Hide your health insurance status and pay cash instead(kevinmd.com)
kevinmd.com
Hide your health insurance status and pay cash instead
http://www.kevinmd.com/blog/2012/06/hide-health-insurance-status-pay-cash.html
17 comments
In India, common procedures (e.g. blood test) usually have prices listed on a sign. I had surgery done there, and each doctor gave me a price estimate with the diagnosis ("approx 85k for the basic, 1 lac if you want the deluxe private room").
Of course, there are many big differences between India and the US. India is mainly free market health care, unlike the US. India also has a 15-20% savings rate. And insurance is really insurance - it covers emergencies, not your monthly birth control/adderall/psychiatrist.
Of course, there are many big differences between India and the US. India is mainly free market health care, unlike the US. India also has a 15-20% savings rate. And insurance is really insurance - it covers emergencies, not your monthly birth control/adderall/psychiatrist.
Yes noone expects their car insurance to pay for their oil change, but we expect that from health insurance. The model in Singapore is a mandatory health savings plan with catastrophic health coverage.
Yeah, I ran into the same thing trying to argue a charge.
Me: This is outrageous, they charged me $800 to examine my shoulder and called it "external surgery".
Receptionist: Oh, let me transfer you to billing.
Billing: Oh, that is what was coded on your chart, so we billed accordingly. Let me transfer you to the doctor's staffer.
Staffer: Oh, that is what the doctor said he did, and he can't change that to say he did something else or that would be dishonest. He doesn't deal with billing at all.
Me: Arrrrrrgh.
Me: This is outrageous, they charged me $800 to examine my shoulder and called it "external surgery".
Receptionist: Oh, let me transfer you to billing.
Billing: Oh, that is what was coded on your chart, so we billed accordingly. Let me transfer you to the doctor's staffer.
Staffer: Oh, that is what the doctor said he did, and he can't change that to say he did something else or that would be dishonest. He doesn't deal with billing at all.
Me: Arrrrrrgh.
It's 110% broken from a consumer point-of-view, which is funny because most of the people that defend the status quo in the US are political conservatives who talk about the 'free market' and such.
When no one in an entire building of service provides can give you even a ballpark of what a service will cost you, there's no free market at work - at least not at the consumer/individual level.
When no one in an entire building of service provides can give you even a ballpark of what a service will cost you, there's no free market at work - at least not at the consumer/individual level.
I agree that it's broken from the consumer's point of view. But, conservatives aren't defending anything. They acknowledge that the system is broken, because there's no free market to speak of. If you think the current state of things resembles a free market in any way, you're sorely mistaken. The ACA/Obamacare isn't an effort to fix health care. It's an attempt to reconfigure and eventually bankrupt the health care insurance industry. And both parties are to blame, ultimately.
US political conservatives don't "defend the status quo". They complain that the parts of the system they already hate keep expanding.
>A good start, but shopping around is hard, if not impossible
I think shopping around, properly conceived, should be the primary care physician's job. If a doctor is referring e.g. 10 people a month to a specialist, then obviously they are going to be in a much better position to evaluate the options than a patient.
I believe that Sherpaa, Jay Parkinson's company, provides this "shopping around" service (https://sherpaa.com/).
I think shopping around, properly conceived, should be the primary care physician's job. If a doctor is referring e.g. 10 people a month to a specialist, then obviously they are going to be in a much better position to evaluate the options than a patient.
I believe that Sherpaa, Jay Parkinson's company, provides this "shopping around" service (https://sherpaa.com/).
Not really. Hospital networks are merging, affiliating and consolidating. So if your primary care doctor is affiliated with Hospital X, and specialist group Y is also affiliated with hospital X, there's a good chance that you're going to be referred to specialist group Y.
The exception is when you have some unusual circumstance, and they try to find the world's authority on your condition.
The exception is when you have some unusual circumstance, and they try to find the world's authority on your condition.
I'd try shopping around for a GP first, versus a hospital. Find out if they offer cash discounts and which testing centers they use. Then see if the testing center they use offer a discount.
If your primary care doctor is cool, he should be able to tell you the estimate and cash discount during the consultation.
If your primary care doctor is cool, he should be able to tell you the estimate and cash discount during the consultation.
This whole situation could get solved with two swift changes in the law:
- Employer provided healthcare is now illegal (with exceptions for the military).
- Healthcare discounts are now illegal. Insurance and cash-in-hand individuals pay exactly the same rate.
These changes would be quite painful in the short term. In fact there would be a queue of people arguing why this was a horrible idea (the "I got mine" group).
However in the long term this makes health insurance more similar to auto-insurance (car insurance).
People can actually shop around, insurers have to compete for individual's business, and if people want to forgo insurance or go with a smaller insurer (new business!) then they can.
Plus insurers and individuals will now both work together to bring hospital care costs down (they're on the same "side").
But people are too short sighted to see what a massive leap forward this would be. It is the very definition of a healthy capitalist market. But their thinking about insurance and how it "should" work is just so muddied with what has been done up until now.
Employer insurance in particular is a massive problem - due to the lock-in (both between employees and their employer's insurance company AND between the employee and employer). It really hurts innovation, startups, and growth in America today.
