Are you on the hunt for health insurance, or curious if you’re getting the most from your existing policy? Washington Filmworks recently reached out to S. Fisher Qua, Director of Health at the Washington Health Foundation. The Washington Health Foundation is a statewide non-profit with more than 20 years dedicated to making Washington the Healthiest State in the Nation. Below is the second of two guest posts addressing healthcare and health insurance. See the first post in Flipping The System.

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Are You Getting What You’re Paying For?

By S. Fisher Qua, Director of Health at the Washington Health Foundation

Every month the bill comes. Mine’s for $262. My third largest expense behind rent and school loan payments. That $3144 annual payment buys me ONE free visit per year – thanks to provisions in the Affordable Care Act (ACA) – with my physician for a physical, five additional visits at $40/piece, and the ‘peace of mind’ that should something go catastrophically wrong with my health I’d be out only $15,000 (leaving me with some pennies in my pocket).

What happens to that $3144? By law – again, thanks to the ACA – at least 80% of it MUST go to providing healthcare services (this percentage is known as the ‘medical loss ratio’ – and for larger group plans the ratio increases to 85/15). That means $2515 should be going towards healthcare expenses. Even though I don’t pay anything for my physical (no copayment), it still costs my insurer ~$200 (perhaps more if I needed blood tests). So, we’re down to $2315 that ought to be used to improve my health – or pay for less healthy people to get the care they need. Fine. I implicitly understand the social contract we agree to when buying health insurance: When I’m healthy it subsidizes the cost of sick people and when I’m sick others make it affordable for me to get care.

The other 20% goes towards administrative costs, marketing budgets and earning profits for investors (http://www.kff.org/healthreform/upload/8305.pdf). Since my insurer is Group Health Options that means providing the technical infrastructure so that I can easily email my doctor, reorder prescriptions, and talk to a customer service representative. There are obviously far more administrative expenses associated with running complex organizations like health insurance companies, but from my personal point-of-view none really deliver substantial, understandable value. While there isn’t much I can do to improve the administrative effectiveness of insurance companies, there is one way I can be sure to get value from that part of my premium: Selecting a broker who is available to help me understand my benefits, navigate the system, and take greater control over my healthcare decision-making.

Brokers are paid a ‘commission’ by insurance companies for finding and connecting consumers to their plans. Sometimes these commissions are paid out as a percentage of your premium – up to 7% in some cases – while other insurers pay a flat fee (up to $25/month). Every time you pay your premium, the broker gets his or her commission. Do you know your broker? Do you know if you even have one?

Chances are you either bought your insurance plan directly from the company itself (there are relatively few health insurance companies that serve Washington state), in which case they get to keep that commission. Or, you went to everyone’s favorite search engine and typed in something like ‘affordable health insurance in Washington’. Like many people, you probably clicked on the top result from eHealthinsurance.com, went to their website, entered some basic information and then got a menu of plans to choose from. After choosing the plan – most of which were incomprehensible and difficult to understand the benefits and risks you would be incurring – that insurance company then sends the commission off to eHealthinsurance (based in California) every month until you change brokers or drop your plan. A very small number of you might know a broker personally that has helped you find plans, make decisions and navigate the system. In that case, keep it up!

For the rest of us though, what can we do to ensure we’re getting value for the money that’s dedicated to broker commission? Afterall, it’s one of the few ways we can control what happens to our premium dollars.

First off, find a broker! There are great brokers out there waiting to work for you. If you’re looking, the Washington Health Foundation, a statewide non-profit with more than 20 years’ experience improving health for the people of our state, employ three Personal Health Advocates to help you navigate any healthcare question… and you can even direct your commissions to help us run programs, give out grants, and support policies aimed at making Washington the Healthiest State in the Nation. Give us a call at 855-WA-HEALTH to talk with one of our Advocates.

Second, figure out WHAT you really want from your healthcare expenditures. Demand that providers help you achieve a health vision based on YOUR values, context and goals – not theirs. Again, our Advocates can help you find tools to support you along the way.

Third, get engaged in your health. While health insurance is an appropriate mechanism for mitigating risk, engaging in healthy habits, building trusted health relationships, and establishing a community and environment that supports your happiness and wellbeing are even more effective.

Thanks to Washinton Filmworks for inviting us to write a few posts for the blog. We hope that you’ve found our commentary valuable and if you have any questions, feel free to contact us at info@whf.org or just give a call at 855-WA-HEALTH.