Katherine Woodfield on #HCR
Hosted by Sean McGuire
7- 20-13 Transcript of Katherine Woodfield on the Sean McGuire Radio Show
Sean: Joining me this segment, author of "Don't Buy THAT Health Insurance: Become an Educated Healthcare Consumer", Katherine Woodfield. How're you doing? Welcome back to the show.
Katherine: Thanks Sean. I'm enjoying it.
Sean: Good, so let's talk about, we had a discussion this week about how we stack up to other nations and if you've ever read, had the opportunity to read, T. R. Reid's book called, "The Healing of America," Have you read that?
Katherine: I haven't. But I spent a lot of time working with the World Health Organization and I pull a lot of fascinating data off of that, out of that database.
Sean: And what do you find? We're not doing too good, are we?
Katherine: Since 200,0 the World Health Organization did an analysis of all the developed nations in terms of not just access to healthcare, but also affordability of healthcare and how healthcare was delivered and the United States ranked 37th in the world in terms of access to healthcare and affordability of healthcare. A lot of people argued about the parameters that were used, so in 2010 the World Health Organization again did an analysis comparing how the overall health is of a Nation's population and the degree to which both the economically advantaged and the disadvantaged had access to healthcare and how healthy they were and what they realized out of the 11 nations that were evaluated, is that once again, the United States came in 11th on every single parameter. In fact, we spend the most money in every healthcare parameter that was analyzed and we have the worst outcomes in every healthcare parameter that was analyzed.
Sean: You mention access and affordability and I question whether or not that's going to be solved by this law. What do you think? Because, I mean, I think access is going to be harder to get for some.
Katherine: I think there'll be bubble where people who buy into the healthcare system and haven't used healthcare, you know, haven't had formal access to healthcare for 7 or 8 years or for a window of time and their knees have been bothering them or their shoulders have been bothering them, I think there'll be a bubble where there is increased usage. But also the way this law is designed, consumers have more skin in the game. There's going to be more higher deductibles on all of us, so we're going to be thinking about how we spend our money because it is our money and we're going to be thinking about, do I want to pay $35 to go to a walk-in care facility to get what I know is my daughter's ear infection diagnosed and a prescription through like a walk in pharmacy that has a nurse practitioner in it, or do I want to spend $75 and go to my pediatrician to get the exact same prescription. It's my money. So we're going to start approaching our healthcare choices a little bit differently as well. So I do think there will be a bubble of increased usage, but I think the bubble will sort itself out within a few months.
Sean: Yeah, I think carriers are probably budgeting for that as well, at least for the first few months of the year.
Katherine: Yes, it's going to be a little…If you know you need to have knee surgery, I wouldn't wait until January. It's going to be a little busy in January.
Sean: No and I think that's where the private marketplace is going to have to, through innovative means, come up with ways to handle this problem, whether it be direct primary care which is kind of a neat kind of concept or concierge medicine, things like that.
Katherine: You know, it may be that for a few months that the insurance companies are out of pocket a little bit. I spend a fair amount of time having expenses that need to be paid before the money is earned, too. I think the insurance companies, with all of their employees and with all of their fancy degrees, will be able to figure out how to manage this. I'm not going to worry about them until they come to the Federal government asking for a bail out.
Sean: Do you think healthcare could bankrupt our country like Detroit?
Katherine: Nope. Not at all. Detroit isn't being bankrupted by the healthcare - it's being bankrupted by the promises that it made to its employees and the juxtaposition of the fact that so many companies have left that city that there isn't enough income to honor the promises made to retirees; that it's not a healthcare issue. I really do not think that that is the case. I mean, I'm not an expert. You know, I look at other counties, like Australia. Australia ranks number 17 in the world and they have a dual system of public and private health insurance. The wealthier individuals are encouraged to use the private system. If they choose to use the public system, a 1% penalty is imposed upon them. Another country, Germany, has the world's oldest universal healthcare system and 90% of the citizens use the public system. Only 10% of the Germans use the private healthcare system, so they've figured out how to make this work and their economy is definitely a benchmark economy.
Sean: Yeah, but the thing is their economy is like the size of our states. That's why it is so hard for us to compare against others.
