More Doctors Are Dropping Insurance Altogether

Happy doctor
What’s He So Happy About? (Photo credit: Lisa Brewster)

This past Saturday in Minneapolis, a group of doctors held an innovative conference on how to run their medical practices without insurance. According to ABC News, this trend of ditching insurance altogether is creating a lot of interest, and a lot of controversy.

Goodbye to Insurance Headaches

Why are doctors bucking the system? Doctors are tired of spending their valuable time and energy haggling with insurance companies in order to get paid. They want to cut the administrative hassle and focus on what they went to medical school for in the first place – practicing medicine.

How it Works

Doctors are switching to “direct pay” health care – meaning the patient pays their doctor in full at the time of the appointment, whether that patient is covered by medical insurance or not. At first glance, this may seem more expensive, since you can’t rely on your insurance to co-pay or reimburse any of your medical costs. However, doctors report that cutting out the insurance paperwork enables them to significantly lower their fees. Many have also been able to negotiate steep discounts with the firms who perform lab work and medical tests.

Another strategy doctors are using is based on a single membership fee for access to a group of doctors, or medical group. The patient pays the one-time fee and all visits are included.

Why it Makes Sense

Most people don’t realize this, but your medical insurance isn’t really insurance at all. Insurance is meant to protect you in the event something unexpected and very costly happens, such as a house fire or a major car accident. The current system of paying for health “insurance” every month so you have lower bills at your routine medical appointments is not insurance, in the true sense. In fact, what you are actually paying for is “medical administration,” or put quite simply, a third party getting in between you and your doctor to drive up costs and cause paperwork headaches. If your medical insurance was true to form, it would cover only catastrophic illnesses (as some plans do), and stay out of your regular care (and your doctor’s hair!).

Your New (Potentially Cheaper) Option

So, if your doctor stops accepting health insurance and lowers his rates (some say that doctors can lower their rates by up to 60%!), you can take this as an opportunity to re-evaluate your health insurance scheme. It may be wiser for you to pay for your routine appointments out of your pocket and keep only the catastrophic insurance coverage. However, if you decide to go this route, make sure your catastrophic policy will continue to be available after Obamacare debuts in October. There is talk that catastrophic coverage will disappear entirely (although I doubt this will hold completely true). Stay tuned…

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