Healthcare discounts hurt people without insurance AND make the insurance sector uncompetitive. It is impossible to start a new insurance scheme now because you cannot get big enough discounts to be competitive.
- Employer provided healthcare is now illegal (with exceptions for the military).
- Healthcare discounts are now illegal. Insurance and cash-in-hand individuals pay exactly the same rate.
These changes would be quite painful in the short term. In fact there would be a queue of people arguing why this was a horrible idea (the "I got mine" group).
However in the long term this makes health insurance more similar to auto-insurance (car insurance).
People can actually shop around, insurers have to compete for individual's business, and if people want to forgo insurance or go with a smaller insurer (new business!) then they can.
Plus insurers and individuals will now both work together to bring hospital care costs down (they're on the same "side").
But people are too short sighted to see what a massive leap forward this would be. It is the very definition of a healthy capitalist market. But their thinking about insurance and how it "should" work is just so muddied with what has been done up until now.
Employer insurance in particular is a massive problem - due to the lock-in (both between employees and their employer's insurance company AND between the employee and employer). It really hurts innovation, startups, and growth in America today.
Healthcare discounts hurt people without insurance AND make the insurance sector uncompetitive. It is impossible to start a new insurance scheme now because you cannot get big enough discounts to be competitive.
At one time I would have loved to shop for my insurance, but government prevents that, see the McCarran-Ferguson Act of 1945.
I would dare say that a good portion of our out of control health care costs are because of government intervention, another good part is separating the end user from directly paying for it.
I would dare say that a good portion of our out of control health care costs are because of government intervention, another good part is separating the end user from directly paying for it.
"It is the very definition of a healthy capitalist market."
I didn't realize heavy handed, unnecessary regulation bound to cause massive market distortions was "healthy" for capitalism.
Employer health insurance is the current method of distributing risk among a larger group, and any prohibition would simply be circumvented by other types of group health insurance and reimbursements.
Making discounts illegal is a ridiculous restraint on capitalism. Imagine if wholesalers and retails could not discount for marketing, loyalty, or quantity. Ridiculous.
The only thing that should be regulated is the transparency of pricing and services. Consumers simply won't accept paying 5 times the price if they are aware, but they may be willing to pay 20% more to avoid the hassle of insurance. That's "healthy capitalism" - not your complex regulatory scheme. The thought of enforcement of what you suggest is mind-boggling. Illegal to provide your employees with health insurance? Bonkers.
I didn't realize heavy handed, unnecessary regulation bound to cause massive market distortions was "healthy" for capitalism.
Employer health insurance is the current method of distributing risk among a larger group, and any prohibition would simply be circumvented by other types of group health insurance and reimbursements.
Making discounts illegal is a ridiculous restraint on capitalism. Imagine if wholesalers and retails could not discount for marketing, loyalty, or quantity. Ridiculous.
The only thing that should be regulated is the transparency of pricing and services. Consumers simply won't accept paying 5 times the price if they are aware, but they may be willing to pay 20% more to avoid the hassle of insurance. That's "healthy capitalism" - not your complex regulatory scheme. The thought of enforcement of what you suggest is mind-boggling. Illegal to provide your employees with health insurance? Bonkers.
> I didn't realize heavy handed, unnecessary regulation bound to cause massive market distortions was "healthy" for capitalism.
So the current market where two or three insurers basically control an entire state is healthier?
> Employer health insurance is the current method of distributing risk among a larger group, and any prohibition would simply be circumvented by other types of group health insurance and reimbursements.
In English?
> Making discounts illegal is a ridiculous restraint on capitalism.
So when businesses subvert capitalism that is a-ok because they are part of the system. But when the government subverts capitalism to actually make the market more competitive that is wrong?
> Imagine if wholesalers and retails could not discount for marketing, loyalty, or quantity.
A lot of wholesalers don't. They sell at a set price. Doesn't matter if you buy 50 or 5,000. They still seem to be in business.
> The only thing that should be regulated is the transparency of pricing and services.
What's the point in that when you have no choice in insurance provider?
> That's "healthy capitalism" - not your complex regulatory scheme.
A "scheme" I can describe in two lines is "complex?" Obama care was how many thousands of pages, remind me... If you cannot understand what I am suggesting then I propose that the issue isn't with my "complex" scheme but with your comprehension.
> Illegal to provide your employees with health insurance? Bonkers.
... Just like it is "bonkers" to imagine not providing them with auto-insurance, right?
And I don't mean auto-insurance for their company car. I mean auto-insurance for their private car.
It makes about as much logical sense as insuring someone's private body/person.
So the current market where two or three insurers basically control an entire state is healthier?
> Employer health insurance is the current method of distributing risk among a larger group, and any prohibition would simply be circumvented by other types of group health insurance and reimbursements.
In English?
> Making discounts illegal is a ridiculous restraint on capitalism.
So when businesses subvert capitalism that is a-ok because they are part of the system. But when the government subverts capitalism to actually make the market more competitive that is wrong?
> Imagine if wholesalers and retails could not discount for marketing, loyalty, or quantity.
A lot of wholesalers don't. They sell at a set price. Doesn't matter if you buy 50 or 5,000. They still seem to be in business.
> The only thing that should be regulated is the transparency of pricing and services.
What's the point in that when you have no choice in insurance provider?