Katherine: Well, the United States does have unique situations and unique problems, but what we have, what I look at 10 different developed nations, we have the systems that Belgium, they have mandatory mixed public and private healthcare systems. Switzerland has mandatory, every citizen has to buy a form of health insurance. The Netherlands- mandatory insurance. Japan- mandatory insurance. So we're not doing anything that isn't done in the developed world. What I feel is that a bit of a shame is that we have all of these operating systems that are ranked, I mean Switzerland is ranked number 2 and Japan is ranked 13th. We have all of these perfectly good examples to learn from; to evaluate; to study, and then our system is broken, but it is not broken because we are trying to bring our healthcare up to a level equal to the rest of the developed world. Our system is broken because our Congress cannot agree on whether or not they should be in the same room. Just because a bill comes thru the Senate it has to be stopped by the House. That's the part of the system that is broken.
Sean: Do you know what the House calls the Senate? The place where all good things go to die.
Katherine: That's it. I mean, that's the part that's really broken in my mind. Bringing our healthcare, bringing access to healthcare to the population is the responsibility of a civilized nation.
Sean: Well I think it's also the responsibility of individuals to educate themselves and become, you know, more informed on this issue. What are a couple things that you think a consumer needs to know going into 2014, Katherine?
Katherine: So the first thing I think a consumer needs to know is that, don't fall for the bells and whistles. Bells and whistles, low co-pays, are going to cost you more in the long run. Your number one thing to shop for is a low out of pocket premium, because no matter what you are going to pay that premium every single month and you want to keep that number as low as possible. The second thing you want to look for is your maximum out of pocket exposure and that number is sometimes hard to find in the policies. Hopefully it will be more easy to find in new standardized polices
Sean: So the deductible plus the copays, right?
Katherine: So right, it's the deductible and then the deductible, like with car insurance, is the first money spent. And then the next money spent is usually, if you have a $2,000 deductible, it's usually another $2,000 that you contribute by co pays and prescription refills and that sort of thing. You want to keep your maximum out of pocket as low as possible. So, for an individual, I think the law says $4,000 is your maximum out of pocket within the healthcare exchange and for a family which is two heads of household or greater, it is double that, so it's a $4,000 deductible, because it's two people, and a maximum $8,000 out of pocket. So, $8,000 hurts a family, but it won't bankrupt them. So if you're diagnosed with cancer and the law says it's an uncapped amount, so you can you incur $2 million, $3 million, or $4 million worth of expenses, what is your maximum responsibility to managing your medical expenses? And that's the number you want to keep as low as possible. You want your premium as low as possible and you want to keep that maximum exposure, that maximum out of pocket, as low as possible. Those two numbers are the most important numbers in your plan. After that, you want to choose the plan that gives you access to a high deductible savings account. It has to be qualified and it has to give you the key that unlocks your access to a special pre-tax savings account so that when you are spending money visiting doctors and dentists and so forth you have access to pre-tax dollars.
Sean: Yeah, we need to improve upon that, I think.
Sean: HSAs getting more people the opportunity to use pre-tax dollars to pay for medical expenses.
Katherine: You are absolutely right. The plans that are sold that do not have access to HSAs, means that they have a high deductible but they don't have HSAs, that means that they don't comply with the Federal guidelines, (saying) you have to cover this and you can't cover that. An HSA is kind of like, the closest of qualified plans. A plan that is qualified for HSAs has met certain government requirements, so those three letters let you know the government has set minimums and specific standards and that insurance plan meets those minimums and those specific standards.
Sean: Final question, Katherine. You work with small businesses out there. What is one thing small businesses need to know and need to be doing to prepare?
Katherine: If you have low wage employees, if you have people who earn and hourly wage of $11.00 or $12.00, if you are a small business with low wages, you need to give your employees access and encourage them to get to these exchanges. Because the federal exchanges are going to give these people subsidy and access to healthcare and anybody who is on the federal exchange is a valid waiver, so next year when the mandatory employer plan comes into effect, all those low wage people will be off of your census. So you want to make sure if you are an employer who is looking down the pike at possibly having to offer healthcare and you don't (offer health insurance) now, you want to be sure you encourage and give your employees tools, bring people in to your place of business, so that you can get your employees access to the healthcare they have a right to under this law.
Sean: That's premium information on America's Healthcare Challenge. Katherine Woodfield, thank you for joining us.
Katherine: It's always a pleasure, Sean. Have a wonderful day!