Episode 98 | Health Insurance 101 for ACL Rehab

What is up guys? And welcome back to another episode on the ACL Athlete Podcast. Today is episode number 98, and we are talking health insurance 101 for ACL rehab. And I thought a lot about this episode. And the reason that this came up is because it is the end of the year here in the U.S., well, really everywhere. But it is December and December means that most people are picking their new insurance plans here in the United States for their healthcare. And I wanted to talk a little bit about our own experience, me and my wife going through this. And even talked to other ACLers about my own past history, which I know you guys have heard me talk about. But this is something that I want to shed some light on and provide some education. 

If you’re looking at your health insurance and you’re like, I don’t know what the heck any of these terms are, what to do about them, how to put anything together. I hope that we can actually tackle that today. Because I know for me, being in healthcare, it can be difficult for me to look at health insurance and fully understand it sometimes; from the terminology to the numbers, to who to contact. I’d love to break down just the simple basics of healthcare insurance, what you’re looking at, and how you can use this for your own ACL rehab and walk through a legit example of what me and my wife actually just decided for our own health insurance, even though it crushed me inside. But let’s do this.

Health insurance is basically what we use in the U.S. to be able to help cover any health-related issues, especially going to the doctor or prescriptions, or any type of procedure. If you’re someone listening outside of the United States, you might be like, well, we have the social system. What I encourage you to do is just listen to this and see the comparisons of what we are paying for and what this insurance provides or doesn’t provide, and see how it compares. And I would love to hear your thoughts if you’re someone who’s outside of the U.S. and you have your own system. We have athletes all over the world, and so we hear all about the social system and whether it’s the NHS or all these other different processes. And it’s very interesting to see how they all work.

First, we’re going to dive into some principles and some terminology and give a little bit of background that health insurance here in the States will vary a good bit. It’ll depend on the age of who is getting the insurance, of course, kids are typically covered with their parents. There’s a socioeconomic status that is associated, and there’s Obamacare here as of 2022, especially for lower-income families. But then also people who might not get it through their work or have a change of life or need some support. The state will depend on where they live, and their job coverage. Usually, most people get their benefits through a job or school. The bigger the company the people have better health insurance, overall, I would say, unless they are just cheap out. But most big companies have better health benefits and insurance because they are able to create contracts with insurance and have better rates and better premiums and things like that. And this typically comes out of your paycheck as a part of benefits. Your company may pay for some of it or most of it, as well as have these contracts in place. It all kind of depends on the company. 

The smaller you are, the more disadvantaged you are in getting good health insurance. And I’ll share our personal examples so you guys can see this as a small business. But this was even in other jobs that I had where we had a smaller team. And so the insurance benefits weren’t that great and we had an HSA account. Each person is basically if you have a high deductible, so you have to pay a high amount. Then they give you a health savings account where you could put your own pre-tax money into it. So that’s just a side note here, but that’s usually some of the big picture. How does it come into play? And then you have health factors. Someone who might smoke, for example, might have a higher premium because they’re putting themselves at risk. Insurance premiums and insurance companies will mark that up. 

Now let’s talk about the different types of health insurance. So the three typical ones you’ll see are HMO, POS, and PPO. HMO means health maintenance organization. This is where a PCP or a primary care provider is usually that gatekeeper to refer you to a specialist. The other side to this is that you don’t have any out-of-network benefits. There are two different zones you can go in. There’s in-network where the insurance is in-network or has a contract with the specific provider or there’s out-of-network where the insurance does not have a contract with a specific provider. And so the HMO only covers the in-network. And then if you move on to the POS, the point of service, the PCP, the primary care still manages it, but you have options for out-of-network this time. There might be a little bit of assistance with your health insurance. It’s just more expensive. And then you have PPO, which is the preferred provider organization plan. This does not need a PCP referral. You have more freedom here and flexibility. And then your out-of-network will still cost more, but those benefits are still there.

Now, the way you can think about paying within insurance, there’s three different levels. And it starts with you only paying, there’s a shared cost between you and the insurance company, and then there’s they pay or the insurance company pays only. You almost want to think about this as a process of you’re going to be the one paying first. Then there’s the shared cost, and then there’s the they pay. And this will make more examples as we roll through some terminology and some examples. 

