Copay  

A fixed fee you pay for specific medical services.  

Example: If your insurance requires a $20 copay for specialist visits, you’ll pay $20 while your insurance covers the rest of the appointment cost. 

Deductible  

The amount you must personally cover for medical expenses before your insurance begins contributing.  

Example: With a $3,000 deductible, you’ll pay $3,000 in medical costs before your insurance kicks in. 

Co-insurance  

After meeting the deductible, co-insurance involves sharing costs with your insurance provider. If your plan covers 80% of medical expenses, you’ll be responsible for the remaining 20%. 

Example: If your deductible is $1000, and you have already met it this year, your coinsurance going forward pays 80% of every visit. So, on your next visit with your provider that costs $100, your insurance will pay 80% or $80, and then you are responsible for the balance of $20 

Out-of-pocket  

These are medical costs not covered by your insurance.  

Example: If you see a non-network acupuncturist or one who doesn’t accept insurance, you’ll pay for the services entirely out of your pocket (via cash or credit/debit card). 

Out-of-pocket maximum/limit 

This is the most you have to pay for covered services in a plan year. Once you reach this limit, your insurance company will pay 100% of the allowed amount for covered services. 

Example: If your policy has a $1,000 out-of-pocket maximum, once you’ve paid $1,000 in deductibles, co-insurance, and co-payments, your insurance will cover 100% of your additional covered medical expenses for that policy period. 

Health Saving Account (HSA) 

A pre-taxed savings account available to individuals with High Deductible Health Plans (HDHPs), enabling them to contribute pre-tax income to pay for qualified medical expenses, with the added benefit of rollover and investment options, allowing funds to grow over time. 

Example: If you have an HSA account with $3,000 from personal and/or employer contributions, and your eligible medical expenses for the year total $2,000, you can use your HSA funds to pay for these costs with pre-tax dollars, reducing your taxable income for that year. Moreover, if you have $3,000 in your HSA, the $1000 that you didn’t use can roll over into your HSA for the following year.  

Flexible Spending Account (FSA) 

An employer-sponsored benefit that allows employees to set aside a portion of their pre-tax earnings to cover qualified medical expenses, providing potential tax savings. Unlike, HSAs, FSAs are often subject to employer control and may have stricter rules regarding rollovers and contributions. 

Example: If you have an FSA account with $3,000 from personal and/or employer contributions, and your eligible medical expenses for the year total $2,000, you can use your FSA funds to pay for these costs with pre-tax dollars, reducing your taxable income for that year. However, depending on your employer, you may not be able to roll over these funds into the next year.  

The intricacies of healthcare finances can leave us feeling lost. Misunderstood terms and confusing bills only add to the stress. By understanding the terms used and our own health insurance plans, we can take charge of our financial well-being.  

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[00:00:20] Allie: I’m in my twenties, and I’ve seen so many of my friends go quite literally years without seeing a doctor because the idea of paying those bills, the idea of even finding a doctor that’s covered on their health insurance is so overwhelming that they just don’t go. 

[00:00:37] Eva: I think at the crux of all of this is that we also don’t understand our healthcare system. We are just aware that it’s quote unquote broken and confusing. And then we’re hit with these bills or other repercussions that are difficult for us to navigate, and we don’t know how to go about it because we don’t know what to do.  

[00:01:01] Allie: Hello and welcome to The Hidden Costs of Health. In this show, we’re exploring the burden of medical expenses in this country and how a health event can quickly spiral into financial toxicity.  

[00:01:15] I’m Allie Sandler, a producer for Empowered Us. Joining me today are Lauren Campise and Eva Minkoff. 

[00:01:26] [Music Ends] 

[00:01:26] So, why do we think that this is an important series to be released right now? 

[00:01:31] Eva: About 60% of Americans live paycheck to paycheck, and healthcare is one of those costs that can often be unexpected. So right now is a perfect time to learn the ins and outs of the financial terms and how it impacts your finances so that you can manage to the best of your ability.  

[00:01:49] Allie: We’ve all, all three of us I know cuz we’ve spoken about it, have been hit by surprise bills and they are shocking when they come across your desk. 

