Health Care

Being prepared and keeping good records can protect you from damage to your credit score.

Over Labor Day weekend, I fell and broke my hand. Seeing my finger dangling at an odd angle was alarming, not to mention painful, but I’ll confess the first words out of my mouth when I arrived at the ER were, “I want to confirm that you are a participating provider in my insurance.”

I have decent health insurance, but I’ll admit I border on paranoid when it comes to medical bills. I have heard numerous horror stories on the Credit.com blog from consumers whose medical bill nightmares have ruined their credit, often through no fault of their own. In fact, about half of all collection accounts on credit reports are due to medical bills, and medical debt often has a significant impact on credit scores.

I wasn’t about to take that chance.

3 Things I Did to Protect Myself

Sure enough, a few weeks later bills started rolling in from various providers. Although I spent only a few hours in the emergency room, I received bills from five different providers. And that doesn’t count the doctor and physical therapy bills from the services provided later.

Worse, the largest bill — the one from the ER — did not arrive until two months after my visit and after a lot of effort to hunt it down.

Although I was hampered by having my right hand in a cast (not ideal for a right-handed writer!) I was determined to stay on top of the bills as best as I could. I did three things:

1. I reviewed my Explanations of Benefits from my insurance company online as they came in. EOBs explain which companies have billed the insurance company and how much the patient is responsible for.
2. I did not assume that because I didn’t get a bill, all was OK. Three weeks after my visit to the emergency room, I still hadn’t heard a word from them. The EOB for the hospital visit was listed as “pending.” So I called the ER billing department to find out what was going on. They assured me it was in process.
3. I kept good records. I started a file where I kept copies of bills, notes from phone calls, receipts etc.

Nevertheless, despite my careful efforts, I suspect I narrowly averted a potential disaster with the ER bill. Fifty-two days after the ER billed my insurance company, the claim was processed. But a week later, I still hadn’t received a bill. I called the ER’s billing department (it was surprisingly difficult to find the right phone number without a bill) and they could not find me in their system. They asked me to fax the EOB to them, which I did. Two days later I called again, and my bill couldn’t be located. I sent the EOB to them again, this time by email, and finally, that afternoon, I was told that they found my account and a bill was on its way.

Although it would have been nice to not have to pay for that visit, I know better. Even if they never sent me a bill, there was a distinct possibility I could hear from a collection agency down the road.

Medical Billing Frustration

The experience still leaves me with a bad taste. Our medical billing system is far too complicated and convoluted. For all the talk of putting patients more in charge of their care, there is little opportunity to make informed decisions. One of the main things that irked me was my complete inability to confirm whether I received the services my insurance company and I paid for.

I was billed, and paid separately, for the doctor, the X-rays, a sling and a splint. That didn’t leave a whole lot besides the painkiller and warm blanket the nurse gave me when I started shivering. Yet the ER bill alone — not counting all those other services billed separately — totaled nearly $3,000. I requested an itemized statement of charges, but it was incomprehensible. For example, there are two charges of $264 each for “3 MCLSD TX FX PHALENGEAL W/M.” What the heck is that? I haven’t a clue.

Fortunately, insurance discounted the total significantly, but still, between my insurance company’s payment and mine, we did pay a large chunk of change and I’d like to know it’s accurate. I understand the ER must be prepared to treat all kinds of emergencies, and perhaps this is a toll to get through the door, but it is still hard to fathom how the bill can be that large. (Note: I know where the urgent care facilities in my area are and would have chosen one of them for less expensive care if the accident didn’t occur late on a Sunday evening.)

Besides the ER bill, some bills were mysterious, and I could not find anyone to explain them to me. For example, I received two separate bills for what appeared to be the splint provided in the ER (the same one my doctor later told me was a piece of junk and advised me not to use). When I tried to clarify it, I was bounced back and forth between the two companies. In frustration, I paid the bills to protect my credit.

I had no way of knowing — and still don’t — which companies would be billing me for what. I know I have paid all the bills that were submitted to insurance, but if there are others floating out there, I can only hope they reach me. That’s one reason why I use free credit monitoring tools to keep close tabs on my credit. If a bill does slip through the cracks and wind up in collections, I want to know about it right away. You can check your credit scores for free every month on Credit.com too.

In a month I was out of my cast and on to physical therapy. My hand will probably never be quite the same, but I consider myself lucky when I think of what patients and their families must go through when they are dealing with serious extended illnesses or accidents. How do they stay on top of all of this?

Given that a single collection account can drop your credit scores by 50, 75 or even 100 points, it’s worth trying to make the effort to get organized, stay organized and ask lots of questions. If you can’t handle it yourself, consider asking a trusted friend or relative to help, or consider hiring a patient billing advocate. Doing so may just save your credit.

Inset image courtesy of Gerri Detweiler

More from Credit.com

• How Medical Debt Can Hurt Your Credit
• 10 Tips for Negotiating With Debt Collectors
• The Lifetime Cost of Debt Calculator

This article originally appeared on Credit.com.