> That's "healthy capitalism" - not your complex regulatory scheme.
A "scheme" I can describe in two lines is "complex?" Obama care was how many thousands of pages, remind me... If you cannot understand what I am suggesting then I propose that the issue isn't with my "complex" scheme but with your comprehension.
> Illegal to provide your employees with health insurance? Bonkers.
... Just like it is "bonkers" to imagine not providing them with auto-insurance, right?
And I don't mean auto-insurance for their company car. I mean auto-insurance for their private car.
It makes about as much logical sense as insuring someone's private body/person.
I'd take these points on one by one if that weren't just a rat hole.
Based on your responses, I think you need to spend some time gaining a basic understanding of the meaning of "free market," "market distortion," and how markets develop and adapt to their environment. You seem to imply you want capitalism and free markets, yet your suggestions and reasoning is ideologically incompatible with that goal, and nothing I say or do in this forum is going to bring you to a better understanding.
Based on your responses, I think you need to spend some time gaining a basic understanding of the meaning of "free market," "market distortion," and how markets develop and adapt to their environment. You seem to imply you want capitalism and free markets, yet your suggestions and reasoning is ideologically incompatible with that goal, and nothing I say or do in this forum is going to bring you to a better understanding.
Of course, this would be incredibly easy to defeat in the public forum (see other's comments below), but I really like it.
This system of having no price visibility, coupled with prices being arbitrarily lower or higher for different payers, is a recipe for inefficiency, opportunism, and fraud. Anything that forces us away from that path is a long term good.
This system of having no price visibility, coupled with prices being arbitrarily lower or higher for different payers, is a recipe for inefficiency, opportunism, and fraud. Anything that forces us away from that path is a long term good.
Healthcare discounts are now illegal
Hooray, outlaw negotiation! What could possibly go wrong with that!
Hooray, outlaw negotiation! What could possibly go wrong with that!
Consumer choice is more powerful than negotiation. If one hospital charges the end user twice as much as another then people simply won't go there, and doctors won't refer people there.
I would say that now everyone gets to be part of the fight for cheaper prices rather than just the insurers as it is today.
I would say that now everyone gets to be part of the fight for cheaper prices rather than just the insurers as it is today.
We need something for all the TSA employees when they leave our airports. They can stand around in hospitals making sure nobody gets a deal.
I'm not sure I fully grasp your argument, but if health insurance becomes anything like car insurance, then at best it's just a slightly lesser evil. I've been paying car insurance for about 15 years, at $120 a month, which is about $21,600 paid in so far, and I haven't used it once. The one time I got into a minor fender bender, I just gave the guy some cash and parted ways. If I reported it, then my rates would go up and the insurance company would eventually make back whatever they paid out anyway. Over my lifetime, I'll have given them perhaps upwards of $100,000...for what? It's not worth it to pay so much to have peace of mind against some hypothetical horrible accident.
I would much rather a more government-backed system, where the government tallies all the automobile-related accident costs at the end of the year and foots the public the bill.
I would much rather a more government-backed system, where the government tallies all the automobile-related accident costs at the end of the year and foots the public the bill.
Basic liability insurance (for auto) is more like $500 a year. That's more or less the mandated part of the coverage.
I don't really care to see the government insure expensive cars and the assets of the wealthy (expensive cars and asset protection are the big drivers of expensive insurance).
I don't really care to see the government insure expensive cars and the assets of the wealthy (expensive cars and asset protection are the big drivers of expensive insurance).
$500 * 50 years is still $25,000 over a lifetime. I feel safe in saying that that number doesn't come anywhere close to the damages that an average person actually causes. And besides, I paid about that much when living in the midwest for a stint, but around an east coast city you'll be lucky to get that price for half a year.
My master plan could similarly relate population density to accountability.
You have a good point about "luxury" assets (and certainly there would be many special cases like this to account for), but I'm not really talking about government insurance per se, because it's based on actual damages. If no car accidents happened in a year, nobody would pay any money.
My master plan could similarly relate population density to accountability.
You have a good point about "luxury" assets (and certainly there would be many special cases like this to account for), but I'm not really talking about government insurance per se, because it's based on actual damages. If no car accidents happened in a year, nobody would pay any money.
I have more than the legal minimum of liability insurance, live in an East coast state and pay less than $600 year. I do have a fairly clear record.
People that carry collision are doing so because someone made it a condition of a loan or because they are worried about the cost of losing a vehicle. I don't see any reason to bring the government into those situations.
People that carry collision are doing so because someone made it a condition of a loan or because they are worried about the cost of losing a vehicle. I don't see any reason to bring the government into those situations.
Fair enough. I ran an orange light a few years ago and my insurance costs went up by 150%. While the $500/year price tag may be what's on paper, I find that it isn't the reality for most people.
It isn't so much bringing the government in, as just using them as the non-profit middle man to tally all the car-related damage costs, then foot the bill to the public. If someone wanted to opt out and use private insurance, they would be free to do so.
Obviously this will never happen in the USA, but it would be an interesting social experiment for a smaller country perhaps.
It isn't so much bringing the government in, as just using them as the non-profit middle man to tally all the car-related damage costs, then foot the bill to the public. If someone wanted to opt out and use private insurance, they would be free to do so.
