Retirement Healthcare Planning: What is Medical Cost Sharing and How Can it Help my Retirement?

How do I save money on healthcare during my retirement? What is Medical Cost Sharing? What Medical Cost Sharing Organizations should I choose? In this video, Troy Sharpe interviews Grace Gosnell on what exactly Medical Cost Sharing is and how it can benefit your retirement healthcare planning.

The Interview: 

Troy: It’s pretty common to see health insurance costs for a 60-year-old couple, around $2,000 a month if you retire prior to Medicare. We’re going to talk to Grace Gosnell today where she sees often a 30% to 50% reduction in healthcare costs for those that retire before Medicare age. We’re going to talk about that, how it works, and also get into some of the tough questions with her today.

Hi, I’m Troy Sharpe, CEO of Oak Harvest Financial Group, certified financial planner professional, host of The Retirement Income Show, and a certified tax specialist. The big question you probably have is, is medical cost sharing for me? I’ve never heard of medical cost sharing. What exactly is it, and can it save me money? Grace, thank you for coming on the YouTube channel today.
Grace Gosnell: Thanks for having me.

Troy: We did a radio show recently, if you haven’t checked it out, check out The Retirement Income Show. We talked about the ins and outs and we had an opportunity for almost an hour-long conversation. In a nutshell, what is medical cost sharing and how can it benefit people that retire prior to Medicare age?

Grace: Great question. Medical cost-sharing is an alternative to traditional health insurance. I find that it works great for people who find themselves to be generally healthy, like most of us, everybody’s got a little something here or there, but most of us who are generally healthy are going to be a pretty great fit for it. It’s good for people who are finding themselves really crunched by those numbers of $1,800 to $2,000 a month on health benefits. That’s not attainable when you’re trying to prepare for the rest of your life, you’re not at Medicare yet, but you need that bridge.

Troy: 30% to 50% is what we talked about. Sometimes you see more cost savings than 50% when compared to health insurance for somebody retiring in that age 60, 62 range. Big question, how do they get the cost savings? How are people able to save that much when it comes to making sure their medical needs are taken care of as compared to health insurance?

Grace: With medical cautioning, we’ve removed a lot of the red tape. There’s not this huge billing department that’s going to just automatically deny the first claim that comes in. We’re there to collect money each member pays in each month, and those funds are what are used to pay for community medical needs. That’s really what those are only used for. It’s a much more transparent process.

Doctors are getting paid quicker, patients are getting treatment faster, and it really creates a fantastic outcome where when we go in and we say, hey, I’m just a self-paying patient, part of a larger medical cost-sharing community that’s going to help me with these bills, doctors often reduce the price of those bills a significant amount. I’ve seen up to 80%.

Troy: I know personally if I go in and I offer for cash pay or if they have something that’s for cash pay over the course of my life, a significant reduction-

Grace: It is.

Troy: -in what they charge you if you have cash to pay or if you’re going to use health insurance.

Grace: Of course.

Troy: One of the things that I like about medical cost sharing is they remove essentially the third party company, the health insurance from the negotiations with the hospital or with the medical providers. You, the consumer, and then you guys on the medical cost-sharing side. Now let me say this, so Grace is an independent, I don’t know if you call it broker or?

Grace: Yes, that’s a great way to put it.

Troy: Independent, so she works with many different medical cost-sharing communities. There are some that obviously are better than others, I would imagine. You’re not just representing one, but we’re talking about the entire community. Essentially, the combination of all the different cost-sharing communities. Removing the third party, that health insurance company, and then allowing the consumer to negotiate directly with the medical providers. Then also there are people that help negotiate with the individual medical cost-sharing communities. Correct?

Grace: Of course. If you or I go into the doctor, we ask for a cash price, that’s easy. A surgery on the other hand, that’s a little more daunting. We’ve got a whole team of experts there who are not just going to leave you high and dry. They’re going to be there to really handhold you, make sure you’re getting a great experience. If you even need help finding a provider, they’ll be there for that as well. It’s there to be a more well-rounded experience. You’re not just a number on the back of a card, you’re a real person and you should be treated that way.