The first term that’s important to know is your insurance premium. So this is basically the amount you pay per month to have health insurance. For example, this could be $300, it could be $500, it could be $1,000. Think of this as your Netflix subscription fee basically every month. No matter how much you use your Netflix, you are still going to get paid that same rate, and that’s what your insurance premium is. Then you have your deductible which everyone is probably familiar with. It’s this big word that most insurance and clinics use. But the deductible is the amount you pay before insurance helps you at all. Outside of preventative services that is. So for most people, that is basically like a basic annual checkup or a screening, those are the preventative services, maybe a vaccine. But overall, if you’re talking about ACL rehab, having to go to your surgeon or the orthopedic, get MRIs, or get any type of surgery done, that is all going to be out-of-pocket first until this deductible is met.

Let’s say for example, you have a $3,000 deductible and you got a bill for your MRI that’s $1,200, and your initial orthopedist visit is $700; that’s $1,900 total. You’ll be responsible for all of that and still have 1,100 left to pay until insurance kicks in a little bit to help you out. You’ve met basically 1,900 of that $3,000 deductible. Another example of this is, let’s say you have a deductible that is still 3K, but your bill for the hospital bill, for example, is $6,000. Your insurance will start to help you out to cover the rest once you hit that 3K, and then the rest of that amount will be dependent on your co-insurance or your out-of-pocket max. But after that 3K deductible has been met. For the rest of that 3,000, your insurance will help to assist in paying some of that at least. 

As a general rule of thumb, the lower the deductible that you have, the higher the insurance premium you’re going to pay. You’ll pay a higher monthly premium in order to have that lower deductible overall. And then vice versa, the higher the deductible, the lower your premium is. So this is where if you have that monthly subscription that is lower, then your deductible is going to be much higher, typically. And usually, people who don’t really need to use their health insurance, typically healthy, maybe need to do a checkup or they get sick every now and then. They usually go with the higher deductible plans versus someone who is going to use theirs a lot. 

You could almost think of someone who has an autoimmune disease or some health complications, or maybe something like an ACL tear comes up. Then, this is something where you might have to strategize and be like, okay, if I’m planning to have surgery in the new year, maybe I want a higher premium, but then I get a lower deductible. It always comes back to what is the wash or what is the breakeven point and what’s going to save you the most, as well as the best benefits. And then there’s maybe a payment you make each time after you get a medical service or a prescription. This is usually termed as a copay. And this is a set cost you will pay like a doctor’s visit or prescription. 

For example, your PT clinic charges $300 for a session. Your insurance copay is $25 for each physical therapy session. Insurance pays the rest. But there might be a catch. This is where you have to be careful. If you haven’t met your deductible yet, you’ll likely be responsible for the rest. So that 275 of that 300 of that, of course, depending on your insurance policy. As a side note here, when I used to work at the insurance clinic before PT school, people would get absolutely enraged because they would pay their copay.

Let’s say they paid that $25, then later they would get billed for the rest of that, that 275 because their deductible hadn’t been met yet. And so they were assuming, oh, I’m just going to pay $25 for this visit. They didn’t know their deductible wasn’t met and they got billed for the rest of that session. And that is what happens. It’s wild. 

And that leads me to the next payment type, which is co-insurance. Your share of the cost for a covered healthcare service is usually calculated as something like a percentage of the allowed amount of the service. Let’s say you have a 50/50 policy, for example. That means that you cover 50% and your insurance covers 50%. For a $100 visit, you owe $50 and they owe $50. I mentioned the example earlier of the deductible. That is $3,000, right? And the bill that was charged was $6,000. You pay $3,000 for that deductible, which kicks in your co-insurance at 50/50 based on this plan. Your insurance pays 50% of the remaining 3K, and you pay the other half. You pay 1500 and they pay 1500. 

And this leads to the next term, which is individual out-of-pocket maximum. This is the maximum amount of money you pay before insurance covers 100%. It’s the cap, including deductibles, copays, co-insurance, and drugs to a certain amount. There’s individual versus family. Family is usually much larger as you can imagine. But this is the top number that you have to pay, and then the insurance starts to cover the rest. And then there’s the network. And I mentioned this earlier, the in-network versus out-of-network. This is basically any of the doctors, PTs, hospitals, suppliers, and things of that nature that your health insurance has contracts with, to basically deliver healthcare services to the people in their contract.

