Thursday, June 20, 2019

Medical Bills, New and Somewhat Unexpected, For Things Entirely Routine

Bottega Veneta wallet (affiliate link), on sale at Net-a-Porter. While this is super-fancy, I spent far more than either the full price or sale price on fairly routine medical expenses in Q1 2019!

Much as it was for Luxe and many of her readers, the first quarter of 2019 was also an expensive time for me. Some of the spending was for fun reasons. I booked and paid for a few things related to my recent Maui vacation, and I also did a fair bit of shopping, particularly in February. A lot of the spending was for significantly less fun reasons, including taxes (I owed over $2000 to the IRS) and various medical bills, including at the optometrist for new glasses and contact lenses. But that was far from my only doctor or pharmacy bill that quarter. And none of the bills were for anything but the most routine or mundane of things, I never got sick or anything like that!

If you've been reading here a while, you might have noticed that I really, really like to complain about healthcare costs in the US, to an extent that might be entirely out of proportion with what I've actually needed to pay for. I've been lucky to have been in fairly good and uncomplicated health, except for one accident and the accompanying emergency dental work. Even that was far from as bad as it could have been.

Nonetheless, I basically write here about almost every single medical bill I encounter that's more substantial than a doctor's visit co-pay (~$25 for a general practitioner and ~$40 for a specialist on most of my insurance plans as a working adult). Maybe all this complaining is tiresome or tedious, but I just think it's important for us to remember that this isn't normal, things are different in many other countries. And this whole mess is among the many reasons why it's so important to vote, if you legally can. I'm also well aware that there are many far more important injustices than the minor indignities I've endured (the rising cost of insulin, for one). Plus, I think it's absurd that I - an attorney who regularly navigates multi-million dollar commercial disputes as part of my job (generally involving sets of multiple interrelated contracts spanning 100s of pages in total) - can only rarely make heads or tails of why I'm being charged a certain amount, even though I make considerable efforts to identify and review the documents setting out my coverage. 

Another "Latte Factor" Digression

To me, this topic also relates to larger questions of economic justice, and frustration with certain viewpoints in personal finance discourse. I'm talking about those rather un-charming individuals (and banks, including my own) that blame people's smaller personal choices, on things like coffees and avocado toasts, for their financial woes. Never mind that the math doesn't check out, typical life-ruining financial difficulties in the US are generally in amounts several orders of magnitude in excess of what anyone has ever spent on coffee or avocado toasts, certainly in a year, possibly even in a lifetime. And yes, I've been quite grouchy about this recently.

I say all this, by the way, as someone who deeply appreciates the importance of tracking one's spending down to the penny, enough that I can't resist any opportunity to proselytize about its virtues anytime one of my friends (both online and off) expresses even a slight interest in the topic. I even credit my use of (old, non-subscription) YNAB, to track and categorize my spending by individual transaction, with having a transformative effect on my spending and consumption habits. It almost immediately cut my careless Sephora, Amazon, and (R.I.P., they had consistently good prices) shopping, which had accounted for a shameful total in my early years as a law student, down to reasonable levels actually commensurate with my needs. For example, I used to comfortably exceed the Sephora V.I.B. spending threshold of $350/year without fail, and my online account even said I got close to V.I.B. Rouge's $1000/year hurdle once (though I think their calculation was wrong). Post-YNAB, I very quickly stopped getting anywhere close to V.I.B. status. So I'm well aware of the potential benefits of how "personal responsibility" (i.e. tedious and sometimes hard work, in the form of recording expenses and then cutting back certain spending categories) can result in a significant and beneficial overhaul of one's budget.

By tracking every single transaction without fail, one gets a true picture of one's total spending, and some of the details may be surprising. It often seems to be the case that people who try it out for the first time quickly learn the same lesson I did. Specifically, they might realize that they had quite a few categories where some careless, unthinking spending was occurring, which wasn't bringing them as much value or utility as the money they were putting in. Sometimes, all this low-utility spending represents a significant total. (That's generally the story at the heart of many posts in r/ynab raving about how the app is life-changing.) Before I started, I would have described myself as a reasonably careful spender, but it wasn't until I started tracking my spending that I learned this wasn't originally the case, and that I had some significant cuts I could make almost immediately without causing any discernible change in my lifestyle. But at the same time, none of this work was ever going to be enough to make any real dent in the actual cost of my legal education.

