How Health Insurance Works Today

Excerpted from
The Medical Bill Survival Guide : What You Need to Know Before You Pay a Dime
By Pat Palmer, Martha Ellis, Christopher Slone

Last Thanksgiving I was exhausted, and so was everyone else in my family.

Business, which had long before become a family affair, was booming. We were being stretched this way and that, putting out one fire only to start another. And in the middle of the boom, just two weeks before the holiday, my eldest daughter, Candi, got married.

It was a beautiful wedding, but pulling it off took a lot out of us all (weddings will do that). On Thanksgiving Day, while Candi and her new husband were still in honeymoon mode, the rest of us were in recuperation mode!

We were enjoying a brief break between the hustle and bustle of wedding planning and the hustle and bustle of holiday shopping. All of us, that is, except my mother, who had come down with a bad cough. We suspected she'd caught bronchitis.

The day after Thanksgiving, Dad took Mom to the doctor. Her doctor suspected she might have pneumonia, not bronchitis, and he admitted her into the hospital. Tests there revealed that Mom had neither bronchitis nor pneumonia. She had something much worse: a tumor in the top part of one of her lungs. (Mom had been a smoker for over forty-five years.) Since the tumor was too deep to tell whether it was cancerous or not, her doctors elected to do surgery and take that part of her lung out. They removed what they could, but as it turned out, it was too little too late.

My mother was dead by Christmas. We were devastated.

Thankfully, Mom had medical insurance through a health maintenance organization. Under the terms of her membership, in the event of her hospitalization she was to pay a flat deductible of $300, and the HMO was to pay everything else.

Yet on the morning of his wife's funeral, as if he didn't have enough on his mind already, my father received a bill from the hospital for $10,000! He was shaken.

I was livid.

Two words were prominently plastered at the top of the statement: "NOW DUE." Another word, I noticed, was slipped in rather subtly at the bottom: "ESTIMATED." I tore the "bill" up and threw it in the garbage can before we left for the funeral home. "Don't even think about it," I told my dad. "Let's just go to the funeral."

A month later, Dad received a second statement. This time I called the hospital up on his behalf and told them, "My dad is seventy-one years old, he has a diseased heart, and you had better not send him any more bills until her insurance pays!"

He didn't get any more bills.

But four months after my mother's death. Dad did get a statement from Mom's HMO. It was to notify him that they were covering all but $472 of her medical bills, in addition to her $300 deductible.

Four hundred and seventy-two dollars was not a huge sum in comparison to the total charge of $80,000 owed after all was said and done, but it wasn't chump change, either. The HMO was supposed to have covered everything beyond the deductible. I called the HMO and asked them just what it was they were refusing to cover.

Sixty-two dollars of the uncovered charge, it turned out, had been for a "blood pressure cup." Why the HMO chose not to cover that charge was beyond me, but since the hospital was under contract with the HMO to write off any necessary charges it didn't cover, the HMO saw to it that they did. The blood pressure cup was deemed necessary to my mother's care.

And the remaining $410? It turned out that money was for nicotine patches that my mother's doctor had prescribed for her to help her get through surgery without having to light up a cigarette. Her doctor had deemed them medically necessary in light of her condition.

But the HMO said no. The patches were items of convenience, they felt, and they wouldn't pay for them.

First things first.

Mom had been prescribed fifteen nicotine patches. The hospital had charged her over $400 for fifteen nicotine patches. In other words, they had charged her almost $30 per patch ... $30 for the very same patch you can buy at Wal-Mart for a little over a buck!