Season 2, Episode 1
February 2, 2013
Hosted by Sean McGuire
Welcome to America’s Healthcare Challenge (all about Healthcare reform, aka Obamacare, Affordable Care Act-that’s the official name). The show focuses on informing the listener. I’ve read the entire law and it’s a monster of ambiguity, social security on steroids, in my point of view.
If you want to go to a thing called Health Insurance Exchange, which is a marketplace, it’s a clearing house for five agencies of government and the largest technology cost that’s non-defense related. It has 500 business processes. We need to be informed about this law because ultimately, it’s going to impact all of us. …
When you look at how this law is impacting small businesses, and it’s because it was jammed through the political process, without regular order, it is having adverse consequences on small and mid-sized businesses. They’re facing, a business of 100 people (to give you an example), is facing $140K in new taxes right now if they don’t provide health insurance. That’s kind of difficult for an industry like a restaurant and others. I don’t know if they can sell enough cheeseburgers to offset that cost.
Doctors are facing new changes in their reimbursement. Currently, they were paid on what’s called a “fee for service” system. So, for example, when you go to get a procedure at the hospital, like an endoscopy, which is where they stick a camera down your throat to see what’s going on (if you have heartburn or something, that would be a common procedure that one would order), there’s five charges right now for that particular procedure: 1 for the anesthesiologist who puts you down, 1 for the GI who does the procedure, 1 to the hospital, 1 for other stuff. So, it’s very inefficient right now. One-third of your healthcare dollar goes to administration. Have you ever gotten anything in the mail that says “this is not a bill”? Well, obviously that costs something and it doesn’t really improve your health. So, America needs to reform this. We can’t do it through a shotgun approach.
We really need to understand what it means, because it impacts all of us and it’s a very sensitive issue. If you were to ask yourself: “What are some things that you would do regardless of the cost?”, I believe one of those things is health. I think people would pay anything for their health.
Now, I founded E.D. Bellis. It’s a consulting company helping businesses and health care providers, giving them synthesized information about healthcare reform and ongoing government management. Now, we’ve only been able to scratch the surface with these regulations. But this issue is already beginning to hemorrhage, if it’s not already, soon. …
I will be providing the best and latest information about your government, as if you were a member of Congress – preparing members with information. I am here to serve you, help you understand the law, the Affordable Care Act, how it will impact you. I encourage your calls at any time. 800-577-1290
Healthreformexplained.com Twitter at America’s Canary. Facebook.com/Americashealthcarechallenge
Welcome back to America’s Healthcare Challenge. I’m Sean McGuire and for today’s show, I have two guests to help you understand the complex issues business owners, particularly those smaller and mid-sized firms, are facing right now due to this law.
Employers should align themselves with a quality broker – understand what applies to them, understand what it means to be a good healthcare consumer.
Did you know you can reduce your health insurance premiums and lower you medical expenses?
Millions benefit from advice from my next guest, my friend, Katherine Woodfield, America’s first healthcare consumer advocate. You want to talk about putting skin in the game. That’s how you bend costs here and Katherine, welcome to the program. How are you doing this morning?
Katherine: I’m doing great, Sean. How are you?
Sean: Good. Katherine, can you tell the listeners here out in the heartland a little bit about what you do, your background? And then, we’ll dive into some of these very interesting issues.
Katherine: Sure. I have a kind of unique background. I actually spent the first 20 years of my career working for major U.S. pharmaceutical companies, mostly in the area of medical oncology. However, while I was a Vice President at an Advertising agency in New York, working on early stage 1 and 2 pre-launch drug data, my husband grew ill and he ultimately passed away. What I learned from all of my experiences working with patients who were having trouble getting their medical bills paid and then having to basically file bankruptcy to protect my house against our medical bills, was that Americans really don’t understand how insurance works (what it’s meant to do), and I was one of them. So, what I’ve done is I’ve written this book. It’s called “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”. The basic philosophy is “fixed costs low”. We think if we spend more money on more health insurance premiums, when the big bills come in, more things will be paid, because that makes sense to us. But what I’ve really seen throughout my career is, keep your premiums as low as possible because you just never know what’s going to get paid and what’s not going to get paid.
Sean: So, talk a little bit more about that. Unpack this issue for the listeners a little bit more.
