is--maybe they just have a hard time keeping up with which drugs come off patent. Pharmacists have the authority to switch for the generic version, so ask the pharmacist if a generic version of a drug is available before you get your prescription filled.

5. Negotiate with your doctor.

Cash talks--even to doctors. If you are on a high deductible health plan, you will probably be paying cash for many of your basic medical costs. Don't underestimate the power of cash when you seek medical services. Most doctors will tell you they write off tens of thousand of dollars worth of uncollectible billings every year. If you pay cash up front, you do them a favor. You reduce their risk of getting paid and you reduce their cost of processing insurance claims. Many doctors will recognize the benefit and give you a break.

I had an experience with this a couple of years ago. I'm generally a pretty healthy guy so I didn't have a regular doctor. When I picked up a sinus infection, I went to the local clinic. The doctor quickly examined me and wrote me a prescription for an antibiotic. In the process he asked about my insurance and I told him I was paying cash (my deductible is about $4,000). He cut me a deal on the consultation fee and sent me home with a bag of samples for the antibiotic he prescribed. The entire visit, including medication, cost about $80. Had the billing gone through normal insurance channels it would have cost at least twice that amount.

Conclusion

If your family is like mine, the cost of medical care is a real concern. Clearly some kind of healthcare reform is needed to reduce costs and make things more efficient. But though I feel passionately about it, I recognize that my ability to influence the debate in Washington is very small. On the other hand, I have much greater control over how I use the healthcare system. So maybe that's the best place to start. Maybe the healthcare reforms that matter most are our personal healthcare reforms.