You Owe $1 Million

John Stockman begged the doctors to let him die.

At the time, the 62-year-old Tennessee resident was on heavy painkillers and hallucinating. But make no mistake, his pain was real.

In the months previous, John had gone through his own personal hell.

He lost four feet of his bowel in an emergency surgery to remove a blood clot. His heart stopped and had to be restarted. For weeks, he lay in intensive care with an open belly wound.

John was in so much pain, and on so many painkillers, he was barely alert during this whole period. But that didn’t stop doctors from asking him to sign off on expensive, life-changing surgeries.

As John told the Wall Street Journal, “I was signing off on surgeries but I had no idea what I was doing.”

When John was too heavily sedated to handle his own affairs, it fell on his 25-year-old wife, Rhea, to manage his care.

John’s condition was so severe that he had to be airlifted from his home in Tennessee to UCHealth in Colorado Springs. Rhea was worried about the costs but their caseworker assured her it would be covered — yes, it was out-of-network (way out-of-network) but Cigna would cover those costs because it was an emergency.

That was enough for Rhea. Her husband was dying and he needed help now. They could worry about the money after.

Then the bills started coming.

For just the first day of treatment, UCHealth charged John for 20 separate services.

For a “metabolic panel,” the Stockman’s would pay $421.46. For a contrast scan, $5,496.18. For the first 30 minutes of John’s care, he was charged a “critical-care fee” of $7,185.40.

There were 17 more equally ridiculous charges. And that was on the first day of months of care.

At first, Rhea tried to pay off the bills in good faith. But they kept coming after she had paid well over their family deductible of $13,300. There were charges from independent physicians, pathology, anesthesia, pathology, and the radiology department.

By the time John had recovered, the Stockman’s had amassed 66 pages of bills, amounting to more the $1 million.

Smoke and Mirrors, Blood and Dollars

John and Rhea didn’t know it at the time, but they were being billed way above the normal rates.

You see, insurance companies and Medicare pay much less than advertised for medical services. That’s because a big health insurance company like Cigna represents upwards of 80 million customers. And that gives them the power to negotiate.

But because John went out-of-network, UCHealth was charging the Stockman’s the chump’s price. And according to a 2015 study, out-of-network charges can range from 118% to 1,382% of corresponding Medicare fees.

For example, that $7,185 charge John paid for critical care? Medicare would only pay about $230 for the same service.

But Cigna told Rhea they’d cover these charges, right?

Well, when it came time to pay the piper, Cigna balked at the million-dollar price tag. They generously offered to pay just $190,314.15 of the bill, leaving the Stockman’s with a balance of $700,143.61.

Cigna said it could only cover what was defined as “reasonable” out-of-network charges. Apparently, the other 700k was “unreasonable.”

Speaking of unreasonable, how did the hospital respond to the Stockmans objections?

They told John and Rhea to apply for financial aid. They did and the hospital reduced their bill by 25%. But at that point, they would not budge. They tried to pressure John into a two-year payment plan to recoup the costs.

Two years.

With interest, they were looking at payments of $22,000 a month.

“I mean really, who can afford that?” John told the Wall Street Journal.

Not many folks would, John. But that’s the state of the U.S. healthcare these days. Hospitals and big pharma have been dealing with insurance companies for so long they have no idea what a realistic amount of money is.

I mean these are the same maniacs who charge $700 for a six-liter bag of salt water for an IV.

A Happy Ending (Sort of)

In March of last year, the Stockman’s discovered that Colorado had a law on the book that requires insurers to cover the balance of out-of-network emergency costs.

With this fresh ammunition in their quiver they were able to restate their case to Cigna. And a few months later, the health insurance giant revised its decision and paid the balance of $573,262.23.

John said he felt like he won the lottery. But as a final insult, UCHealth misfiled the payment and sent the bill to collections, who began harassing John and Rhea.

Eventually, these bills were sorted too. But the experience left the Stockman’s disillusioned with the whole system.

“The healthcare system is broken,” John told the Wall Street Journal. “The whole system rained down on us.”

If you think about though, John and Rhea got lucky. If John had been taken to a hospital in another state, one without that particular law on the books, they would have been liable for the full amount.

And there would have been nothing they could have done about.

All the best,

Owen Sullivan

Owen Sullivan
Editor, Money & Crisis

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Written By Owen Sullivan

Owen Sullivan isn’t a millionaire or one of the Wall Street elite. He was just one of the many folks who was hit hard when the housing bubble burst… and decided he was never going to let that happen again. Since then, he’s worked with industry experts to develop strategies and techniques to bulletproof his finances — and yours — against the next crisis. His methods don’t require years of financial experience. These are simple strategies that anyone can follow. After all, financial prepping shouldn’t be reserved for a select few.