Obviously this will never happen in the USA, but it would be an interesting social experiment for a smaller country perhaps.
> I would much rather a more government-backed system, where the government tallies all the automobile-related accident costs at the end of the year and foots the public the bill.
This is pure Moral Hazard. If any cost you may incur is diluted over a pool of over 100,000,000 other people what do you care that you smash up someone elses car? Every $1,000,000 of damage costs you less than a penny. And if you put your car in a ditch the government (read: other people) will buy you a new one and you don't pay a dime...
This is pure Moral Hazard. If any cost you may incur is diluted over a pool of over 100,000,000 other people what do you care that you smash up someone elses car? Every $1,000,000 of damage costs you less than a penny. And if you put your car in a ditch the government (read: other people) will buy you a new one and you don't pay a dime...
The same risks exist with the system in place now (insurance fraud), and will exist with really any system. The mechanisms for mitigating these risks seem rather obvious. If someone runs their car into a ditch, you do some reasonable investigation to see if it was legitimate. If someone continuously gets into suspicious accidents, they're on their own and have to pay private insurance or stop driving.
Edit: not to mention the health risks of purposely smashing up your car :)
Edit: not to mention the health risks of purposely smashing up your car :)
In some states you can self-insure your car if you have the cash.
Awesome...didn't know that! Self-insurance seems like a reasonable compromise to what I'm talking about.
It's a great option so long as you are comfortable having ca. $50,000 of your own money on the line every time you get behind the wheel.
I'm in no way willing to make that wager though...
I'm in no way willing to make that wager though...
With the current system, you're not even wagering that $50,000...you're throwing it out the window. Unless you believe you'll cause >= $50,000 of car-related damage over your lifetime.
Also, and this is the bigger piece of having auto insurance vs being self-insured, if you hit somebody else and kill them, you may be in for a wrongful death suit and personally liable for all of those expenses, or even medical bills if the person survives it. Those bills can easily jump into the hundreds of thousands of dollars.
What about all the people without car insurance even under this program? This would be even worse in your situation.
I don't understand what you mean at all.
Prices for cash-in-hand individuals would be a lot lower under this scheme.
Insurance covers the same costs cash-in-hand individuals pay, so no matter how many people do or do not have insurance the costs remain roughly the same.
Prices for cash-in-hand individuals would be a lot lower under this scheme.
Insurance covers the same costs cash-in-hand individuals pay, so no matter how many people do or do not have insurance the costs remain roughly the same.
This article is completely at odds with Time's article [1] from a few days ago, that showed that out of pocket payers must pay the hospital's chargemaster prices, which are set at ridiculously high levels to act as an anchor in negotiations with insurance companies. If you're not an insurance company, you pay that inflated rate. If you are, you have negotiated it down to as low as 20% of that rate.
I think I trust the Time article a lot more than this linkbait.
[1] http://healthland.time.com/2013/02/20/bitter-pill-why-medica...
I think I trust the Time article a lot more than this linkbait.
[1] http://healthland.time.com/2013/02/20/bitter-pill-why-medica...
I think what's happening is that more physicians are getting sick (pun intended!) of dealing with insurance providers so while that Time article is correct, so is this one.
I have only once come across a physician that didn't take any kind of insurance, but know from other anecdotes that it is becoming more prevalent.
I also had an experience recently where I went to a specialty provider that didn't accept my insurance, so it was handled as out-of-network. However, they billed me only what I would have paid had it been an in-network provider, which was considerably less.
I have only once come across a physician that didn't take any kind of insurance, but know from other anecdotes that it is becoming more prevalent.
I also had an experience recently where I went to a specialty provider that didn't accept my insurance, so it was handled as out-of-network. However, they billed me only what I would have paid had it been an in-network provider, which was considerably less.
Physicians in private practice can pay half of their gross billing in insurance collection costs, including denied claims (which patients are nominally responsible for, but often don't/can't pay) and hiring experts to deal with the deliberately complex and ever-changing paperwork that insurance companies use to induce excuses to deny claims. That's before all other costs, including staff with an actual non-bureaucratic purpose, office space, malpractice insurance, etc.
Personally, I've never seen that work. And it doesn't even sound like a reasonable approach, unless you're trying like hell to stay under some annual or lifetime coverage cap. [1]
Before I had insurance I was getting ~$1200 quotes for procedures. Paying up-front would get that knocked down to ~$1000. Paying cash would get it knocked down to ~$800.
After I had insurance, the claims statements showed the insurance company's negotiated rate at ~$400 for the same exact procedure.
If I let the up-front bills go to collections, the due amounts would drop massively from that $800. But that's not a sustainably advantageous strategy. And even then it's not going to be appreciably better than even paying cash at the insurance company's negotiated rate.
[1] In which case, you really aren't a person who should have a capped medical plan. It's always going to cost you more to carry such a 'cheap' plan. Even if out-of-pocket payments are cheaper than going through your insurance plan and paying the difference. You'd be better off paying more up-front and getting proper coverage, if at all possible.
Before I had insurance I was getting ~$1200 quotes for procedures. Paying up-front would get that knocked down to ~$1000. Paying cash would get it knocked down to ~$800.
After I had insurance, the claims statements showed the insurance company's negotiated rate at ~$400 for the same exact procedure.
