A Modern Health Insurance Plan Can Save Customers Money

Ross Klosterman is CEO and co-founder of Poppins Health of Columbus, a new health plan for small businesses.

To the question “Why do mutuals exist?” A reasonable person would probably answer that the role of health insurance companies is to use their influence to negotiate and keep health care costs low for members.

That same person could then be enraged to discover that as a single person with no bargaining power, often times they could potentially end up pay less out of pocket for medical services than what insurance companies negotiate on their behalf.

Which brings us to the next dubious but common scenario: A family of four pays an average of $22,000 per year for the insurance, in addition to an approximate deductible of $5,000 even before the insurance takes effect. How did this become the norm in the United States?

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The answer may lie in the breakdown of health care prices. The vast majority of knee and hip replacements are done with “in-network” providers (i.e. insurance has negotiated with them). Therefore, the total price – and ultimately what members pay out of pocket – can vary widely, even within the same establishment.

Ross Klosterman is CEO and co-founder of Poppins Health of Columbus, a new health plan for small businesses.

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According to recent data, the cost of the same procedure at a San Francisco hospital ranges from $22,865 to $101,571. Since each hospital and insurance company has a different process in place to determine the costs of the procedure, a patient may end up paying thousands of dollars more than someone else in the same location.

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