[00:01:58] Eva: Oh yeah, it’s terrifying. It’s also terrifying because you don’t know what the origin is a lot of the time. It often doesn’t make any sense, and then you wonder what else doesn’t make sense? What else is coming my way? 

[00:02:12] Lauren: I have about 12 years of healthcare experience, and much of that was managing billing staff. I did medical billing myself, and it’s still [Music] a mystery to me how all of this works.  

[00:02:22] Allie: According to a 2022 Forbes article in a survey of over 2000 Americans who have health insurance, three quarters of them could not define the term co-insurance and nearly half defined copayment and deductible incorrectly.  

[00:02:37] In our first episode of The Hidden Costs of Health, the Empowered Us team brainstormed about how to kick off this series. Finances and healthcare can feel so overwhelming. Even the term financial toxicity sounds kind of scary. So, we thought what better way to discuss finances, then start with the terms that we all seem to hear over and over again.  

[00:03:01] As Lauren mentioned her background in healthcare has given her a deep understanding of the intricate billing process. She is here to share some of the most important definitions with us. 

[00:03:15] [Music Ends] 

[00:03:15] So Lauren, what is financial toxicity anyways?  

[00:03:21] Lauren: So, financial toxicity is a term used to describe problems a patient has related to the costs of medical care. It can be around not having health insurance. It could be around having a lot of costs, even with health insurance. The list goes on. 

[00:03:36] Allie: I think the fact that it’s called financial toxicity is really interesting. I mean, think about the word toxic. It means it’s bad for you, almost deadly even. And that’s what we wanna highlight here.  

[00:03:47] [Music] 

[00:03:48] Lauren: Before we get into the details of all the definitions, every insurance plan is a little bit different and what I’m about to share may vary a little bit from plan to plan. So, I highly recommend making an account on your insurance website to review your own benefits. 

[00:04:02] Financial toxicity impacts so many people, but it is incredibly prevalent in cancer patients, so I’ll explain these terms through that lens. 

[00:04:13] [Music Ends] 

[00:04:13] We’ll start with the copay because most of us have them. A copay [Chime] is a flat fee you pay every time you receive covered health services. For example, that could be a $30 copay when you’re seeing a primary care physician, or it could be $60 if you’re seeing a specialist like an oncologist. 

[00:04:32] Allie: Every time I go to the doctor, I either pay my copayment as soon as I get to the office, when I check in or when I’m leaving. 

[00:04:39] Lauren: Yep, exactly. 

[00:04:41] Allie: All right, what’s next? 

[00:04:42] Lauren: On top of your copay, you might also need to meet your yearly deductible. A deductible [Chime] is what you pay for medical care before a health insurance plan begins paying for your care. Some plans have both, where you’ll have copays that you have to pay at every visit, but you’ll still have a deductible you have to meet. 

[00:05:03] Let’s say you have a $3,000 annual deductible. You must spend that much before your health insurance company begins covering any charges. So, if you have cancer and your chemotherapy treatments are a thousand dollars each, you would reach your deductible after only three treatments.  

[00:05:20] Even though you’ve met your deductible, it doesn’t mean that your healthcare is going to be fully covered after that because of co-insurance, which is our next definition. Co-insurance [Chime] is the portion of your bill that you’ll have to split with your health insurance after you meet your deductible. For example, you might have to pay 20% of your bill while your insurance pays the other 80%. 

[00:05:44] If you have a thousand dollars bill for blood work, you could have a $200 out of pocket that you have to pay while your insurance pays the other $800. Out of pocket [Chime] is a perfect term to define here because it’s the amount of money that you have to pay for medical expenses that are not covered by your health insurance plan. Every time I go to the doctor and pay a copay, that’s considered an out-of-pocket expense. Out of pocket equals out of my own bank account. Every example we gave so far today where you would pay a copay or a payment toward your deductible for cancer treatment are all considered out-of-pocket expenses. 

[00:06:24] Allie: Okay, Lauren, this is a lot. So, how do these definitions and the way healthcare in the United States works actually impact a patient or a family’s financial wellbeing? 