If I let the up-front bills go to collections, the due amounts would drop massively from that $800. But that's not a sustainably advantageous strategy. And even then it's not going to be appreciably better than even paying cash at the insurance company's negotiated rate.
[1] In which case, you really aren't a person who should have a capped medical plan. It's always going to cost you more to carry such a 'cheap' plan. Even if out-of-pocket payments are cheaper than going through your insurance plan and paying the difference. You'd be better off paying more up-front and getting proper coverage, if at all possible.
The Affordable Care Act (popularly known as Obamacare) removes lifetime and annual coverage caps on essential healthcare benefits starting in 2014.
Except for all the exceptions, which include pretty much every existing coverage plan, which still holds for companies with said plans, even if you are a new hire.
About 9 months ago, I had a severe bout of food poisoning. I had gotten so dehydrated that I passed out briefly and was physically unable to pick myself up out of an awkward position between the toilet and the wall next to the toilet. I was unemployed at the time (but working, trying to get a software product off the ground on my own) and had no emergency medical insurance. My roommate (thank God I had one) took me to the ER where they gave me a mild anti-nausea drug and pumped me full of fluids.
The hospital only charged me about 40% of the full bill, due to my "hardship" of being unemployed. Still, it was $1200 for nothing a little weed and a gallon of Gatorade wouldn't do. Most of the bill was to have a doctor walk in the room, make a few jokes at me, and leave. If I knew I'd be paying for a standup routine, I would have preferred to go see Louis C.K. and saved $1100.
I still haven't bought health insurance, which is certainly a gamble, but so is buying health insurance. When you buy health insurance, you're betting against the insurance company that you're going to put less money into insurance premiums than you're going to get out as benefits. In the last 2 and a half years of not having health insurance, that one ER trip is the only medical need I've had. In the end, $1200 was a lot less than I would have paid in premiums. So far, I'm winning my gamble.
The hospital only charged me about 40% of the full bill, due to my "hardship" of being unemployed. Still, it was $1200 for nothing a little weed and a gallon of Gatorade wouldn't do. Most of the bill was to have a doctor walk in the room, make a few jokes at me, and leave. If I knew I'd be paying for a standup routine, I would have preferred to go see Louis C.K. and saved $1100.
I still haven't bought health insurance, which is certainly a gamble, but so is buying health insurance. When you buy health insurance, you're betting against the insurance company that you're going to put less money into insurance premiums than you're going to get out as benefits. In the last 2 and a half years of not having health insurance, that one ER trip is the only medical need I've had. In the end, $1200 was a lot less than I would have paid in premiums. So far, I'm winning my gamble.
the problem is that this is a power law gamble. if you lose big (Cancer), it will cost you either your life or your financial life.
Which is actually not that big of a different risk if I had insurance. Just because I have insurance doesn't mean A) that my cancer would be treatable, B) that the treatment would be desirable, or C) that my insurance would be sufficient to cover it. People get screwed over by their insurance companies all the time.
In the specific case of cancer, I'm not sure the treatment is worth it. I've seen a lot of people go through really awful treatments that ruined the quality of their last few months/years, only to die anyway. I don't want to put my families through the emotional and financial burden of that. I've personally never seen any insurance that fully covered someone's cancer treatment.
In the end, cancer always gets you. You could do everything to try to prevent every other cause of death, but cancer will always eventually get you. That's a big part of why I'm working on the things I care about now, rather than waiting for some nebulous "future" when I have "enough money". That future may never come.
In the specific case of cancer, I'm not sure the treatment is worth it. I've seen a lot of people go through really awful treatments that ruined the quality of their last few months/years, only to die anyway. I don't want to put my families through the emotional and financial burden of that. I've personally never seen any insurance that fully covered someone's cancer treatment.
In the end, cancer always gets you. You could do everything to try to prevent every other cause of death, but cancer will always eventually get you. That's a big part of why I'm working on the things I care about now, rather than waiting for some nebulous "future" when I have "enough money". That future may never come.
So, an interesting attempt at making a nice transparent marketplace that I know of is SnapHealth ( https://www.snaphealth.com/ ).
These folks are working to provide an easy directory where you can look up all the doctors in your area and get their pricing for services on a cash basis.
It's interesting watching as the industry goes through these undulations trying to sort itself out.
(Disclaimer: I know the folks working on it, so if you have any comments/questions/concerns I'd love to pass them on.)
These folks are working to provide an easy directory where you can look up all the doctors in your area and get their pricing for services on a cash basis.
It's interesting watching as the industry goes through these undulations trying to sort itself out.
(Disclaimer: I know the folks working on it, so if you have any comments/questions/concerns I'd love to pass them on.)
I came across this article out of frustration. My wife went to a clinic that posted an office visit rate of $99. She presented our insurance card just so the outlay would get logged in the system against our out-of-pocket total, but there was no expectation of actually getting any money back. We have a very high deductible (by choice), and we'll see insurance money only in a really bad year, not unlike auto or house insurance. But since she showed them that card, suddenly the amount we owed shot up to $273. Both the clinic's and insurance company's response to us has been basically: suck it up, we have contracts in place.
