I had this experience with imaging (MRI), cost 10% more with insurance than without.
I asked a friend in the healthcare industry about this - they said that since insurance companies negotiate all the services at once - the insurance company is trying to lower the total cost for the whole insured pool, this often means that they will marginally overpay for high margin services in order to get big discounts for the really costly things. The hospital makes more gross margin, and the insurance company lowers it’s total spend. The offshoot is that individual people may bear the brunt of this grand bargain...
No idea if it’s true, but had a ring of truth to it...
One thing to keep in mind when paying individually is that many insurance providers won't count the payments toward your deductible or maximum out of pocket expenses, since it wasn't processed through your insurance.
If you're nowhere near hitting your deductible for the year, and don't anticipate hitting it, then looking for cash-only discounts make sense. But if you anticipate hitting your deductible anyway, sometimes it makes sense to pay the inflated price on that individual item, since you'll make up for it later when you hit your deductible and switch to only paying your coinsurance amount (or hitting your max OOP).
Wow. I used to live in the US but thank you for the reminder. I am very glad i now work a government job in a country with public health care. I went to the dentist last week. Walking out without paying anything, not a single form, feels like stealing. I cannot understand how anyone in the US can pay such costs. Simply staying alive seems a constant battle.
Yeah, I've paid nothing for x-rays and fillings. Haven't needed a night guard yet.
I suspect that the chicanery in the U.S. is more severe in the non-dental sectors of healthcare as there's more volume/value there (from a provider/stakeholder POV).
My wife missed a checkup (perhaps two) due to pregnancy. When she went back she needed a root canal. I happened to need a filling for the first time in 12 years. Before any of my work we had hit our insurance max for the year and had to pay cash for the excess--about $1000. This all happened in the same month or two so we didn't know until after.
Ironically for all that everyone talks about healthcare in the UK being free, dentistry and optician services aren't - although there is a subsidised base service tier, all the service providers are independent private businesses.
> c-section w/o insurance runs $25-$30K -- cost me around $5K with insurance
$30K without insurance is insane! I live in another developed country, where childbirth isn't covered by insurance (since it's elective, right?), but the whole C-section procedure + 12 days in a private room in hospital cost a bit over $5K. Almost $4K of that were then paid by the city government (nationwide program to help cover birth costs).
The simple/fast solution is healthcare providers have to 1) publish costs and 2) have fixed prices regardless of purchasers.
And while I support universal healthcare, this is an easy solution that falls well into capitalism (no 'socialism' here for the far right) as governments role is to create open and level playing fields for both consumer and business to promote a free market.
The fact no legislator has brought forward, let alone voted through, such a simple and effective improvement shows how deep the healthcare industry is in the corridors of power.
Both of your proposed solutions are appealing - but Medicaid and Medicare create a large problem, as both programs pay way below listed rates (~10% and ~40%. Respectively) so your proposal while eloquent would create massive upheaval (perhaps well deserved) making the proposal much more radical than it seems on the surface
Not an expert in this space so my comment comes with a shovel full of ignorance...
So your comment implies that medicare/medicaid prices would go up? Is that true? Could the 'listed rate' drop 40%? I always hear listed rates are grossly inflated for those that dont have insurance and land in emergency etc
When you see some of the inflated prices a >40% drop seems distinctly possible if a truly competitive market is created. Would that be fair?
It’s actually worse - a healthcare provider is typically paid 10%-40% of the cash pay rate for a Medicaid or Medicare patient so 60%-90% below the listed rate!
I’m far from an expert as well, but my point is that a transparent everyone pays the same system is in direct conflict with the current system where certain patients pay multiples of the other patients for the exact same care/service etc.
> I had this experience with imaging (MRI), cost 10% more with insurance than without.
Depending on where you went it could have been much more than 10%. Non-emergency imaging is definitely one of those things you ask about other locations and if they have cash pricing. When I needed an MRI if I was to use my insurance it was going to be ~$1000 because of high deductible plan. A different place took payment at the time and it was $350. According to the doctor who wanted me to get the MRI, hospitals are far and away the most expensive places to get one.
This gets to the core of Milton Friedmans criticism of the healthcare system. PAtients might ask themselves that but they get healthcare services through the employer, so they show little to no elasticity between insurance companies and their premiums.
If you untied healthcare from employers, then you would unleash a massive competitive force, where if one insurance outperforms another one, patients will react as you say. But today, changing insurance companies would mean changing jobs.
Healthcare insurance is different. What you would see is that insurance companies would compete for the healthiest demographic and offer them the best rates but no one would cover people outside of that demographic or they would charge ridiculous rates.
And this is because healthcare is not an insurance! It should be instead thought of as a societal contribution (via a tax) for the benefit of universal healthcare.
Framing healthcare under the microscope of insurance causes the boxed-in solutions currently in existence.
That would actually be a good force. It is insanity that a 20 year old pays the same that a 50 year old, or that someone that exercises, does his check-up, etc pays the same as someone that never goes to the doctor, doesnt take care of himself etc etc. Even car insurance does this.
The point of insurance is to manage risk, not to reward it.
And then there is the whole pre-existing condition thing. How dare someone be born with handicap, get cancer, etc. Would you be okay if your insurance tripled or was completely denied if you were diagnosed with cancer? And why should a woman have to pay into an insurance pool that pays out for prostate exams?
Car insurance is mostly based on things you can control -- at fault car accidents, tickets, etc.
You pay your insurance against cancer before you get it.
A more complicated pre-existing condition would be maybe for kids, young adults whose parents didnt give coverage for , etc. But you could use subsidies to manage those cases and it would be a blip in the budget. If someone deliberately avoided insurance and the catches an expensive disease, he should be toast, because thats the gamble he made and the result of it.
Please also keep in mind that in a state run system, if a treatment is very expensive the state will not give it and thats it. Thats one of the reasons why public healthcare is often cheaper, because it says no to many treatments, which is not something easy to accept for americans.
You pay your insurance against cancer before you get it.
That’s not how things worked pre ACA. The insurance company could drop you after a certain point even if you had paid for coverage.
Also, before the ACA, if your cancer was in remission and then five years later, even if you had continuing coverage, and you tried to get insurance on your own, you couldn’t get it.
A more complicated pre-existing condition would be maybe for kids, young adults whose parents didnt give coverage for , etc.
That’s also not how things worked pre ACA. If you had insurance that you bought yourself and not through your employer and you had a kid who was born with a birth defect, the insurance company wouldn’t cover you.
A crime is only what legislature declares is a crime...
One would consider why it is the law for a mechanic to give you a written estimate for work to your vehicle, and be required to call you before exceeding by a notional amount- yet, a hospital can legally withhold all cost information from you and yet you’re responsible for the bill in full after the service.
I asked a friend in the healthcare industry about this - they said that since insurance companies negotiate all the services at once - the insurance company is trying to lower the total cost for the whole insured pool, this often means that they will marginally overpay for high margin services in order to get big discounts for the really costly things. The hospital makes more gross margin, and the insurance company lowers it’s total spend. The offshoot is that individual people may bear the brunt of this grand bargain...
No idea if it’s true, but had a ring of truth to it...