[00:06:37] Lauren: If you’re not covered a hundred percent, you still have a portion of your treatment to pay. For some, it might not be a lot of money and others this could be a make or break for how you’re feeding yourself that week. 

[00:06:49] Then there’s all the other expenses that come into play outside of treatment itself. There’s transportation, there’s change in lifestyle, perhaps related to diet and exercise that do cost money. Sometimes there’s care that you may need or care that you may need to provide for your children because you are at doctor’s appointments. 

[00:07:07] Health conditions also could be surgeries that you need that cost sometimes hundreds of thousands of dollars not taking insurance into consideration. Doctors and patients are constantly fighting for medications to be covered, and regardless of the need, maybe even life-threatening need, they’re not always covered by insurance.  

[00:07:25] And this is why bankruptcy is totally possible from just health expenses alone. In fact, adults with cancer are almost three times more likely to file for bankruptcy than their peers without cancer. And cancer patients who file for bankruptcy have a 79% greater risk of dying earlier than cancer patients who don’t. That’s a very scary [Music] statistic. 

[00:07:51] Allie: After my conversation with Lauren about the definitions and implications of financial toxicity on patients and their families, I spoke with Eva to gain a better understanding of how the burden of treatment expenses can profoundly affect the wellbeing of those receiving medical care. 

[00:08:10] [Music Ends] 

[00:08:10] So Eva, based off of these statistics about bankruptcy and its correlation to mortality rates, what are some of these factors that make this true? 

[00:08:10] Eva: Let’s say you make the most money in your household and you’re the patient with cancer. If you’re a breadwinner, an illness like cancer can threaten your entire family’s wellbeing because everything that you’ve planned for and invested in, suddenly you can’t live the life that you planned or even pay for the commitments that you’ve made because now you have to commit solely to these expenses. 

[00:08:40] And then of course, there’s how much debt you had before or your loved one was diagnosed. Most Americans have debt and like I mentioned, also live paycheck to paycheck. Unexpected medical costs can throw off all plans for stability. And again, there are costs related to your cancer that aren’t even treatment specific. Most likely if you have cancer, you probably didn’t have a budget for transportation or hotels or change of diet or additional care. Budgeting for those things is almost impossible when you didn’t see something like this coming.  

[00:09:15] Cancer also affects your ability to work. Treatments can often make you feel more ill than the cancer itself. And then you add on the pressure of needing to make money. That’s if you’re able to work at all. We’re using cancer as an example, but this can be true for so many different illnesses and conditions. On the flip side, we also have people in the household who may have to care for that person with cancer. They may not be able to work at all because of their caregiving requirements, which we’ve seen often in the [Music] Caregiving Soul episodes. 

[00:09:49] Allie: Cancer’s financial burden is just the tip of the iceberg. In our conversation, we barely scratched the surface of the emotional, physical, and mental strain this type of diagnosis can bring to a patient and their loved ones. Unfortunately, we don’t anticipate, or budget for life-threatening diseases like cancer until we’re faced with them. It’s a common reality most people are not prepared for. The compounding stress while also navigating exorbitant medical bills that insurance may not fully cover, can lead to devastating circumstances. 

[00:10:29] [Music Ends] 

[00:10:29] Eva: And the sad truth is that this is why most Americans would diagnose our healthcare system as broken, because we’re under the notion that a healthcare system is supposed to support and save its members from harm. And instead, it can be detrimental to our wellbeing in numerous ways. Of course, there are times where our healthcare system is helpful, undoubtedly. That’s why a lot of us are here today because medicines and treatments have literally saved us. But we can’t ignore the fact that the financial stress that our healthcare puts on us can have a huge impact on our health. 

[00:11:04] Allie: I also think we have to touch on the assumption that we can all pay for our care. 

[00:11:08] Eva: So, we’ve talked about the financial burdens of treatments and medications and care in general, but we haven’t talked about when the burden is so great that you decide to not even invest in care. Like you decide that, you know what? I can’t even consider that treatment or medication because it’s too expensive, so I’m just gonna be sick, or have a condition for the rest of my life, or die.  