I have a high-deductible insurance policy so I just pay up front for medical services (out of an HSA, but it's no different to the doc). Despite paying before the visit I got a bill after an appointment and then another warning that it was late. I called today after researching the CPT code and current billing schedule from my area to confirm that what they wanted was BS and as soon as she looked at my account she said "oh, yea they forgot to add the write off".
Medical billing is so screwed up. I walk in and pay up front and it still somehow counts as a write off. A write off for what I am not sure, I am supposedly paying list price. I assume they really jack up the prices, have a pool for "uninsured" (regardless of merit) and then mark down from there to get a nice tax benefit because they gave a lot of "charity" care. I'd consider the $135 I paid for a < 10 minute visit to be more than ample compensation, whatever they're getting for the $90 write off should be fraud.
Medical billing is so screwed up. I walk in and pay up front and it still somehow counts as a write off. A write off for what I am not sure, I am supposedly paying list price. I assume they really jack up the prices, have a pool for "uninsured" (regardless of merit) and then mark down from there to get a nice tax benefit because they gave a lot of "charity" care. I'd consider the $135 I paid for a < 10 minute visit to be more than ample compensation, whatever they're getting for the $90 write off should be fraud.
Incidentally, if you have an HSA account and can still afford to pay out of pocket, that basically allows your HSA money to continue to accrue over time.
(From http://en.wikipedia.org/wiki/Health_savings_account): "There is no deadline for self-reimbursements of qualified medical expenses. High-income individuals can take advantage of this by paying for medical costs out of pocket, retaining receipts and allowing their accounts to grow tax-free. Money can then be withdrawn years later for any reason, up to the value of the receipts. [23]"
(From http://en.wikipedia.org/wiki/Health_savings_account): "There is no deadline for self-reimbursements of qualified medical expenses. High-income individuals can take advantage of this by paying for medical costs out of pocket, retaining receipts and allowing their accounts to grow tax-free. Money can then be withdrawn years later for any reason, up to the value of the receipts. [23]"
There is a huge difference between the price charged to an insurance company and the already agreed upon allowable amount they will pay. Almost all insurance companies make these allowable amounts available to providers; and it is very rare for a provider to bill the allowable amount. In my experience they usually bill double.
I find any article that doesn't mention the word "allowable" completely disingenuous.
I find any article that doesn't mention the word "allowable" completely disingenuous.
One of the problems with US health insurance is that it is tax deductible only when "paid" by the employer. Making it deductible by everyone would help.
The article does not account for the difficulty of shopping around. If you have the time to travel then it's possible, but often medical care has some urgency so you need to use the closest service provider.
If this really is a trend then the best result would be for people to start taking out catastrophic health insurance. The idea is that they would be insured for very large and very unusual events and cover the routine payments by paying cash.
The article does not account for the difficulty of shopping around. If you have the time to travel then it's possible, but often medical care has some urgency so you need to use the closest service provider.
If this really is a trend then the best result would be for people to start taking out catastrophic health insurance. The idea is that they would be insured for very large and very unusual events and cover the routine payments by paying cash.
It's deductible no matter who pays. I've had a private policy paid for by myself for my family for years. I deduct the cost of that from my taxes.
The bigger issue is people generally are accustomed to larger/bigger plan coverage from employers, and employers contribute a portion, skewing the 'real' price.
High deductible policies help A LOT, but I fear those are going to be harder to use under Obamacare (for seemingly ridiculous reasons). We're paying $330/month for a high deductible policy with $5k deductible. Would be close to $250/month for a $10k I think. And, I think, that's likely how it should be, vs paying $800-$1000/month for a plan with a low (or no!) deductible.
I've had friends say "well, I don't have $10k just sitting around in case there's a medical bill!" A few rebuttals to that mentality:
1. Some of these same people have no issues with financing new cars every few years.
2. You'd have $10k in savings much faster if you were only paying $400/month instead of $1400/month for insurance.
3. We had a big issue a couple years ago, and had an emergency room visit. That was January - we didn't get a bill until April, and it had a number to call to work out a payment plan - you can finance your emergency medical expenses.
I realize these numbers don't work out for everyone in all cases, but neither does employer-provided health care.
The bigger issue is people generally are accustomed to larger/bigger plan coverage from employers, and employers contribute a portion, skewing the 'real' price.
High deductible policies help A LOT, but I fear those are going to be harder to use under Obamacare (for seemingly ridiculous reasons). We're paying $330/month for a high deductible policy with $5k deductible. Would be close to $250/month for a $10k I think. And, I think, that's likely how it should be, vs paying $800-$1000/month for a plan with a low (or no!) deductible.
I've had friends say "well, I don't have $10k just sitting around in case there's a medical bill!" A few rebuttals to that mentality:
1. Some of these same people have no issues with financing new cars every few years.
2. You'd have $10k in savings much faster if you were only paying $400/month instead of $1400/month for insurance.
3. We had a big issue a couple years ago, and had an emergency room visit. That was January - we didn't get a bill until April, and it had a number to call to work out a payment plan - you can finance your emergency medical expenses.
I realize these numbers don't work out for everyone in all cases, but neither does employer-provided health care.
> It's deductible no matter who pays.
That does not square with this[1]: If you are not self-employed, and you don't work for a company that provides health insurance with a cafeteria plan, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that has to be spent on health care before any out-of-pocket medical expenses can be deducted.