Katherine: I was listening to your previous caller and there was an issue about how much premiums would be. And what premiums really are, one of the things that is sort of the big ‘aha’ moment that I’ve spoken to a lot of people about - health insurance is a lot like being a member of a big buying club (e.g., Costco, Sam’s Club, BJ’s). So, when you join that club, or you buy your health insurance premium, you get access to agreed-upon, negotiated, discounted rates for goods and services, just like when you join Costco, you get discounted rates for goods and services. But at Costco, you expect to pay for them when you leave. With our healthcare, we expect someone else to pay for them. So what happens is, we pay a premium. The premium is the way that the insurance company collects the money up front and then they redistribute it, if and when we don’t use or we do use it. Anything we don’t use, they keep - that’s called profit. So, the best way to control costs is to work your insurance like you work your membership at any buying club -pay for what you use as you go. And that lingo is referred to as a deductible. Basically, if you cover the smaller items, like sinus infections and predictable prescriptions, and you use your insurance only for big problems, (like God forbid a hospital admission, a surgery), that’s where insurance will help you. The rest of it, you’re just giving money to Costco and you may or may not be getting it back out.
Sean: Wow, very interesting. We’re talking with Katherine Woodfield, the author of “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”. Katherine, I want you to stay with us. We want to bring in a caller who has a question about self-employment under the law - Ed. Good morning, how are you doing?
Ed: Great. My gross is about $36-40K a year and I have a wife, no dependents and I’m paying for my wife and her brother to go to school at the junior college. How do I go about finding an affordable insurance? My wife has a pre-existing condition. I haven’t bought insurance before because I don’t think it would be covered. Does this new law make it where they would cover the pre-existing condition? It’s a critical must. One eye, she already had a cornea rupture. Several years ago she had an emergency cornea transplant that she didn’t have to pay for because it was an emergency and we’re expecting the other cornea to rupture any time.
Sean: OK. Well, first of all I’ll comment on your question regarding guarantee issue or whether pre-existing conditions will be covered under the law. Yes, beginning in 2014, effective open enrollment this year, pre-existing conditions will be covered under the law. I would like to add Katherine and also Brian back to the conversation as thought leaders to help answer Ed’s question. Do either of you have any comments?
Brian: Ed, stay on the line after this– I’d like to get you a website. There is a bridge plan that the federal government has in place that is a pre-existing condition plan, so if there’s something good going on right there, I want to make sure you have that information right now.
When it comes to 2014, because your pay is under 400% of federal poverty level, you’re going to get a subsidy should you go under the exchange as a self-employed individual and if there are pre-existing conditions, you fall in one of the key areas of the law which is actually going to benefit you, because you’re going to be able to get that coverage for your wife with that condition and get a subsidy. So, that’s good news for you. Stay on the line and I’ll get you that website if you’d like it.
Sean: Katherine, anything to add?
Katherine: Yes, you know, a lot of people don’t realize that healthcare reform for most of us on the street, especially people who don’t earn more than $50,000a year, is a consumer protection law that provides you, when you have insurance, to preventative care before co-pays and deductibles and if you have trouble with bills, you can hire a third party administrator to argue. There are a lot of consumer protections within the body of healthcare reform. The big challenge for us is that, without people like Sean out there, there isn’t a voice for the average person to share that this is good for us. It’s going to be hard for some companies that have not offered health insurance and have their entire business structure based on no health insurance. But for guys on the street who have problems and medical conditions, this is really going to help you. It’s meant to protect you.
Sean: Ed, any follow up questions? Again, we’re talking with Katherine Woodfield, author of “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”.
Ed: Ok. No, I don’t have anything additional at this time. Thank you.
Sean: Ed, Keep the radio on. We’re looking up the website which is: pcip.gov. That’s the website that might be able to help you for your particular situation. Thank you for calling into America’s Healthcare Challenge. So, we are just beginning to scratch the surface at a shotgun approach to 1/6 of our economy. But we’re going to keep at it with Katherine Woodfield, the author of “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”, and the thought leader of the week, Brian Munderloh, from Garvey and Associates.
I’m Sean McGuire this is America’s Healthcare Challenge. Join the conversation now- 800-577-1290. We’ll be right back.
Sean: Welcome back to America’s Healthcare Challenge. I’m Sean McGuire. If you’re just joining us, set your calendars for every time for the rest of 2013, because we’re here when Obama said change is coming to America. That change is materializing right now. Now, it’s that time of the week -a regular bit in the show. The compliance tip of the week brought to you by Profit Advantage. Now, if you’re an employer who has less than 20 employees, you better listen up because if you offer health insurance, you’ll need to comply with Nebraska state continuation coverage law. State continuation coverage requires that if you terminate an employee who’s covered under your plan, you need to notify them of they have the right to 6 months of coverage if they pay the entire premium. You’ve got to notify them within 10 days of their termination date. Check with your office manager to make sure you’re aware of this requirement. If not, Profit Advantage can help – providing HR needs when you need to focus on your business.
Onward here on America’s Healthcare Challenge, with Katherine Woodfield, author of “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”, and Brian Munderloh, from Garvey and Associates. I am Sean McGuire here this morning on America’s Healthcare Challenge. Thank you for joining us. Answering questions like: “What happens to my private insurance beginning in 2014? Is the cost going to go up? Should I drop coverage? Are exchanges the right alternative? Talking all about these issues related to the Affordable Care Act. Again, I’ve got it -let me get it out for you. There it is and that doesn’t even include the regulations.