Troy: Big question. What if someone gets cancer? After they’ve paid into the cost-sharing community, are they going to get the coverage? Are they going to get the treatment that they need? How does that work?

Grace: Like anything, cancer obviously being one of those worst case scenario types of situations. It still should be a shareable expense. As long as it wasn’t pre-existing prior to membership, that’s what this is for. There’s no sense in paying into something if it’s not going to be there for you when you need it and cancer like anything else, that’s something that’s going to be a shareable expense. You’re not going to be kicked out because you had a super high claim. Everything lives in a bell curve at the end of the day. We expect those.

Troy: Have you ever seen a person that did have a significant medical need that was not preexisting, that developed once they joined the medical cost-sharing community, not get the coverage or treatment that they needed? Is that something you’ve seen?
Grace: I’ve never seen that happen, fortunately, which I think speaks to the magnitude of what medical cost sharing really is. I’ve never seen that happen. I’ve had large needs myself, I’ve heard from members who’ve had large needs after the fact, after their treatment got taken care of and they said, my gosh, this was a better experience than I could have even imagined.

Troy: You tore your ACL, correct?

Grace: I did.

Troy: Were you part of the cost-sharing community whenever you did that?

Grace: I sure was. Surgery, I was up in Canada when it happened. That didn’t matter where I was, it was still shared. Bills from really the first emergency room trip up in Canada, all the way through surgery back here in Texas. Physical therapy, the whole nine yards. They took care of me.

Troy: All of that was covered. The surgery itself, did it take place in Canada or you came back?

Grace: No, I was back here, fortunately, but yes, recovery, they put you in those fancy braces, and what have you. All of that was shared with the community.

Troy: What was the experience like in regards to filing a claim, dealing with the medical cost-sharing community, or dealing with the providers? Can you walk us through what that experience was like so the people watching this video, so you watching can understand what that experience or what they may expect if they were to have a claim?

Grace: Certain things, my doctor’s visits, for example, those were about 120 bucks a pop at the orthopedic surgeon. Those little things I just was paying for, and submitting the bills later. When it comes to something like a surgery, many of the cost-sharing companies now have programs where if it’s going to be over a certain dollar amount, they can advance you those funds so that you’re not putting a huge amount on the credit card. My surgery all in total was about 12,000 bucks cash price. That’s really not that bad.

Troy: Did you pay that or was that the total cost for everything?

Grace: That was the cost for the surgery. I really wanted to push the envelope on this and see if it would work. I put every last penny of that on my credit card. I had the money to pay that off in about 14 days.

Troy: Oh wow. They paid for everything.

Grace: It was quick.

Troy: Wow.

Grace: Yes. I had met my insured amount at that point, and so after my insured amount, the rest of my bills were shared. They had a great second opinion program that I was able to use just to make sure that surgery was the right first course. All in all, a pretty impressive situation.

Troy: As part of the retirement planning process, those of you who watched these videos, step one is risk management and investment planning, step two, income, step three, tax planning, and then step four is the healthcare planning. A lot of times, we’re trying to help people determine where should you pull your income from, the IRA or the non-qualified account, possibly a Roth IRA. Should we do Roth conversions?

Doing Roth conversions prior to Medicare age puts you into an income category where you’re not eligible for a subsidy to go into the Affordable Care Act and possibly have a plan that’s subsidized by the government. One of the things that’s unique about the medical cost sharing is from the financial planning side. If we can have clients that have first and foremost medical care taken care of, they need to obviously trust that if they have something significant.

Because many of our clients and many of you are probably healthy and you just want to make sure that if you have something severe or significant happen that you’re going to be covered. That’s the number one thing I think is the medical cost-sharing community building the trust and the integrity or building the trust of consumers through the integrity of the process and experience that people go through whenever they have claims to file.