[1]http://healthinsurance.about.com/b/2010/01/25/are-my-health-...
That does not square with this[1]: If you are not self-employed, and you don't work for a company that provides health insurance with a cafeteria plan, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that has to be spent on health care before any out-of-pocket medical expenses can be deducted.
[1]http://healthinsurance.about.com/b/2010/01/25/are-my-health-...
I am self-employed, as is my wife. Most people I know with a spouse with insurance choose to stay on that instead, but it's often not really a better deal - it's just habit/convenience.
Also, you can make a one time rollover from a 401K or IRA to an HSA account. So if they switched to the HSA they could start it off by rolling over the amount of their deductible from their retirement account to their HSA account.
Making it deductible by everyone would help.
As would taxing it no matter who pays.
I can't see any good reason why health insurance should be tax deductible - it's a private good with minimal external benefits.
As would taxing it no matter who pays.
I can't see any good reason why health insurance should be tax deductible - it's a private good with minimal external benefits.
Huh?
Say you're a parent. You have a house and three kids. Your spouse makes alot less than you do. Then you get afflicted with a chronic disease like MS.
Without healthcare, you eventually cannot perform at work and get fired or laid off. You have some sort of episode, and end up in the ER. You can't pay your mortgage, and you cannot replace your income. So you stop paying the mortgage and go on food stamps. Then your house gets foreclosed.
Next, your spouse leaves you and takes the kids. You're indigent, your kids are now on Medicaid (at taxpayer expense) and getting assistance for housing. You're behind on child support because your disability case was rejected and your appealing it.
If you add up the costs, you'll find that the cost of providing deductiblity is lower than the costs of all of the other outcomes. Actually, a year of healthcare probably costs less than that 1 ER visit.
Say you're a parent. You have a house and three kids. Your spouse makes alot less than you do. Then you get afflicted with a chronic disease like MS.
Without healthcare, you eventually cannot perform at work and get fired or laid off. You have some sort of episode, and end up in the ER. You can't pay your mortgage, and you cannot replace your income. So you stop paying the mortgage and go on food stamps. Then your house gets foreclosed.
Next, your spouse leaves you and takes the kids. You're indigent, your kids are now on Medicaid (at taxpayer expense) and getting assistance for housing. You're behind on child support because your disability case was rejected and your appealing it.
If you add up the costs, you'll find that the cost of providing deductiblity is lower than the costs of all of the other outcomes. Actually, a year of healthcare probably costs less than that 1 ER visit.
There are a lot of things that are required in life and that are not deductible. Right now the deduction increases prices and makes changing jobs a lot more risky / a pain.
Also, corporate write-offs for health insurance benefits has nothing to do with what happens to your healthcare when you get laid off. If anything not having it be deductible would help because then you're insurance has no reason to be tied to your employment so you could just pay for it yourself like you do anything else.
What would fix your scenario is universal healthcare.
Also, corporate write-offs for health insurance benefits has nothing to do with what happens to your healthcare when you get laid off. If anything not having it be deductible would help because then you're insurance has no reason to be tied to your employment so you could just pay for it yourself like you do anything else.
What would fix your scenario is universal healthcare.
Say you're a parent, and you work at a job which requires you to wear pants. Without pants, you cannot perform at work and get fired or laid off.
[Insert rest of your sad story here.]
Therefore, purchasing pants should be tax deductible.
[Insert rest of your sad story here.]
Therefore, purchasing pants should be tax deductible.
You don't see an external benefit in encouraging people to buy healthcare so that society doesn't have to pay for it later (via Medicare or the emergency room)?
>One of the problems with US health insurance is that it is tax deductible only when "paid" by the employer.
This page (which was the first Google result) disagrees. http://taxes.about.com/od/deductionscredits/qt/healthinsuran...
This page (which was the first Google result) disagrees. http://taxes.about.com/od/deductionscredits/qt/healthinsuran...
No it doesn't. If I work for a company that does not provide health benefits any health insurance I buy is NOT deductible. and that is one of the many odd decisions made.
If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction. People working for "the man" don't get this luxury.
If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction. People working for "the man" don't get this luxury.
>If you are self-employed (which is what the linked page is about) you are both the employer and employee and you as the employer of yourself get the decuction.
Not entirely true. If you're employed by an S corporation you own, the S corporation is the employer, not you, but you can take the deduction.
Not entirely true. If you're employed by an S corporation you own, the S corporation is the employer, not you, but you can take the deduction.
"you cannot deduct any insurance costs for any months you were eligible to participate in a subsidized group health insurance plan through your or your spouse's employer"
My daughter had an itchy eye. I took her to the doctor at a children's clinic affiliated with a well-known children's hospital. They asked for $150 upfront which I paid. The doctor came, examined her for five minutes and wrote a prescription for an allergy medicine that cost over a hundred dollars. Two weeks later we got the bill. They tacked on another $175 for moving us from one room to another. I forgot how they expressed it, but that seemed to be the reason. Over $400 and the medicine didn't really help.
Not long ago there was an article here which reached an opposite conclusion, for hospital costs. It is just unwise not to have health insurance in this country. Hospitals can charge you arbitrary amounts. If you pay cash and have not agreed on everything in advance it is not a good deal. Paying cash probably makes sense for some routine procedures in case you have a high deductible health plan.
