Healthcare billing problems: Suddenly and expensive
The insurance is designed for sudden, expensive risks that most of us cannot afford. If you look at these words again: suddenly and expensive. It is unpredictable and affordable. For years we had someone with a bigger wallet who paid the bills. Most of us had very little to pay out of pocket for our own medical expenses. At least until now.
It is common knowledge that those who have more money, without question, have to spend more. Insurance companies are no different; They are the ones with the bigger wallets. Medical providers know that too. Over the past 50-60 years, providers have increased their prices to see what they can get away with. At the same time, insurance companies have negotiated larger discounts. So healthcare became big business. Insurance companies have borne these costs, and now we have to bear the costs of higher premiums today.
Healthcare price transparency is zero. Partly because we never had to know, because someone else paid the bulk of the bill. The other reason is that no one has bought their health expenses like other consumer goods. The medical service providers know this and have used it. The price of something billed to the insurance company and the cash price can be completely different. Which one will you pay for?
It’s highway robbery if you ask me. Take a typical generic at the local pharmacy. It could cost about twenty dollars for the insurance company, but your price if you paid the cash price could be ten dollars. Why? It’s because they can.
The opposite is also true. If you ask for the cash price, it can be twice the price negotiated by the insurance company. Many providers charge the patient the amount billed against the reduced amount. It’s like you asked me to charge you more.
Personal case study: My child’s hand was injured. The specialist couldn’t tell whether it was broken or not. They wanted to lean on the side of caution, but I wanted to know if it was just a deep bruise or a fracture. The doctor suggested that we do an MRI on his hand to make sure. Like any caring father, I wondered how much it would cost if I paid in cash. I have a high deductible health insurance plan. He said the insurance company’s approved amount was $ 350 (this is a small MRI machine). He went on to say I don’t care. So if you paid in cash, I would charge you $ 450.
Because many policyholders have HDHP (High Deductible Health Plans) or HSAs (Health Savings Account Plans), many providers recognize that the patient is responsible for the initial cost. Depending on the view, this can be good and bad.
First, there is the negative view. Many expect the first dollar coverage to be paid by the insurance company. Every visit to the doctor, laboratory test or prescription medication comes first out of your pocket and will count towards your deductible. Some may not like this idea.
The downside of this is that you have more control over your expenses while saving on premium costs. The net profit is worthwhile for many. You can ask further questions about your health care. Why? It is because it is their money. More importantly, ask more questions about your health care.
At the end of the day, it’s your health care and your money. It can be overwhelming and expensive to find this happy middle ground between the cost of coverage and what you get for it. Finding out what’s important to you and asking enough questions to help you make more informed decisions can save you thousands of dollars over the years. After all, it’s your money.