Health insurance plans are hitting you with higher out-of-pocket costs for the specialty drugs you may need, a new study finds.

Americans with health coverage–including those who buy it through government insurance exchanges and Medicare beneficiaries–are likely to pay more out-of-pocket next year for so-called “specialty drugs,” which treat complex conditions, according to two studies from consulting firm Avalere Health.

More than half of the “bronze” plans now being sold to individuals through federal and state marketplaces for coverage that begins in January, for example, require payments of 30% or more of the cost of such drugs, Avalere said in a report out Tuesday. That’s up from 38% of bronze plans this year.

In “silver” level plans, the most commonly purchased exchange plans, 41% will require payments of 30% or more for specialty drugs, up from 27% in 2014.

As the cost of prescription medications rise, insurers are responding by requiring patients to pay a percentage of specialty drug costs, rather than a flat dollar amount, which is often far less. Insurers say the move helps slow premium increases.

But “in some cases this could make it difficult for patients to afford and stay on medications,” Avalere CEO Dan Mendelson said in a written statement.

While there is no standard definition of such drugs outside of the Medicare program, they are often expensive medications used to treat serious, chronic illnesses, such as multiple sclerosis, rheumatoid arthritis, hemophilia, some cancers and hepatitis C. While lists of specialty drugs can differ by insurer and by policy type, drugs can include arthritis treatments Enbrel and Humira, cancer drugs Gleevec and Tarceva, hepatitis C treatment Sovaldi, and MS drugs, Betaseron and Copaxone.

While they add up to only about 1% of all prescriptions written, specialty drugs account for 25% of spending on all drugs—an amount expected to rise rapidly, according to various studies.

An earlier Avalere analysis found that for the first time since Medicare’s drug program began in 2006, all of the stand-alone drug insurance plans place some drugs into specialty “tiers.” Two thirds of those plans require patients to pay a percentage of the costs of drugs in those tiers, rather than a flat dollar payment. Medicare plans can place a product into a specialty category only if the price negotiated with the drugmaker exceeds $600 a month.

Increasingly, health plans –including those offered to people with job-based coverage – require hefty payments, sometimes 20% to 40% or more of the total cost of medications that insurers classify as specialty drugs. That’s a change from the flat dollar payments of $10 to $30 or $50 that many patients have become accustomed to for other types of drugs.

There is a limit to how much patients must pay, but it’s often high: Most policies have an annual out of pocket maximum, which is often several thousand dollars.

The new Avalere study looked at plans sold in the federal exchange and in New York and California, which run their own marketplaces.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente. This article was produced by Kaiser Health News with support from The SCAN Foundation.

Employers are increasingly turning to wellness programs to keep workers healthy. But a new lawsuit is challenging whether your boss can force you to get medical tests—or pay more for your health insurance.

Do it or else. Increasingly, that’s the approach taken by employers who are offering financial incentives for workers to take part in wellness programs that incorporate screenings that measure blood pressure, cholesterol, and body mass index, among other things.

The controversial programs are under fire from the Equal Employment Opportunity Commission, which filed suit against Honeywell International in October charging, among other things, that the company’s wellness program isn’t voluntary. It’s the third lawsuit filed by the EEOC in 2014 that takes aim at wellness programs, and it highlights a lack of clarity in the standards these programs must meet in order to comply with both the 2010 health law and the landmark Americans with Disabilities Act.

Honeywell, based in Morristown, N.J., recently got a reprieve when a federal district court judge declined to issue a temporary restraining order preventing the company from proceeding with its wellness program incentives next year. But the issue is far from resolved, and the EEOC is continuing its investigations. Meanwhile, business leaders are criticizing the EEOC action, including a recent letter from the Business Roundtable to administration officials expressing “strong disappointment” in the agency’s actions.

In the Honeywell wellness program, employees and their spouses are asked to get blood drawn to test their cholesterol, glucose, and nicotine use, as well as have their body mass index and blood pressure measured. If an employee refuses, he’s subject to a $500 surcharge on health insurance and could lose up to $1,500 in Honeywell contributions to his health savings account. He and his spouse are also each subject to a $1,000 tobacco surcharge. That means the worker and his spouse could face a combined $4,000 in potential financial penalties.

“Under the [Americans with Disabilities Act], medical testing of this nature has to be voluntary,” the EEOC said in a press release announcing its request for an injunction. “The employer cannot require it or penalize employees who decide not to go through with it.”

Honeywell sees the situation differently. “Wellness is a win-win,” says Kevin Covert, vice president and deputy general counsel for human resources at Honeywell. In time, the company expects to see lower claims costs while workers avoid health problems. Sixty-one percent of employees who participated in the company’s screening last year reduced at least one health risk, he says.

