When I had surgery 3 weeks ago, the final bill for it came to $33,000. My insurance paid 7,000 of that bill, as per their contract with the hospital. My insurance doesn't just place limits on what they'll pay, but they also put limits on what the hospital can bill me. I paid nothing of that bill, not a penny. Out of 33,000, the hospital got about 7k.
The hospital signed this contract willingly, which kind of makes me wonder why they'd be willing to accept such a low payout. Tricare, medicare and medicaid regularly pay out less than half of the total billed for medical care. All insurance is like this basically, in order to get a contract with the insurance company, the provider will have to accept the limits placed on them by the insurance company.
So if most patients are insured and hospitals and doctor's offices willingly accept payment much, much lower than their asking price, why are the asking prices so high to begin with? If it's worth it for the hospital to do my surgery for 7k, why would the charge the uninsured 33k?
I have a couple theories. For one, using the higher prices as a bargaining tool when it comes time to negotiate a contract, it's probably more effective to ask for 10k for a 33K bill than it is to ask for 10k for a 12k bill. Secondly, when insurance companies pay a percentage of doctor's visits and hospital stays, the care provider collects more from a bigger bill. Thirdly, when someone pops in with no insurance at all and therefore no limits on what they can be charged, the hospital is obviously going to get more by charging you a larger amount. Even if they agree to forgive some of your bill, they'll still get more by starting with a larger sum.
In our entire medical care system, there is only one group of people that pays the outrageous and inflated asking prices of our hospitals. The uninsured. Not the uninsured who skip out on their bills, but the honest, hardworking but uninsured people who are too noble to let their bills go unpaid. Even if they get 5K of that cut off the bill, they will still pay more than anyone else for their medical care. The insurance companies, even if they cover the entire amount for their clients, have used their bargaining power to get your medical care cheaper. The insured, even if they have some kind of maximum payout for their insurance and have to pay their entire bill themselves, will still get the benefit of that contract and the limits it places on the cost of their care.
So suck it up, uninsured people. My insurance is costing you big bucks. Not only is it inflating the cost of your health care, but I don't pay a penny more because of it.
IMO, anyone who qualifies for medicaid should take it. You're walking on thin ice by not having an insurance company, any insurance company, on your side. If you do get on medicare, the biggest money-saving feature for you will be that agreement between your hospital and your insurance company. In fact, when you're on medicare, it will cost the government far less to pay for your medical care than it would cost you to pay for it out of pocket. Heck, you could even pay medicare's share of the bill, thereby negating any cost to the government and it would still save you a butt-ton of money. (I don't even know if you can do that though.)
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