The financial albatross around my neck, my biggest monthly expense by far, and the thing that could have been life-ruining, but for luck (defined as a combination of preparation/hard work and opportunity/mostly random chance), is, unsurprisingly, my student loans. The numbers at issue there are the kind that no amount of cutting back on lattes and avocado toasts can completely fix. While in the private sector, for nearly three years total now, I've shoved in monthly payments of, on average, $3400. My current payments are now $3700/month and counting, a rate that requires ~35 more months of payments this exact size. With my student loan balance, I need to put in an extra ~$100 each month, every single month going forward, to cut just a single month off my projected repayment timeline. (All projections done using Lattes and avocado toasts ain't got nothing on that, if you ask me. That brings us to the medical bills. 

Medical Bills, Some New and Somewhat Unexpected

There I go again on one of my really long tangents before getting to the actual point of this entry, that I accumulated quite a range of medical bills in the first quarter of 2019, and all for fairly routine care, having experienced no accidents or bouts of illness. Despite not having been sick or injured, many of my medical bills were still for somewhat new and unexpected amounts. Many of these surprising line items were even for things of a type I'd used before, but they never cost so much until very recently. And almost everything on this list was covered by insurance.

I think this list of my surprising or unusually expensive medical bills from Q1 2019 provides a good case study for how it's becoming extremely clear, even more than before, that for contemporary Americans, the "latte factor" discussions from the likes of Chase Bank, David Bach, or Suze Orman simply miss the point. You can have all the "personal responsibility" in the world* and still be vulnerable to having your financial plans undermined by factors outside of your control. The expenses here are, ultimately, very small, because I'm a fairly healthy (knock on wood) working adult with no dependents, but the rate of the increase in costs in just a short time, for the same routine care I've been getting for years, is still, in my opinion, relatively dramatic.

And I think my list of somewhat unexpected and new medical expenses for mundane and routine things, infinitesimal as the amounts are in comparison to things such as the costs of housing, childcare, or higher education, is still enough to show how silly the people who take the "latte factor" seriously are being. Just like that, with a few sudden changes occurring almost all at once (mostly to my health insurance and its coverage of prescription medications, something outside of my control), I'm now paying close to the equivalent of an "extra-latte-every-weekday" amount in extra healthcare costs each month for some relatively simple, routine things. With regards to most of these expenses, I did just about everything "right"** (except for one thing I'll explain, but I made that particular mistake while doing my best to proactively respond to something I believed was set in stone by the text of my health insurance plan's policies).

