Don't Fear the Health Care System... Make It Work for You

Editor's note: Knowing how to navigate health care in America can give you a critical edge... whether you're seeking care, managing your medical plan, or investing in the space. So today and tomorrow, we're sharing an important series from our colleague Thomas Carroll. Adapted from the Health & Wealth Bulletin in 2020, it covers this sector's frustrations, dangers, and – yes – incredible wealth-building potential.

Today, more than ever, please accept this simple fact – your health is your most important asset. It needs to be managed just like anything else.

That doesn't just mean eating right, exercising, and not smoking or drinking excessively. It also means understanding the rules of the playing field.

You need to appreciate the structure of our massively complicated system...

Why? Because it is the one part of the economy in which we are all customers.

The "product" you must purchase could mean the difference between living with a chronic illness or understanding how to fix yourself. It could mean personal bankruptcy... or knowing how to avoid irrational costs. Understanding it may even mean the difference between life and death.

That's why back in February 2020, I spoke during our Stansberry Research Immersion Week at Canyon Ranch in Tucson, Arizona...

The presentation was one I've given many times: "The Five Things to Do Today to Make You a Better Health Care Consumer." And it's always a crowd-pleaser. That's not because I'm a great speaker. It's because the information is so valuable... It sheds light on a topic that most people just don't understand.

Today and tomorrow, I'll share the tips from that presentation. Let's start with the first three...

1. Understand the health care dollar.

We all need a better understanding of where our dollars go. The average family of four spent more than $28,000 on health care in 2019 – and that was before COVID-19. Where does it go? Insurance companies? Drugmakers? Doctors?

You might be surprised to hear the biggest piece of the health care pie: hospitals.

Between inpatient and outpatient care, these important institutions account for about 50% of total health care spending every year. If we do not address this major driver of costs, it will be very difficult to lower annual health care inflation.

2. Stay out of the hospital unless absolutely necessary.

Besides being expensive, hospitals are also dangerous places to be.

If you are admitted to a hospital, I guarantee your final bill will meet and likely exceed whatever deductible your insurance carries (regardless of services rendered). If you're uninsured, expect to pay full retail price – thousands more than what an insurance company would have to pay.

But why are they dangerous? Simple – hospitals are where all the sickest people are. Despite best efforts, it's difficult to keep bacteria and viruses at bay within hospitals.

Hospital-acquired infections afflict 1.7 million people annually and kill 99,000 of them. That is almost a 6% mortality rate.

Moreover, physicians and other clinicians are humans – they make mistakes. A 2016 study found that every year, between 250,000 and 440,000 deaths are directly related to a provider mistake. This makes physician error the third leading cause of death in the U.S.

And the pandemic has layered more risk on top of all this.

I'm being very critical of hospitals. The truth is – if you really need to go to the ER, it's likely that in your gut you know that's the right thing to do. But it's a good idea to avoid the hospital whenever possible.

I argue against hospital use for primary-care services. Urgent-care facilities can handle many issues if you don't have a regular doctor... And of course, this is all the more reason to take preventive care seriously.

3. So you're 65 – what's this Medicare thing?

Once you reach the glorious age of 65, you become eligible for Medicare.

This is the health care program you've paid for all your life through taxes. Now you get to collect the benefits. People that reach age 65 and become eligible for Medicare can expect to live for 21 more years.

Interestingly, Medicare will cover about 65% of your expected health care spending during those 21 years. The other 35% is on you.

How much will that be?

You better know – because it's a lot. It needs to be part of your retirement planning. If not, your plans may need to be revised when it's too late.

On average, people on Medicare for those 21 expected years will spend about $200,000 of their own money on health care.

An alternative is to consider the Medicare Advantage ("MA") program. This is a very successful partnership between the government and private-sector health care companies. This is a way to get all your Medicare benefits plus others not included in Medicare for much less.

Don't take my word for it. About 40% of the Medicare population gets their benefits this way today. And that level has been rising for the last 10 years.

On average, using an MA plan will cost $130,000 out of your pocket during those 21 years. Wouldn't you rather spend $70,000 on something else?

Tomorrow, I'll share the last two tips from my presentation. Until then...

Happy living and investing,

Thomas Carroll

Editor's note: Most of the time, you might not think about how much money is coursing through the veins of the health care industry – by far the largest segment of the U.S. economy. But it's time to pay attention...

That's because health and medicine are undergoing a radical transformation that few can see or understand. It's not about any individual drug, device, or treatment. It's about how we take back our health from a deeply broken system... and how we reimagine what it even means to be healthy... with trillions of dollars changing hands.

Our colleague Dr. David Eifrig recently went public with this groundbreaking story. Whether you're nearing retirement age or simply looking for investment gains in today's tough environment, you need to hear this now... Get the details here.

Further Reading

Retirement can be hard to plan for. Worse, American retirees today are facing huge threats to their wealth. Dr. David Eifrig reveals why it's more important than ever to make sure your nest egg doesn't dry up... Learn more here: Don't Fall Into the Retirement Nightmare.

Investors have been reluctant to get back into health care and biotech. But you can make massive long-term gains in these stocks... if you know which traits to look for. Read more here.