Katherine, let’s talk about consumer protection and in particular, this exercise that you do for your clients regarding pharmaceutical drugs and issues like that. Can you help us understand that and the difference between brand and generics?
Katherine: Sure, so this sort of taps into my 20 years of pharmaceutical history and basically, what a brand drug is – it is a recipe that is absolutely predictable time and time again. One of the ways I explain this to people when I’m speaking is, if you’re baking a cake and your cake requires two eggs, one stick of butter and a cup of flour. Well, eggs come in medium and small and butter can be salted or unsalted and a cup of flour can be bleached or unbleached flour. So, when a pharmaceutical company or a generic manufacturer is following the recipe, which they do, one company might use two large eggs, for example, or two small eggs, but they still use two eggs. So you might consider that the stabilizer. So, what happens is very subtle changes within the mixture of the drugs might make you feel a little bit differently. So the way to turn a generic drug into a brand name prescription is simply to stay with the exact same manufacturer. Most prescriptions have the manufacturer on the label, bottom left corner. So if you’re on a Schering Plough generic or a Goldline generic, as long as you just ask the pharmacist: “I’m feeling really good on this Goldline generic. Could you make sure when I do my refill that I stay with Goldline?” Then you’ve turned your generic drug into a brand name for a fraction of the brand cost.
Katherine: Does that make sense to you?
Sean: Yes, it does, it makes a whole lot of sense.
Katherine: It’s really just about consistency of ingredients and some ingredients might make you feel a little funny. You might have had salted butter in your original version of your drug and now you’ve got unsalted butter. And that little change made you feel a little different. So, you can be in charge of your own generics by just asking the pharmacist for the refill of the same manufacturer.
Sean: We’re talking with Katherine Woodfield, author of “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”, because you have that capability by buying her book. By the way, where can they get that book?
Katherine: It’s on Amazon. It’s on Barnes&Noble.com or you can check out my website: www.healthcare-insurance-education.com. You also can just download it on your E-reader or from Amazon or Barnes & Noble.
Sean: Cool, Katherine, let’s talk about this exercise that you do with your clients, having them call around to different drugstores for a particular drug. Could you help extrapolate that for us?
Katherine: Yeah, that’s a real eye opener for a lot of my clients. Most people think, well, if it’s 10mg of Lipitor, it’s 10mg of Lipitor. Therefore, it must be sold at the same price. But, pharmaceutical companies have wholesalers, wholesalers have distribution systems. Distribution systems sell to pharmacies. A wholesaler might run a sale and it might change the price of a frequently filled product. And so, what happens is, a lot of people don’t realize, that if you have a 10 mg prescription of Lipitor, for example, and you call your local chain pharmacy, and maybe you call your local supermarket pharmacy, and maybe you call your local privately owned pharmacy, and you ask them “for a 30-day supply of 10mg of this drug, or whatever your prescription is for a 30-day supply if I was paying cash (and that’s really important-you want to make sure you clarify “IF I’M PAYING CASH”), what’s the retail price of this prescription?”
Sean: Is cash key in this situation - is it better to pay cash?
Katherine: It really depends. Insurance companies have annuity tables - they know how much you’re spending. They don’t set themselves up to fail. So, for the most part, if you have a generic drug that is available, it’s probably going to cost you less if you have a $20 co-pay for a $30 drug, but you’re paying a $200/month premium to access the $20 co-pay. It seems silly to spend $200 to save $10, right?
Katherine: So, for the most part, what I recommend, and why I want you to be an educated healthcare consumer, is that you call three pharmacies. I’ve seen as much as a $30-40/month price swing in a prescription that my family takes. So, just like I buy my vegetables at the farmers market and I buy my other product at a local supermarket when they’re on sale, I actually fill different prescriptions at different pharmacies because I can get the same prescription at [different pharmacies for less]. We even have a supermarket chain called Shoprite here on the East coast and there are all sorts of diabetic medications that they offer at no charge at all – that are free. Walmart has a whole bunch of drugs that are $4 prescription co-pays. So, I actually have prescriptions in different pharmacies. Just like I buy other products, I shop around to get the best price for the same product.
Sean: Yeah, I know people that will shop around for, they like a certain type of pop, and they know the price of that pop, and certain grocery stores manipulate their prices and they’ll shop around. It’s the same concept, isn’t it?
Katherine: Pharma is the exactly the same when it comes to generic prices- it’s pretty much the exact same thing. So, one of the things I have in the back of my book is a workbook. You need to find out how much is the increase in premium that you’re paying for your prescription drugs, (i.e., the right to buy it at a discounted rate), versus the actual retail cash cost. You may find that you’re paying more in premium and then on top of that, you’re paying a copay for a prescription. You may find that that’s actually more expensive than just buying your prescriptions on a pay-as-you-go basis.