My list omits all my co-pays for visits, as well as any prescriptions that cost $15/month or less in co-pays. Those are all routine things for which the price has generally held steady throughout my adult life, more or less. I've also omitted the expense of my new glasses, because I think it's already fairly well-known that there are many reliable, nontraditional options for getting new glasses far more cheaply, including Zenni Optical, Warby Parker, etc. My calculations focus on the estimated monthly cost of each of these mostly new and unexpected medical bills, so that one can easily compare them with the monthly cost of my fancy espresso and matcha drink habit
  • $18/month = $650***/36 months for supply of disposable daily contact lenses: This was technically the price for a year's supply, but because I don't wear contact lenses often (my eyes get dry and uncomfortable), my "monthly price" takes into account that what I ordered will last me three years. This item admittedly doesn't fit well with the rest of my list because the amount wasn't a surprise. To my knowledge, the price of "soft" lenses (so much more comfortable than the "hard" lenses I wore for years, by the way) hasn't changed considerably in recent memory. Nonetheless, I think it's a good reminder that, even before certain recent trends in healthcare costs, a lot of basic medical needs were already expensive, generally much more so than a latte here and there. 
  • $16.58/ month = $199/12 months for One Medical membership fee: This might also be controversial, as it's arguably a "luxury", not a "need", to pay for a "concierge" medical practice rather than find another doctor. My GP closed their practice and moved to One Medical, and because I wasn't interested in taking the time to find a new doctor, I was inclined to pay. Once I reviewed the supposed benefits, including being able to reach their office and get a prompt response by messaging in their app and the promise of getting appointments with little notice, I thought it likely that, if the company truly offered what was promised, I would get enough value that "membership" would be worth the fee. (Before, I needed to call 3-4 weeks ahead for appointments. And if I had a prescription problem, I'd play phone tag to get the receptionist, who'd pass on the message to the doctor, who'd contact the pharmacy, and the issue wouldn't be resolved for at least 2-3 business days. As far as I know, these were pretty common timelines in NYC.) And well, so far, One Medical has delivered: They've given me appointments with as little as 24 hours notice, and it takes as little as an hour for their office to respond to in-app messages and fix small issues with prescriptions. Also, if I wanted to continue seeing this doctor, there wasn't much of an option to not pay. I do resent this fee. That these benefits can only be obtained with this extra annual fee for "concierge" services may not reflect well on the American healthcare system. 
  • $25/month = $75 co-pay/3 month supply of Benzaclin: While I had never used Benzaclin, I had friends who were using it back in 2006, so this is not a new or innovative product. Had I been prescribed this as a teen or young adult, it'd likely have cost ~$10-$15/refill in co-pays. Prices for dermatology-related prescriptions have gone up dramatically in recent years, and I assume that the dramatically increased co-pays I've been seeing these past 2-3 years are related. I can blame the company formerly known as Valeant for ever instance in which I've personally felt this trend (Valeant companies make Retin-A Micro, Benzaclin, and Acanya, according to the packaging of each). Valeant is well-known for buying up rights to older medications and jacking up the price, and their price increases on dermatology pharmaceuticals are far from the most insidious ones they're responsible for. 
  • $12.50/month OR $21.67/month = $75 co-pay OR $130 GoodRx cash price/6 month supply of  Retin-A Micro: Now here's that mistake: I managed to incur both these expenses in Q1 2019 in an unlikely series of unfortunate events, admittedly facilitated by one error in judgment on my part (albeit one I maintain had a reasonable basis) and one separate moment of clear-cut carelessness. Oh, and like with Benzaclin, it's ultimately most correct to blame market forces, and also Valeant, for the size of this line item. Even if I was perfectly conscientious, I'd still have paid $75 for a six-month supply, no matter what. What happened was, with the recent update to my insurance plan's prescription drug coverage (they have a "three tier" co-pay scheme in which  covered drugs fall under Tier 1/Tier 2/Tier 3 for co-pays of $15/$35/$75 respectively, but actual co-pay amounts within each tier still vary, sometimes costing a bit less, sometimes a bit more; they reclassify drugs each year and sometimes drop certain drugs off the list), I thought Retin-A Micro was no longer covered. Tretinoin microsphere (Retin-A Micro) had been removed from the list, though Tretinoin (plain Retin-A) remained. I've used the Micro for a decade, so I wasn't about to change, and I knew from recent experience that calling my insurance company would get me absolutely nowhere. So I decided to pay the GoodRx cash price, approximately $130 at CVS, and move on with my life. I pick up my medication,  and am glad that the GoodRx coupon works. In the meantime, I'm waiting for insurance approval for the Benzaclin and getting automated "pending insurance approval" texts from CVS. When I finally got a "your prescription is ready" text for two items, I went to pick up what I thought was the Benzaclin and Spironolactone**** and didn't check the receipt, or inside the bag, until I got home. Lo and behold, it was Benzaclin and... Retin-A Micro... which was covered after all, at the Tier 3 co-pay of $75. And that's the last time I ever try to proactively solve potential problems I believe my health insurance will send my way, based on my reading of their documents! 
  • $39/month = monthly co-pay for Yasmin: This particular problem has been brewing for nearly a year, so maybe this technically doesn't count as a new surprise. But then again, I've had a different co-pay (always well above $30) pretty much every other month since the trouble started, so I say it still counts! As it turns out, the brand-name Yasmin has always been a Tier 2 drug, so back when I was paying considerably more than $35/month, it was something to do with the prescription deductible. My co-pay eventually dropped to ~$35/month, only to climb back up, for reasons unknown, to ~$39/month in early 2019. (And don't quote me on my explanations of anything to do with insurance coverage. Even as an attorney who often untangles sophisticated contracts for a living, I can't make head or tales of any of this!) 

Oh boy, that's a fun set of numbers! For context, let's keep in mind that a rate of latte and matcha consumption I consider reasonable is ~$42/month, one that starts making me a bit concerned about whether I'm making it a careless habit is ~$62/month, and one in which I'm pretty much the latte-a-day stereotype that makes all the David Bach and Suze Orman-types shriek is most likely ~$85/month. We can also throw in my bank's mysterious estimate and round up to $100/month as being in the realm of possibilities.

Out of all those expenses I listed, I'll drop the contact lenses from the calculation right off the bat, as I concede that the price for those likely hasn't changed recently due to market forces or what have you. I'll also pick the insurance price of the Retin-A Micro, not the GoodRx cash price, because the only reason the GoodRx price is an issue was my silly mistake. All the remaining "new" expenses together cost $16.58 + $25.00 + $12.50 + $39.00 = $93.08/month. That's the $100/month latte habit (which I think requires throwing in a few pastries), minus a little less than a latte and a half.