Further, Covert says, it’s easy for employees and their spouses to avoid the tobacco surcharge. Smokers can take a 15-minute online tobacco cessation course, while non-smokers can simply call up the health plan and certify that they don’t smoke.

“The way they described the program was quite hyperbolic,” Covert says.

Employers are watching the Honeywell case closely because many have similar incentive-based wellness plans, says Seth Perretta, a partner at Groom Law Group, a Washington, D.C., firm specializing in employee benefits.

Eighty-eight percent of employers with 500 workers or more offer some sort of wellness program, according to a 2014 national survey of employer-sponsored health plans by the benefits consultant Mercer. Of those, 42% offer employee incentives to undergo biometric screening, and 23% tie incentives to actual results, such as reaching or making progress toward blood pressure or BMI targets.

Despite employers’ enthusiasm for wellness programs, “there’s no good research that shows these programs actually improve health outcomes or lower employer costs,” says JoAnn Volk, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms.

The health law encourages employers to offer workers financial incentives to participate in wellness programs. It allows plans to incorporate wellness incentives — both penalties and rewards — that can total up to 30% of the cost of employee-only coverage, an increase over the previous limit of 20%. If the wellness activity aims to help someone reduce or quit smoking, the incentive can be even higher, up to 50% of the plan’s cost.

Under the ADA, employers aren’t allowed to discriminate against workers based on health status. They can, however, ask workers for details about their health and conduct medical exams as part of a voluntary wellness program. What constitutes a voluntary wellness program under the law? Employers, patient advocates and policy experts want the EEOC to spell out what “voluntary” means under the ADA and clarify the relationship between the health law and the ADA with respect to wellness program financial incentives.

“The EEOC has chosen litigation over regulation,” says J.D. Piro, a senior vice president at Aon Hewitt, who leads the benefits consultant’s health law group.

The EEOC is always reviewing its guidance, but there’s no timeframe for issuing further guidance, says spokesperson Kimberly Smith-Brown.

Consumer advocates say it’s critical not to confuse incentive programs with comprehensive workplace wellness.

“The incentives are meant to engage employees,” says Laurie Whitsel, director of policy research at the American Heart Association, “but they’re not the comprehensive programming we’d like to see employers offer.” It’s really important to have a culture of health, Whitsel says, including an environment that supports a healthy workplace, from a smoke-free work environment to healthy food in the cafeteria.

Patient advocates voice another concern: That wellness program financial penalties may be so onerous they actually limit people’s access to the medications and primary and preventive care they need to get and stay healthy.

“When penalties become that high, it really is a deterrent to affordable, quality health care,” says Whitsel.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

More insured Americans are skipping out on health treatments that they need because of cost, a new Gallup poll finds.

The Affordable Care Act kicked into gear over a year ago. And more than 86% of Americans now have health insurance, up from 82% in mid-2013.

Even so, according to a new Gallup poll, a third of Americans say they aren’t getting the medical care they need because of cost.

In fact, more Americans are putting off medical care than ever before in the 14-year history of the poll.

Uninsured Americans aren’t the only ones delaying medical treatment. Some 34% of Americans with private health insurance say they’ve skipped out on care because it was too expensive, up from 25% last year. Additionally, 28% of households that earn $75,000 or more report that family members have delayed care, up from just 17% last year.

One likely culprit? Rising out-of-pocket costs. Americans who get healthcare coverage through their employers have seen deductibles more than double in the past eight years.

It’s part of a movement towards what’s come to be termed “consumer-driven health care.”

The thinking is, when patients are more aware of healthcare costs and more discerning about what care they really need, they will also be more discerning in their usage—which in theory would lower costs for everyone involved. Two-thirds of large employers think consumer-driven healthcare is one of the most effective tactics to reduce costs, according to the National Business Group on Health.

But Gallup found that more Americans are skimping on care that they think they really do need. According to the survey, 22% of Americans say they’ve put off treatment for a serious condition, vs. 19% last year. The percentage of Americans who say they put off care for a non-serious condition stayed flat at 11%.

Previous studies have found that when consumers are asked to share more of the costs, they put off both necessary and unnecessary care.

For example, one study found that people on high-deductible plans are less likely to buy expensive, brand-name drugs (which may be sensible), but they’re also less likely to buy generic drugs they need to treat chronic conditions (likely not sensible).

When forced to pay more out-of-pocket, men in particular are more likely to skip care for serious problems like irregular heartbeats and kidney stones.

What’s especially frightening about these findings is that delaying needed care to save money in the short term may result in more costly complications and more difficult-to- treat health issues in the longer term. Skipping the cholesterol screening now, for example, could mean racking up a $100,000 tab for a heart attack later.

Are you avoiding treatment you need because you’re afraid of the bill? Try these strategies to get the same healthcare for a quarter of the price. If you’re on a high-deductible plan, use your Health Savings Account to budget for your expected—and unexpected—costs.