lower medical bills

WSJ. – The Magazine from the Wall Street Journal

By MARY LANDRIEU

Read about Senator Landrieu and her commitment to small business owners to make health care more affordable to the 27 million small businesses in this country. As a service provider to many small companies, Medical Cost Advocate is all too familiar with the many challenges faced by small businesses in navigating the health care maze. Small business owners should reach out to consumer directed health care service providers as self service allies for their employees.

After years of struggling with costs that were eating into his bottom line, David White, a small business owner in Maine, recently dropped health insurance for himself and his employees. It was a nerve-wracking decision. “I just hope my people or I don’t get sick,” he told a small business advocacy group.

Louise Hardaway wasn’t willing to take the same risk. Health-care costs forced her to close her small business in Tennessee. Factor 4 Life was, ironically, a business that helped people navigate the health-insurance system!

Unfortunately, these stories are not unique. As chairwoman of the Senate Committee on Small Business and Entrepreneurship, I hear about a lot of business owners hit hard by health-care costs. These costs not only eat into profits, they prevent small businesses from hiring more workers.

Small firms, defined as less than 500 employees, pump almost a trillion dollars into the economy each year, create two-thirds of our nation’s new jobs annually, and account for more than half of America’s work force. But too much of their money is going toward high health premiums that are increasing faster than the prices of the products and services they provide—four times faster than the rate of inflation since 2001, according to the Kaiser Family Foundation.

Nationwide, small firms will spend $156 billion on health premiums this year. In place of those high premiums, small business owners could employ 10 million additional workers—the entire state of Michigan—at minimum wage for a year.

Unless something is done, annual health-care costs for small firms over the next 10 years are expected to more than double to reach $339 billion in 2018. As those costs increase, the burden will get heavier and force many of them to lay off workers. The Small Business Majority, an advocacy group, estimates that over the next decade about 943,000 small business jobs will be lost.

Today, there are already 14.9 million people unemployed in America. We don’t need to add to those ranks, instead we need to help small businesses create more jobs. The path we are on now is unacceptable and unsustainable.

Small businesses want to provide health coverage to their workers, but when faced with cutting employees or cutting insurance, the insurance is the first to go. In 1993, 61% of all small companies offered health coverage. Today that number is less than 38%.

Employers who can afford to provide health coverage are providing it because they are competing with big businesses that offer quality health-care choices for top talent. Businesses not offering coverage are often small, low-wage firms that can’t afford it. There are 27 million small businesses in America, 22 million of which are sole proprietorships. And it is often sole proprietors that have trouble affording health insurance.

Insurance premiums for sole-proprietors are up 74% since 2001. This has made health insurance even harder to afford. And while big firms can deduct health premiums on their federal tax returns, under current tax rules sole proprietors often cannot. This forces them, on average, to pay nearly $2,000 more a year in taxes than they otherwise would have to pay. That is money they could use to buy new computer equipment or other things necessary to keep a business running efficiently.

The additional tax burden that sole proprietors have to pay has not yet been addressed by proposed health-care reforms. To keep our economy healthy we must keep our small businesses healthy, and that begins with stable, affordable health insurance.

I am committed to working with my Senate colleagues and the Obama administration to ensure that the health-care reforms our small businesses desperately need are passed. Small businesses—and all Americans—can’t go another pay check without meaningful reform.

Ms. Landrieu, a Democrat, is a U.S. senator from Louisiana.

Check out Aaron Crowe’s recent article about Medical Cost Advocate which recently appeared on WalletPop.com. One thing is for sure, Aaron is right on when he states, “…one of the worst bills to receive is a medical bill.” Medical Cost Advocate is the resource that can assist you in reducing your medical bills.

Aaron Crowe

Of all the bills that arrive in the mail, one of the worst has to be a medical bill.

Whether from your insurance company or medical provider, the expensive bills are difficult to understand and patients don’t know if they’re getting ripped off.

Add in the fact that by a conservative definition, 62% of all bankruptcies in 2007 were because of medical bills, with 92% of those debtors incurring more than $5,000 in unpaid medical bills, and a hospital bill is enough to send you back to the hospital.

With an 80% success rate of getting patients’ bills lowered, Medical Cost Advocate, or MCA, negotiates with medical providers to get lower bills. It’s a service that makes everyone happy, said Derek Fitteron, CEO and founder of MCA. Patients pay less and doctors get paid.

“It’s not a lose situation for the doctor,” Fitteron told me in a telephone interview from his office in New Jersey.

With most of MCA’s negotiators being attorneys, they know how to negotiate a lower bill by providing data showing how much the same procedures cost across the country, and get the doctor paid soon instead of having to send out multiple bills to patients, Fitteron said.

I recently wrote a story for WalletPop about a Web site that lets customers bid for prices on health care before they visit a doctor. MCA turns that around and helps people lower their bills after their care. It’s rare for people to know how much something will cost before walking into a hospital, Fitteron said.

“When you go in for work, or a procedure, you don’t know how much it’s going to cost,” he said.

MCA doesn’t charge upfront fees for its service, but charges 35% of whatever savings it gets. Customers don’t pay if no savings are found. Once a settlement is reached, the customer’s credit card is charged to pay the medical provider and MCA’s 35%.

Here’s an example on the company’s Web site on how the process works:

If you submit a bill for $750 and MCA gets it reduced by $170, you’ll pay the difference, or $580 to your medical provider. MCA’s 35% cut of the $170 savings is $59.50, making your net savings $110.50.

Most bills submitted to MCA are for $1,000 or more, although they can be for as little as $200.

The most typical bills it gets are for elective surgeries, Fitteron said, such as gastric bypass and cosmetic surgeries that out-of-network providers must do because in-network doctors aren’t covered under most insurance. Large surgeries that are known about ahead of time are also popular bills submitted, he said.

Either through deductibles, co-insurance payments or uninsured or partially uninsured medical procedures, the typical family spends $1,500 per year on out-of-pocket medical expenses, Fitteron said. For 10% of Americans, those expenses add up to $14,000, he said. That’s a big enough reason to submit a bill for review.

Fitteron recommends getting a tax deferred health spending account through work to help pay medical bills, and for checking what coverage you have before you have to go to a hospital.

If they have the time before a major operation, for example, people should check how much insurance coverage they have for it, Fitteron recommended. Out-of-network prices are like the first offer a car salesman makes, so it’s worth negotiating.

He cited a recent MCA case that dropped a Florida woman’s hospital bill from $53,000 to $22,000 for knee replacement surgery. She had catastrophic, high deductible medical insurance, and her insurer only paid $3,000 — what it was legally obligated to pay under her insurance plan.

After MCA determined what the “market oriented rate” for a knee surgery was and received some support from the hospital, the bill dropped dramatically.

It’s one less bill to worry about when the mailman arrives.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area. Reach him at www.AaronCrowe.net

Health Costs Are Crushing Small Businesses

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