Healthcare costs in the United States are a significant concern for individuals, families, and employers alike. For many, the terms “deductibles,” “coinsurance,” and “copays” represent barriers to accessing the care they need. With medical debt being a leading cause of bankruptcy, understanding these out-of-pocket (OOP) costs is crucial—and exploring ways to reduce or eliminate them can make a significant difference.
Breaking Down OOP Costs
- Deductibles: A deductible is the amount you must pay for healthcare services before your insurance begins to cover the costs. For example, if your deductible is $2,000, you’ll need to pay that amount out-of-pocket before insurance takes over. High deductibles can make care unaffordable, with many people delaying or avoiding treatment as a result.
- Coinsurance: This is the percentage of costs you’re required to pay after you’ve met your deductible. If your coinsurance rate is 20%, you’ll pay 20% of the bill for a covered service while your insurance pays the other 80%. For expensive procedures, these costs can add up quickly.
- Copays: A copay is a fixed fee you pay for specific services, such as $30 for a doctor’s visit or $50 for a specialist. While copays may seem manageable, they do not count toward your deductible and can still create financial stress for frequent healthcare users.
- Out-of-Pocket Maximums: This is the ceiling for how much you’ll pay in a year for covered services. Once you hit this limit, your insurance covers 100% of covered costs. However, reaching this maximum often means spending thousands of dollars first.
The Hidden Costs of BUCA Plans
The “Big Four” insurance carriers—commonly referred to as BUCA (Blue Cross Blue Shield, UnitedHealthcare, Cigna, and Aetna)—dominate the U.S. health insurance market. While these plans promise extensive networks and coverage, they are a major contributor to rising healthcare costs. A study revealed that medical bills contribute to 60% of all bankruptcies in the U.S., with high deductibles and coinsurance being key factors. Many Americans struggle to pay their share, even with employer-sponsored insurance.
How WOOP Programs Can Help
Programs like Waived Out Of Pockets (WOOP) are emerging as innovative solutions to address the affordability crisis. By eliminating or significantly reducing OOP expenses, WOOP programs make it possible for members to access high-quality care without financial strain.
Chris Barakat, Chief Commercial Officer of WOOP, explains: “Waiving out-of-pocket costs often means much better care because members have a quarterback (the members clinician) helping them access the best doctors, with money no longer being a barrier.” This patient-centered approach ensures access to top providers and removes financial roadblocks.
WOOP Programs and the Quadruple Aim
Programs like WOOP align with the “quadruple aim” of healthcare: enhancing patient experience, improving population health, reducing costs, and improving the work life of healthcare providers. Dr. Geetinder Goyal, Cofounder of WOOP and CEO of First Primary Care, a national Direct Primary Care (DPC) company, shares: “By putting doctors in charge of both care and financing, eliminating networks, and focusing on direct payments, we’re creating a system where both patients and clinicians thrive. This approach saves members and health plans tens of thousands of dollars for both minor and major events.”
Dr. Goyal also highlights a compelling example: “We saved over $30,000 on a hip replacement for the plan while also saving $8,000 in copays, coinsurance, and deductibles for the member at the exact same facility with the exact same provider as one of the big insurance carrier networks’ contract rates—all because we paid the facility and clinicians the same day of service. The member was so happy.”
Why Benefits Consultants and HR Directors Love Programs Like WOOP
For HR directors and employee benefits consultants, programs like WOOP are more than just cost-saving measures. They transform health plans into valuable hiring and retention tools. A health plan that eliminates out-of-pocket expenses makes an employer significantly more attractive to potential employees, helping to recruit and retain top talent while reducing financial stress for the workforce.
By adopting solutions like WOOP, organizations can turn their health benefits from a major expense into a strategic advantage, ensuring employees feel supported and cared for in every aspect of their health journey.
Why This Matters for Employers
For CFOs, CEOs, and HR leaders, programs like WOOP provide a clear opportunity to reduce costs while improving outcomes. Encouraging HR teams to explore these solutions can foster a healthier, more satisfied workforce and reduce financial strain for employees. Offering innovative healthcare benefits strengthens organizational appeal in competitive job markets.
Advocating for Change
If you’re an employee or employer looking to address OOP costs, here’s how you can make a difference:
- Educate Yourself and Others: Understand the financial impact of deductibles, coinsurance, and copays. Share this knowledge with your HR or benefits team.
- Push for Innovative Solutions: Advocate for programs like WOOP during open enrollment discussions. Highlight their cost-saving potential and patient-centered approach.
- Leverage Data: Use statistics and case studies to demonstrate the real-world impact of high OOP costs and how solutions like WOOP can alleviate them.
- Engage Leaders: Encourage decision-makers in your organization to prioritize healthcare affordability as part of their benefits strategy.
The Future of Affordable Care
As healthcare costs continue to rise and doctors become ever more frustrated by the insurance driven system, programs like WOOP show promise in transforming how care is delivered and financed. By reducing financial barriers, these programs ensure that individuals receive the care they need without risking bankruptcy or delaying treatment.
Want more information about waiving out of pockets (WOOP) or Direct Primary Care (DPC)?
Contact: Chris Barakat, cbarakat@woopcare.com
