Dr. Gray's Straight Talk

Honest and blunt healthcare discussion and advice.

What Is “Phantom” Coverage?

Posted by Dr. Gray on Thursday, March 5, 2009

Although it’s not getting much play in the media right now, it should be. “Phantom” coverage refers to the latest trend in insurance coverage whereby a policy is sold touting that it has great reimbursement rates and is a good deal for the patient and doctor. Unfortunately, that’s not how it plays out.

In these policies, the insurance company raises the deductible and copayment amounts to the patient… followed by a global fee cap on reimbursement to the health care provider. What’s a “global fee cap,” you ask? Under a global fee cap, reimbursement for services are capped at an arbitrary amount regardless of the procedures provided or needed. As you can probably imagine, these cap amounts are obscenely low. Current average? $42.00.

Yup. Forty-two dollars. If you are a regular patient coming in for a quick tune-up, brief exam and adjustment only, the maximum reimbursement to the office is $42.00. If you just fell down the stairs and have potentially broken your arm which requires a thorough examination and x-rays… $42.00. How’s that? If you have a serious injury, how would you like your doctor or hospital making sure you only got $42.00 worth of investigation… because, honestly, after that they are losing money.

Well, what about that makes it “Phantom Coverage?” In conjunction with the $42.00 fee cap, they have raised the patient’s copay to $40-50.00. So… the patient still pays the entire amount anyway! If that’s the case, why pay the insurance company in the first place? Think about it… you’re paying the insurance company $300-1000 per month for what? To screw the health care facility? To decrease the quality of care you receive? What’s the point.

My advice? Tax-deductible health-savings account tied to a high-deductible, low cost policy that is only used for emergency purposes. I know of relatively few doctor’s offices that will not work out arrangements to pay for your care over time, or won’t give you a time-of-service discount. Quit bending over for the insurance companies. The economy’s been weak lately, but that’s not been reflected in the bottom line of the insurance companies.

Why do you think there is such a big push for universal health coverage in this country, and the massively powerful insurance lobby hasn’t been fighting it? If the government were providing the insurance, they’d be out of business, right? Wrong… they’ll be the ones contracted to administrate the policies, so the politicians won’t look like the one’s rationing care.

Wake up, America.

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