A colleague with a corporate health plan told me that his family hospital bills – with a corporate health plan – for the birth of his baby was more than $3,000. The health plan only covered the birth of the baby after a hefty $3,000 deductible.
Moreover, the hospital sent an additional $2,000 charge claiming that they had to treat the newborn of some infection, and the treatment was not covered by the $3,000 deductible.
When my colleague pressed to find out more detail, the hospital explained this was not treating a real infection, but the possibility of an infection. It was a prophylactic treatment.
How did we get to this point? How can the birth of a baby, with a corporate health plan, cost $3000 out of pocket – and how can the hospital send an additional bill for $2,000 for treatment it thinks is needed (but apparently the insurance does not cover in the standard package)?
Don’t we have state rules in the state of Massachusetts mandating that (a) hospitals only charge what the insurance covers, (b) insurance is obligated to cover 99.999% of what is needed during child birth?
And, not to forget, when did we get to the point that corporate plans are even permitted to have such high deductibles? We have discussed this many times in the past when the subject of non-competes comes up. Employees have minimal bargaining position, when looking for a job, to stay and ask detailed questions about the corporate health plan. And weeks after they join, the corporate health plan can change from under them.
There is some history behind this. Corporate health plans offered much better benefits about ten years ago. Then, Obamacare happened. The way things were explained at many companies, corporate health plans had to change due to higher costs caused by Obamacare.
In effect, Obamacare did not create higher costs for the employees of these companies… Nor did Obamacare force these companies to change health plans. But health plan costs, and, possibly, taxes, did go up. And companies found it convenient to pass the health costs to the employees.
Municipal employees, probably, fare no better. If municipalities are in the GIC plan, they have similarly high deductibles.
There are some additional quirks to consider. Once the babies are born, I am told, they becomes a dependent of the plan, and immediately starts accruing costs with their own deductible, separate from the mother.
…So I have asked my friend how he paid for his baby. He said he charged it to his credit card.