How to Healthcare: The Basics

by Kayla Cherry

As millennials make the transition from college to full independence, they need to learn about their health plan options. Unfortunately, most colleges don’t build this essential facet of financial literacy into their curriculum–before interning at MDsave I literally had to watch YouTube videos about health insurance to understand how it works. Speaking of which, more and more young people will enter their first job and find themselves on an HDHP (high-deductible health plan), which means that they pay out-of-pocket for any healthcare costs that come up until they reach their deductible (which 80% of people don’t reach, by the way).

Regardless of whether you already take care of your health costs or will soon take over that responsibility from your parents after college, do your research on your options. Many startups have endeavored to deliver price transparency tools so that just by looking at options on their websites, you can find more fair cost options for any treatment you may need regardless of your insurance situation.

Don’t worry–to save you the effort of researching on your own, I’ve laid out the important stuff for you. I know you’d much rather spend your tangential Google search time looking up “The Rolling Cheese Festival of 2018,” or “Where can i buy a sleeping bag suit” instead. Or maybe that’s just me.

 

Things that you should know:

Source: Committee for a Responsible Federal Budget, “Key Takeaways from the New Health Care Spending Outlook.” http://www.crfb.org/blogs/key-takeaways-new-health-care-spending-outlook

 

The Center for Medicare and Medicaid Services (CMS) reported that health costs currently grow faster than the United States GDP and will continue to do so (1).  This means that, according to Forbes, millennials will have to spend two-thirds of their income on healthcare.

See that blue line? That’s our country’s national healthcare expenditures projected to 2024. See that green line and how it’s below the blue line? That’s our GDP. Hear the sound of employees happily paying out of pocket for care? Me neither: 27% of millennials reported in a survey that they would put off visiting the doctor to avoid high costs (2).

 

Source: MDsave

Today’s insurance won’t save us either. Employers are adopting HDHPs at double digit rates because they shift payment responsibility from company healthcare expenditures to the employees. The pro of HDHPs is that premiums–the monthly fee for health insurance coverage–is typically lower. The con is that you will pay out of pocket and probably never reach your deductible (the point at which your employer pays for your healthcare). It’s no wonder that 25% of working-age adults have high healthcare costs relative to their incomes (3).

 

The healthcare model everyone should follow

My personal experiences of avoiding treatment for depression and delaying doctor’s appointments that prolonged ankle injuries have taught me the importance of healthcare, and when I learned that a startup called MDsave aligned with my values of seeking treatment by incentivizing it with fair prices, I jumped at the opportunity to intern there.

Through my internship at MDsave, I’ve learned about healthcare from a new perspective. The company negotiates with providers to create bundled care for procedures and medication so that people can buy the bundles on their website. By partnering with providers, MDsave offers price transparency so that “consumers” can compare costs for the same procedure among different hospitals in their area–which sometimes vary by hundreds of dollars. The whole process reminds me of Amazon, but for healthcare. Hospitals agree to discount their care bundles with the assumption that they will make up for it in the increased volume of patients seeking lower-priced care. As an economics major, I love the idea of competition driving down unfair prices. Lower prices also means that more people will choose to seek treatment rather than letting cost get in their way.

 

THIS IS NOT A DRILL

I cannot stress enough the importance of getting checkups and screenings now. Scheduling annual doctor’s appointments may sound unnecessary to healthy millennial, but a fair amount of chronic conditions actually show their first symptoms at our age (3).

Source: MDsave

Source: MDsave

A 3D Mammography costs $560 on average. Even better, the MDsave bundled mammography costs $309 on average. Meanwhile, the lifetime cost estimates of treating breast cancer after catching it at Stage IV averages to around $125,000 (4). Check out the graphs. That’s worth 323 MDsave screenings. One screening can save you the cost of 322 more.

 

 

Cost for 1 year of Stage IV Breast Cancer Treatment

Source: MDsave

Chronic and mental health conditions take up 86% of our country’s $2.7 trillion annual health care expenditures. Catching illness early can save you a lifetime of care expenses and even your life. Out of all the things to procrastinate on, please God don’t throw your health into the void of future responsibilities.

About the Author: 

Kayla Cherry studies English and Economics at Rice University, and has had the pleasure of interning at MDsave for the summer of 2018. She plans on learning about the intersection of social impact and business as a consultant after undergrad. When Kayla isn’t lamenting the current healthcare system, she enjoys baking, drawing, and playing soccer with friends.

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