2 prescriptions to lower medical bills

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More than 6 million Americans have lost jobs since the recession began in December 2007, and for many, the loss of a job means the loss of health insurance benefits.

Even for those who still work, many companies are dialing back health benefits for employees. For instance, about 58 percent of small U.S. employers offered health insurance for their workers five years ago, but that number has since fallen to 47 percent, according to the Council of Smaller Enterprises in Cleveland.

While Congress works to reform the health care system, millions of uninsured or underinsured Americans just need cheaper health care. Fortunately, affordable consumer options are expanding. For those who want to take health care matters into their own hands, consider these two unconventional alternatives to the standard employee-sponsored health insurance.

Direct-care medical homes

For several years, boutique medical practices have offered increased access to physicians and round-the-clock care for a premium cost. Now, a new crop of medical practitioners eschew the word “boutique,” as well as insurance companies, and offer affordable monthly fees catering to middle-class patients.

“It’s like joining a gym where you pay $50 to $75 a month, but instead of exercise machines, there’s a doctor and an X-ray machine and other medical equipment,” says Chris Free, co-owner of Rapport Benefits Group in Tacoma, Wash., which helps businesses and individuals choose health care options.

One such clinic, Seattle-based Qliance Medical Management, calls itself a direct-primary-care medical home. In lieu of insurance, Qliance members pay a monthly membership fee ranging from $39 to $79, determined on a sliding scale based on age. In return, they receive unrestricted access to all routine care, including blood tests, women’s health services, pediatric care, broken bones and ongoing management of chronic illnesses without ever paying a co-pay or receiving a bill in the mail later. The affordable monthly payment could allow consumers to save more for larger health costs, such as unexpected surgery.

While direct-care medical homes like Qliance are fairly new, Norm Wu, president and CEO of Qliance, says his clinic has identified approximately 75 clinics in 17 states that allow direct payments (rather than billing insurance). Of those 75, about half “have very affordable monthly fees, well below $100 per month,” he says.

Joining a direct-care medical home can eliminate the need for full-coverage health insurance, but most consumers will still need a health insurance policy for catastrophic care, such as unforeseen surgery or hospitalization. “Instead of buying insurance for $300 a month, you can go to a (direct-care) medical home and buy a cheaper insurance plan with a high deductible,” Free says.

Wu estimates that the price of a monthly membership combined with the premium on a high-deductible insurance policy to cover expensive, unforeseeable health events can still be up to 50 percent less than traditional low-deductible health insurance. For example, a 35-year-old male who has a $2,500-deductible health care plan for $500 per month, or $6,000 per year, could join Qliance for $49 per month, or $588 annually. An insurance plan with a higher deductible could carry a premium as low as $250 per month, or $3,000 per year, capping costs at $3,588 per year. That’s a 40 percent savings even without including co-pays, which are not a part of the direct-care medical home model.

Relying on a direct-care medical home for primary care can make sense financially, but there are some limitations, says Petra Perkins, co-owner of Rapport Benefits. For instance, a membership often doesn’t include prenatal care, so it might not be the best option for a family planning to have children. Before joining such a group, Perkins recommends asking questions and reading the fine print to make sure the services you need will be offered.

If you’re looking for a membership-based medical home, be prepared for a little confusion. While clinics like Qliance are known as medical homes in some circles, the term “medical home” is also used to describe “a new way of branding all primary care practices (that) build on making primary care the natural entry point to the health care system, rather than emergency rooms or specialists, for everyone for nearly all health care issues, except for truly urgent emergencies,” says Carl Cooley, a pediatrician and medical director at the Center for Medical Home Improvement, in Concord, N.H.

This model still relies on payment by insurance companies rather than direct payment by consumers and includes incentives from insurers for primary care practices to provide more proactive, coordinated care. This broader use of the term “medical home” has been mentioned in congressional health care reform discussions and may mean a search for a direct-care, membership-based medical home will turn up many clinics that don’t fit that description.

Health care cooperatives

Consumers who want to take charge of their own health care while saving some money have another option — to join a health care cooperative. Some consumer-owned health care co-ops provide prepaid health care services to their members, while others may pool resources to purchase health insurance at a better rate.

When you join a co-op, you become an owner, so each member can participate in decisions about how the co-op is run. “Any savings of the co-op are returned to the consumer in the form of lower costs or better services,” says Mary Griffin, senior policy adviser at the Washington, D.C.-based National Cooperative Business Association. “The focus is on their needs rather than the needs of outside shareholders.”

There are several types of health care co-ops, Griffin says. They include:

  • Consumer co-ops, which are made up of consumers to provide goods and services otherwise not available to them at a reasonable price and quality.
  • Producer co-ops, such as farmer co-ops, which include producers of a like product who pool their resources and market member goods in order to leverage greater bargaining power with buyers.
  • Employee-owned co-ops, which are businesses-owned and controlled by their employees, who are also the members.

While each co-op is different, the right mix of ownership and strategy can offer financial savings for members of the group. “But the level of savings depends on the type of co-op, the state and the market,” Griffin says. “For example, 51 percent of the farmers who joined the Farmers Health Cooperative health insurance purchasing cooperative in Wisconsin saw their premiums for health care drop and two-thirds have a better policy than before because of the group purchasing power of the co-op. On the other hand, GroupHealth in Washington reports their premiums are lower but not significantly lower than the competition.”

And different types of co-ops are more readily available in different parts of the country. If you’re looking for consumer health care co-ops, “you will have more luck in the Midwest and Pacific Northwest,” Griffin says.

Before joining a co-op, “make sure there’s someone who can explain all the benefits to you,” says Rapport Benefits’ Perkins. “You don’t want any surprises on fees.”

Also make sure you understand what will be covered in case of a catastrophe. “Some co-ops will offer care by a primary physician, but may or may not have specialist or hospital coverage,” Free says. “If those things aren’t covered, you may need a combination of a co-op and a catastrophic insurance plan.”

Griffin also recommends looking into how the co-op is governed, which insurance companies the co-op purchases from, what services are available, and what the premiums and deductibles have been over the past few years.

“As with anything, you need to comparison shop,” Griffin says. “Of course, the nicest thing about being a member of a co-op is that if you don’t like their policies, you can do something about it.”

You can compare health insurance quotes on Insureme.com, a Bankrate company.