And so basically, if you have a field of professionals and you’re looking at all these different professionals, there’s going to be a certain group of them that will take that insurance and be in-network and have contracts with that insurance. You’ll be able to utilize your insurance with them versus out-of-network providers who don’t have insurance or don’t have a contract with that insurance. For example, the ACL Athlete, we are an out-of-network clinic, we are an out-of-network provider with our athletes because we don’t have any contracts with insurance. We don’t want to deal with them, the reimbursements suck, and we just don’t want them to dictate your care. 

And if you are someone who’s listening, who is trying to figure out, okay, what is the difference or what do I need to look at? One of the things that’ll be important here is that if you’re looking to utilize out-of-network benefits, you might have different deductibles, you might have different out-of-pocket maxes. They might not overlap. This is something important to look at, if you’re someone who’s like, maybe I’ll try to find someone out-of-network. But then it’s going to be important to know what are your deductibles, what’s your out-of-pocket max, do they cross over. Some food for thought here if you’re looking into some options. 

I bored you with all the terminology and healthcare insurance stuff, but I wanted to make sure that you guys have a resource from someone who’s in medicine. This might change over time, but this is where we’re at in 2022. I think it’s important to understand this stuff and to know exactly what you’re paying and what to look at, understand these terms, and make the best decision for yourself, for your family, for your ACL rehab, and for other healthcare benefits and needs. 

Now, the next thing I want to dive into is actually a practical example because me and my wife just picked our insurance. And I want to share with you guys what it’s like for me and my wife to have to choose our own insurance. And I’m going to warn you, these numbers are going to pain you; they pain me even more. Here’s the transparent real-real that I want to share with you guys. 

Some background here, the ACL Athlete is a small business. We’re a small team. My wife works for a small special needs school here in Atlanta. Yeah, I know she is way better than I am. But we get our health insurance through them. Because as small business owner, as an entrepreneur, we just don’t get really good insurance. It’s just the way it is in the United States. And I wish it was different, but that’s just where we’re at. And it’s the trade-off between working for a big business that will give you better benefits versus doing the thing with the ACL Athlete, which I am here to do. I’ll take that and I’ll eat it. But I want to share with you guys how we came to our decision. Let’s talk about some numbers here. Over this past year, are you guys ready for this? We paid over $800 per month in health insurance, and our deductible was $6,000, individual deductibles were $6,000, isn’t that wild? And so that was the best insurance we could pick from a deductible to premium standpoint to actually get some coverage for us. And so it is just wild for it to be over $800. 

Well, guess what? It is a new year. We are planning for new insurance. And we got proposed these new plans and let’s talk about what 2023 insurance is going to look like for the Patels. We were provided with four different options. Three were going to be non-HSA bases, so we did not get health savings accounts with those. But to give you guys a good example here. For the health savings account, that would be $950 per month combined for both of us. The next plan would be $1,000, the next plan would be close to $1,100, and the next plan is $1,170. And if we carry that across from the cheapest to the more expensive, the cheapest had a $3,500 deductible with some other fees associated. The next one was 7,900, the next one was 5,000, and the high premium one had a $3,000 deductible. And this is not even what the out-of-pocket max is. This is wild, y’all. This is where our healthcare system is. And the reason that I’m bringing this up is because this is just for me and my wife, a small business, a small school that she works at. And these were the ” best” plans we could get for our family to cover health expenses. Oh, and get this. They wouldn’t even share how many physical therapy visits you would get on this plan because they have to be preauthorized. We didn’t even get a number for this. But you have to be preauthorized to figure out how many you get versus giving us a lump sum of a certain amount, sweet.

That’s really helpful for my ACL rehab if I were to be going through this. Now, you would have to figure out, okay, I got to have the procedure, go to physical therapy, and then see how much would they grant me, likely a very low number, and then you would have to get authorized and approved again and again. And that’s if you can prove medical necessity. Once you can clear your activities of daily living, a lot of the time insurance will cut you off because their goal is to get you back to normal functioning rather than something like a sport. Now, not always the case as you guys know. And insurance can vary and the care can vary, but this is usually most of what we see in healthcare, especially insurance-based plans.