For us, it really brings in a valuable tool in retirement planning because if someone is comfortable with the medical cost-sharing community, and we don’t have to worry about keeping income at certain thresholds in order to reduce the cost of health insurance, and somebody can have the coverage that they need. From a planning perspective, it really helps us do our job a lot better because we can accomplish more prior to Medicare age.

It is a really, really cool concept. There are, I’m sure, better than other health medical cost-sharing communities out there. When I talk about better, I guess what I’m specifically referring to is how does a consumer do the research? How does someone watching this video right now, how do they know what to look for, what questions to ask, the claims experience or history of other consumers? How does someone watching this video right now who may be interested in learning more, how do they do their own research and what questions should they ask?

Grace: I think one of the first questions, and may this isn’t so much a question, go read the reviews, see what other people have said, see what the testimonials look like. If you hear a bunch of really, really great reviews, and maybe only just a couple of bad ones, there’s always going to probably be somebody who maybe didn’t quite read the membership guidelines and know what they’re signing up for.

To point number two, read the guidelines. They all publish them, just like an insurance company publishes what’s covered and what’s not. The medical cost-sharing companies will spell out in black and white, big, bold letters, what is and what’s not shareable. You’ve got to know that going in order to truly be comfortable. I think that’s very important. I think questions like how big is the community? What do you do in terms of a reserve fund? How much do you set aside? Do you set anything aside?

Do you have any horror stories where you’ve had to raise the rates significantly? Most medical cost-sharing companies really don’t raise their rates all that often or by all that much, but some have had to, and that might be a sign of perhaps mismanagement. I think some questions like those are a good starting place to really get comfortable and make sure that you’re signing up for a really reputable quality, medical cost-sharing organization.

Troy: That makes a lot of sense because, obviously, the reviews. I think most people know that. If you start to understand the history, and what you’re talking about as far as the management of the funds, how much do they have in reserve? What’s the transparency there? I know we talked about it before there, but there are millions and millions of people participating in these medical cost-sharing communities. There’s a lot more information available today than let’s say 30 or 40 years ago when many of these communities began to come into existence.

Grace: Were very new.

Troy: Grace, one of the things that was very appealing to me when we first started talking is your passion for medical cost sharing. Obviously, with your knee and your experience, it’s obviously something that you have went through and even probably made you more passionate about. Compensation, you get paid if someone enrolls in medical cost-sharing and if someone buys a health insurance policy, they get paid as well. How do those two compare as far as the compensation that someone like you would make versus someone selling an insurance policy?

Grace: Of course, I think that’s a great question. We do get compensated when people sign up. That’s important to know. Now I will tell you, it’s significantly less than if I was selling you an insurance product but I’m okay with that. I think what we’re doing with medical cost sharing is I’m evangelizing about this, I really believe in it as a solution. I believe it can help people, and I feel really good at the end of the day if I sign up somebody, and I think they’re a great fit for it, and I think it’s going to be great for their family, for their finances, for their health.

That’s a win for me. Not so much about the money, but really, I think it can help people and I think it can help families, and that’s the most important part. If I think someone is not right for medical cost sharing, I will be the first one to raise my hand and tell you that I don’t think you’re a good fit for it, that a traditional health insurance plan is your path. That’s an important distinction to make, and I think anybody who you talk to about this has to be very upfront with you to say, this is for you, or it’s not, and you’ve got to be so transparent about it because that’s important. At the end of the day, it’s people’s finances, it’s people’s health, and if you don’t have that, what else do you have?

Troy: There’s not much. I mean, you have family and faith, but there’s not much more [crosstalk] beyond security, financially and health security. There’s really not too many more things important than that. You can reach out to Grace Gosnell at Scoop Health if you have questions, if you’d like to learn more. Of course, if you’re about to retire or just entered retirement, and you’re prior to Medicare, regardless of which direction you decide to go, you need to work that into a comprehensive retirement success plan.
That’s what we call it here. Grace, I want to thank you very much for coming on the channel today. Hopefully, I’m sure people gained a lot of information that they can put to use for their own good. Thank you very, very much.
Grace: Thanks for having me. Troy.