[00:11:33] Americans choose literal pain and sometimes the possibility of death because the financial implications are worse for them or for their families. This is where our system being broken [Music] really comes to light.  

[00:11:50] Allie: As we’ve already discussed, navigating healthcare related finances can be incredibly difficult and common. These issues touch all of us and our families. 

[00:12:02] Steven Reichenberg spent much of his career working as an executive in health insurance at large companies, including Cigna and Blue Cross Blue Shield. But when he was diagnosed with stage four lung cancer at 55 years old, managing his own health expenses and insurance plan was far more complicated than he could have ever imagined.  

[00:12:26] [Music Ends] 

[00:12:26] Steven: I used to be a normal family with a working job and I had employer provided healthcare, but I did leave work. I did pretty well, mostly because I was able to get financial aid as someone who was no longer employed, cuz chemo and immunotherapy are just ridiculous. I mean, it’s like $30,000 a pop sometimes, and that was multiple times a month. 

[00:12:49] Once I’m on disability for two years, they force me over to Medicare. That really becomes my only option. And there’s nothing for me to request financial aid for anymore, so now I’m forced to pay more money [Music] for no reason whatsoever. 

[00:13:06] Allie: Steven’s success as a stage four cancer patient is much in part to his ability to access and afford high quality treatment, as well as his remarkable mental resilience in managing stress. Although the path hasn’t been without its challenges, his understanding of medical billing has empowered him to explore avenues for alleviating financial burdens and stressors.  

[00:13:32] [Music Ends] 

[00:13:32] Steven: The whole healthcare financial system of America really needs to be reevaluated. [Laughs] But you have to fight insurance companies for all the same reasons you had to fight ’em before. Just the concept of healthcare and networks, it’s like, they don’t, they don’t blend well together cuz networks are totally financial entities where healthcare is a human entity and when you mix the two, there’s always the human that’s gonna get the short end of the stick, you know? So again, if I wasn’t knowledgeable, I would’ve ended up paying more, and not known it. 

[00:14:05] When you get a medical bill, the first thing you do is not pay it. The second thing you do if you’re not getting financial assistance, cuz of a situation like mine is you call them up. First off, make sure it’s accurate. Make sure they adjudicated your claim right. Easier said than done. A lot of people don’t know how it all works, so they can’t check to see if their claim was processed correctly. 

[00:14:27] But even if you can’t tell was processed correctly, and the claim’s a hundred bucks, if you call the insurance company and you say, “I can’t afford a hundred bucks”, they’ll probably say, “Well, if you can pay me 70, I’ll take 70 and we’ll wipe the slate clean”. And that’s the thing people don’t know that. You can definitely negotiate with your healthcare provider, maybe not your doctor’s office, but if you’re going into the hospital for a procedure, absolutely. It can’t hurt to ask. [Music] I’m not my best advocate, I’m my only advocate. [Laughs] 

[00:15:03] Allie: Based off of this discussion and a lot of discussions we’ve been having at Empowered Us and at Good Days as a whole, there are so many takeaways we can start with. But I would say number one is something you can do today. Start to get educated on your own healthcare plan. 

[00:15:20] If you are lucky enough to have health insurance, be aware of what your copays and deductibles might be. Click around the website. Make yourself an account if you haven’t made one already, and just become more aware of your benefits. Once you’re more aware, you can make more informed decisions and choices about your own care. 

[00:15:40] We understand that a lot of people learn in different forms, so there will be a corresponding blog to this episode where we fully define the terms and also provide different tips and resources, whether they were mentioned today or in addition to that. So, check it out on empowered us.org. We’ll link it in the show notes. 

[00:15:58] Also, if you found this episode to be informative and impactful, please share it with anyone else that you think may need to learn about this. It may fill in some of the gaps of their knowledge. 

[00:16:10] We at Empowered Us are committed to advocating for affordable healthcare for all. We look forward to continuing these conversations with patients and experts to both educate and create new solutions. Let’s keep pushing for change together. Take care and see you next time.  

[00:16:30] [Music Ends] 

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