Now, why am I sharing this? I think it’s important to have some transparency here and for you guys to know like, I’m walking through this and you know my previous history of whenever I was an undergrad, I had to pay $10,000 out-of-pocket max before I could get the rest of my surgery covered. I owed $10,000 to the healthcare insurance company in order to get my ACL surgery. So I have walked this, I know exactly what it’s like. I want to highlight a few things here about what I and my wife did over this past year. Because we still had ridiculously high and expensive insurance. But we decided to take a different route. And what we did was we paid cash for a lot of this past year any healthcare expenses. And let me break down a few reasons why. We knew our deductible was really high. We weren’t likely to hit it. We were like, okay, does it make sense to even put money towards our deductible if we’re likely not to hit it because we didn’t really expect any big medical expenses this year?

Number two is that the cash rate in cost is typically much lower than you would think for a lot of healthcare services. What happens is, is that most doctors and medical offices bill higher rates to insurance companies, knowing insurance companies will only pay a portion of it typically. If you bill higher, the odds are you get more in return. But if you haven’t met your deductible yet, guess who’s stuck with that cost until it’s met? That’s why it’s not unheard of for ACLers to have their first sessions at PT, potentially charged at 300, 400, 500. I’ve heard as high as six to eight to a thousand dollars per session. And usually, these are these clinics that are associated with hospitals where they can get away with charging higher rates and getting higher reimbursements back. You charge 800, if you have a higher reimbursement, guess what? You’re going to get paid more. So then why not just charge more for the session? And hopefully, the insurance will at least pay a portion of it. I mean, if you only charge 200 for a session and the insurance only covers 25% of it, you’re only going to get $50 back. 

But if you charge 800 and you want 25% back, then you’ll get 200. That’s a pretty solid difference there, even though they typically get higher reimbursements than that. The other thing I want to talk about is, why we decided to do cash because we wanted to work with certain professionals. They were not in our network. We had to decide whether we wanted our insurance to dictate our provider, or we got to try and choose ourselves. And the one thing that I want to add here is that I completely get, not everyone is in a position to do this, and I get that. In PT school, when I had that high deductible, I did some training on the side to save up some money for some appointments I needed and paid cash instead of going through my insurance. Because I knew that wasn’t going to do anything and I wasn’t going to hit my deductible.

I found a way to try and make some money in order to get some of those visits that I needed for some care that I needed. And that’s the choice that I made. And sometimes people just don’t even know if they can even use a cash pay type option. If you are someone out there who has a really high deductible and you don’t really care if the cost goes towards the deductible, ask the clinic, ask the medical office. Do they do a cash-based rate? Maybe for the MRI, do they do a cash-based rate? And see, you just have to be okay with knowing that won’t go towards your deductible, and that’s okay. You just have to weigh the risk-reward of all that and the expenses and your finances. Isn’t that crazy guys? This is just a wild world we’re living in.

Healthcare is at its highest. The coverage is at its lowest. And I just wanted to do a big-picture view of this. If you are someone who is trying to figure out your own insurance and not understanding it, I hope that this is helpful and I think everyone should understand health insurance. Not sure why they don’t teach any of this stuff in school or taxes or presenting. There’s a lot of things wrong with school, but I want you to feel educated, empowered and understand health insurance, and make decisions for yourself. That’s exactly what this podcast exists for. When in doubt, if you’re not sure, try to call the health insurance or whoever’s supplying it and ask questions. Tell them your scenario. Try to do some numbers. 

Overall, have a plan, especially if you’re planning to use your insurance. Know what those costs look like, what the long-term plan is, and how many visits you might have, especially for ACL rehab. And then just know that there are other options that exist. Try to choose from a lens of what type of care and attention you want versus letting your insurance dictate your care. And as the world evolves, remote training, remote coaching, and remote services are more available. And you can be able to search and find help that you need, that might not be dictated by your insurance. That’s what the ACL Athlete does, that’s why we exist, to be able to hopefully fill in that gap where insurance and the healthcare system fall short.

In the meantime, I’m going to crawl up into the fetal position and wonder why our insurance premium is so high, which we know why. But I’m going to save you guys all the ranting for today. Today was hopefully educational. I thought about making it a little bit more of a distaste for healthcare. But I told you I’m going to leave that for certain periods of time, but today is not it. It is what it is. This is the current state we’re in. Make good decisions. Be educated on those decisions. 

And as always, if you ever need help, please reach out to us, to the team, to the ACL Athlete if you need any guidance or any help. Until next time, this is your host, Ravi Patel, signing off.