Sean: Nice. Let me bring in Brian Munderloh to the conversation. Where can they help find this information as far as the out-of-pocket cost of drugs?
Brian: Katherine brought up a few really good points that I think employers need to be aware of and I know she talks to employers about this. One of the main drivers of healthcare cost is pharmacy and any time you can get an employee to have a generic drug, that’s going to be a win. The information that she gave out as far as how to turn a generic into a brand name drug can alleviate a lot of the fears that some employees have, especially for employees that are under a copayment for a drug. How do you get them to be comfortable if they pay about the same no matter what on their health plan? So, everything that she’s just said kind of applies to the groups as well. There is one product that we sell that’s pretty cool. It’s a telemedicine product and there’s a portal in there where you can go online and you can actually see all the different prices of medications in your area right online. So that’s another option for you –is try and look -provide employees with something like that. But everything she said is absolutely right on.
Sean: Katherine, any reaction?
Katherine: Well, thank you. I love hearing when people understand and follow along.
Sean: Absolutely. Me too.
Katherine: Here’s the thing. For so many years, we have a generation of people who have not been involved. Our routine consumer behavior has been hijacked when it comes to price and comparison shopping for routine medical care. That’s because we’ve basically asked a third party, an insurance company, to do it on our behalf. So, as a population, we have excellent consumer skills. Most people know how much a can of peas is or a how much it costs to change the oil in your car, and know when there’s a good price or good value out there. But [for healthcare], we’ve suspended those skills and hired a third party to do it on our behalf and it’s costing us a fortune.
Sean: The middleman.
Katherine : It doesn’t have to [cost a fortune] when you become an educated consumer , and you use your exact same consumer comparison skills, in the healthcare market.
Sean: More with Katherine Woodfield, author of “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”. Plus, how do we fix all of this? I’ll tell you in less than seven minutes. Come right back to America’s Healthcare Challenge.
What does this law, referred to as the Affordable Care Act, (a term I use loosely), mean to you? Well, that’s the focus of this program. Back and better than ever, this is America’ Healthcare Challenge. I’m Sean McGuire. I’m tackling the issue of the day - how to bend the cost curve, how to make yourself an educated consumer and we’re joined by Katherine Woodfield, author of “Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer”.
Katherine, [do you have any] final thoughts before I pontificate on how we fix this whole situation?
Katherine: I think that everybody has the ability to be an educated consumer. You know, I have a workbook at the back of my book. All you need to do is ask the simple question: “How much is that going to cost me?” If you ask that of a doctor, if you ask it of a blood test lab or a pharmacist, and start keeping track of that information, you’ll be better positioned when it comes time to buy insurance to know how much insurance you actually need.
Sean: Well said.
Brian: Well, Sean, one thing I want to close with is, in the absence of good information, people make things up. So my closing thought is, don’t panic. Just align yourself with some thought leaders and stay tuned to this show every Saturday and we just have to take it a day at a time. Everything is changing quickly, but as new answers and new regulations come forward, I’m really glad that we have this show to bring that information to people.
Sean: Katherine, thank you for joining us. Brian, thank you for joining us. Until next time, you can follow me on Twitter at Americascanary or Facebook.com/Americashealthcarechallenge.
I talked with the nationally-known, the term that everyone is using now is, thought leader. This guy wrote a book, and I hope to have him on. I’m not going to tell you who it is because you’re just going to have to listen. This guy has major star power in the industry.
He said “the biggest threat right now to the United States Healthcare system is the lack of information on the Affordable Care Act.” 52% of Americans believe that this law has not even passed. That’s incorrect. It passed. It’s a law. March 23, 2010 – that’s when it passed. It’s been implemented. Now, they’ve been writing behind the scenes. They went 11 out of 12 months without releasing anything. This thing is coming and it is going to impact every single one of you, directly or indirectly, some for the good, some for the bad. The law looks at every single person, every single business, every single healthcare provider, differently because it introduces several sets of standards that look at an individual, for example, a business of 55 employees is facing new taxes- about $50K next year. But that tax or that situation is going to be different for a business that’s a blue collar firm of 55 employ as opposed to a business of 55 white collar employees because if that business of white collar employees just crunches numbers and says that it’s just cheaper to drop insurance and send people to the exchange, well, those people will see a reduction in take home pay because they are going to be mandated by the law the Affordable Care Act (remember it’s the law). Civics is just destroyed in this country – people do not know how their government works and it’s really sad.
Join me next week and for the remainder of 2013, right here at this time. Spread the word.
This radio show provides you with the best cutting edge information on healthcare reform, what it means for you, what it means for your business. Join me next week. I’m Sean McGuire, online at Healthreformexplained.com