Photo: Flickr / illuminaut
If you’re among the few Americans with health insurance, prepare to have your bubble burst. Cash is king when it comes to footing medical bills, with hospitals discounting rates by as much as 85 per cent for people paying the old-fashioned way, according to HopitalBillHelp.org.
The practice isn’t uncommon or even new, but few consumers are aware of the discrepancy.
Long Beach, Calif. resident Jo Ann Snyder shelled out $2,336 for a CT scan after colon surgery, but the LA Times found if she’d paid cash instead using insurance, she would have paid only $1,054. The same was true when they called seven other hospitals.
Snyder’s experience is mirrored nationwide, as hospitals have begun to further incentivise cash payments with discounts. That way cash-strapped patients get cheaper care and hospitals are paid upfront, avoiding the added expense of hiring debt collectors.
Just 54.2 per cent of U.S. employees were enrolled in health care plans as of April 2011, down from 60 per cent in pre-recession 2007. That leaves 40 million Americans without health care, the cost of which will exceed the average household income by 2030, according to a recent study published in the Annals of Family Medicine.
Before you think about hitting the ATM and kicking your insurer to the curb, keep this in mind: High-deductible health care plans are on the rise and if you pay cash for services, the expense won’t count toward your spending requirement.
If you’re in doubt, try running the same test as the Times by calling up your hospital or medical provider to find out cash and insurance rates.
Otherwise, visit your hospital’s website to see if it’s posted a “Charge Master,” or detailed list of services along with the estimated upfront rates. It’s no picnic to comb through, however, as each list contains hundreds if not thousands of items.