One might say, "oh, but those medical expenses still had a cost in the good 'ol days, before certain recent trends set in, it wouldn't be fair the compare the $93.08/month to zero, the prescriptions weren't free with insurance before!" Incidentally, I was too young to have a good understanding of typical health insurance conditions from before the Affordable Care Act ("ACA") passed in 2010, so when taking into account the "good ol' days", including pre-ACA years, I only have my memories of my parents' insurance coverage from that era to fall back on. Back in the good ol' days, I paid $10/month max for contraception, which is a number I'll use (but that number was often $0 after the ACA kicked in). I used to pay a max of $15 for both (a) a six month supply of Retin-A Micro and (b) around three months' worth of similar medications to Benzaclin. That results in $10.00 + $5.00 + $2.50 = $17.50/month for these same needs pre-ACA, and usually (but not always) $7.50/month after the ACA. 

That means that, in just the last 18 months or so, but mostly since the start of 2019, my routine healthcare costs have gone from $7.50 or $17.50/month to $93.50/month. That's a pretty significant and sudden increase of $86 or $76/month, both around what I'd likely spend if I get a latte every weekday. And all this as a young-ish adult in reasonably good health, while my healthcare needs haven't actually changed! I'm the exact category of person who wouldn't be expected to have any of these issues with sudden, dramatic increases in healthcare costs, being a fairly healthy (knock wood!), young person with no children or other dependents whose care I must pay for. One can only imagine the increased costs that come with needing to be responsible for multiple people's healthcare costs, if every single individual's costs can jump up like this!

Have you experienced any sudden and/or dramatical medical and prescription drug bill increases in recent years? Does anyone have experience with more successfully pushing back on their health insurance company when things are confusing or seem to contradict the terms of their coverage? (If anyone was able to educate me on how to better interpret health insurance documents and communicate with my health insurance company, I'd certainly be absolutely thrilled, even if it would cast doubt on some of what I've written here.)

*Heck, even many biglaw attorneys (a demographic so well-compensated no one currently in it, or anything close to it, could ever legitimately complain about their finances) have, in recent memory, experienced their out-of-pocket medical expenses shooting up suddenly and dramatically, to an extent that cutting back on lattes definitely will not fix, for reasons completely outside of their control. Firms have become fond of attorney health insurance as an area for major cost-cutting, often instituting both  increased premiums and significantly increased deductibles at the same time.

**There may exist people who would say that having my (and my doctors') choice of contraception, or acne-combating prescriptions, is a "luxury". They may also think that people for whom these things are a difficult expense should do the "responsible" thing by going without. They may also be the same type of people who would sneer at the apparent "extravagance" of spending larger amounts on something as "unnecessary" as "physical appearance" or the skin on one's face. (Suffice to say, personal finance-oriented Twitter and Reddit can be wild and wacky and highly judgmental places!) But none of these prescriptions are new or innovative medications, they've all been commonly used since well before I first became familiar with them around 2009, when my skin was at its worst and I started using the Retin-A Micro. 

***This was the price for ordering directly from the manufacturer through my optometrist, after factoring in a $200 rebate. I think it may be slightly cheaper to buy online from somewhere like 1-800-Contacts, or similar online retailers, most of whom also offer cash-back on Ebates for an additional discount. 

****Spironolactone is a Tier 1 drug, and should cost nowhere near $75/refill, so that should have been a red flag for me to look at the receipt closely, or ask the pharmacist what was up. I'd been feeling disempowered and confused by (a) what I thought was the sudden change of Retin-A Micro being dropped from the covered drugs list and (b) the multiple months of confusion I'd already endured with my contraception, where I was being charged wildly different co-pays what felt like every other month, and none of multiple (polite) calls I made to the insurance company, or multiple (also polite) chats with my pharmacist, ever got me consistent basic answers about why I was getting such wildly different co-pays. 

Thus, I'd come to expect bizarre and expensive changes to my prescription co-pays at every turn, and I'd long since decided that it just wasn't worth my time to keep calling my insurance company, unless things got ridiculous and the co-pays continued climbing to a point I could no longer tolerate. On the day of the $150 pickup that turned out to be Benzaclin and Retin-A Micro instead of Benzaclin and Spironolactone, I distinctly recall thinking something like "@#$#%! The Spiro too?!", but decided I'd deal with it next month. And being able to react that way is an incredible privilege, I know. 

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