I also do not buy the whole "shopping around" thing, even if it worked. The idea that patient should know almost nothing about costs is a right one. The current implementation of this idea suffers from various problems, but as more people get health insurance under Obamacare, things will get better. Ideally, under single payer system, patient gets no bills at all, because all of the providers are "in network", as there is only one network.
There is an entire company (Castlight Health) that is centered around trying to allow people to "shop around" for healthcare. Despite cutting edge technology and access to data no one else gets (through member companies insurance statements) the general public can't use it unless their employer signs up for the service.
Without this capability, shopping around for healthcare is absolutely impossible. How can you shop around when the prices aren't publically listed and aren't known by the staff/physicians?
This article, by the way, is terrible. He gives horrifically bad advice, acting as if the majority of clinics/hospitals actually discount costs for the uninsured. THEY DON'T, as the vastly better researched article "The Bitter Pill" from Time Magazine last week clearly illustrated.
I've been a consumer asking for prices as part of a HSA high deductible health plan before. There is no mechanism to support shopping around at all, and the clinics/hospitals still act on a zero price transparency model. See the "chargemasters" discussed in the Time article. They are databases of prices which are not at all publically accessible.
The federal gov't should step in, and, at a minimum, force hospitals/clinics to make their chargemaster databases publically accessible. This would be a game changer for consumers in health care.
Without this capability, shopping around for healthcare is absolutely impossible. How can you shop around when the prices aren't publically listed and aren't known by the staff/physicians?
This article, by the way, is terrible. He gives horrifically bad advice, acting as if the majority of clinics/hospitals actually discount costs for the uninsured. THEY DON'T, as the vastly better researched article "The Bitter Pill" from Time Magazine last week clearly illustrated.
I've been a consumer asking for prices as part of a HSA high deductible health plan before. There is no mechanism to support shopping around at all, and the clinics/hospitals still act on a zero price transparency model. See the "chargemasters" discussed in the Time article. They are databases of prices which are not at all publically accessible.
The federal gov't should step in, and, at a minimum, force hospitals/clinics to make their chargemaster databases publically accessible. This would be a game changer for consumers in health care.
I think the crime is that the costs are so arbitrary. When hospitals can charge 10 times as much for the same procedure depending on how you are going to pay, someone is getting screwed. Even if your insurance covers it, you're paying that insurance, and the reason the cost for your insurance remains so high is because the insurance company has negotiated to pay $2500 for a $250 procedure.
I mean, when the insurance company negotiates to pay higher prices, they are lying to overstate their benefit and justify higher prices. Hospitals are complicit in this scheme. But hospitals make more from higher margins, and insurance companies can justify greater prices.
It's a broken system when both buyer and seller want to negotiate the highest price they can in secret, away from the person who is funding the buyer.
I mean, when the insurance company negotiates to pay higher prices, they are lying to overstate their benefit and justify higher prices. Hospitals are complicit in this scheme. But hospitals make more from higher margins, and insurance companies can justify greater prices.
It's a broken system when both buyer and seller want to negotiate the highest price they can in secret, away from the person who is funding the buyer.
//One of the problems with US health insurance is that it is tax deductible only when "paid" by the employer.//
Healthcare expenses are deductible, but only those that exceed 7.5% of your AGI. So if you are a software developer making $100K a year at a start up with crappy health insurance, you can start deducting expenses once they exceed about $7500, depending on your tax situation. Of course, health premiums deducted pre-tax from your paycheck are not deductible at all.
Healthcare expenses are deductible, but only those that exceed 7.5% of your AGI. So if you are a software developer making $100K a year at a start up with crappy health insurance, you can start deducting expenses once they exceed about $7500, depending on your tax situation. Of course, health premiums deducted pre-tax from your paycheck are not deductible at all.
tax deductible above 7.5% AGI is very different from tax deductible above $0. Your $100k/yr developer would pay $2,100 in tax on the first $7,500 before the deduction takes effect.
Also, the reason you can't deduct the "pre-tax" premiums is because you were never taxed on them in the first place.
Also, the reason you can't deduct the "pre-tax" premiums is because you were never taxed on them in the first place.
"""A recent article in the Los Angeles Times reported a CT scan of the abdomen costs about $2,400 for patients insured by Blue Shield of California, while the Los Alamitos (Calif.) Medical Center cash price is only $250. That is a 89% discount by my calculation.
[snip]
If you tell them you have insurance, they will be bound to charge you the insurance company’s negotiated rate. Those are the up to 89% higher fees documented in the previous paragraph."""
2400 is 860% higher than 250, not 89% higher.
[snip]
If you tell them you have insurance, they will be bound to charge you the insurance company’s negotiated rate. Those are the up to 89% higher fees documented in the previous paragraph."""
2400 is 860% higher than 250, not 89% higher.
It's not just the costs, it's the treatment. This happened to me: I went into a doctor after I had an accident. He said I needed an MRI and prescription painkiller. I said, doctor, I have no insurance. He said, in that case, you need an X-ray and Tylenol.
This could make HSAs (health savings accounts) much more desirable.
Worse is the case of emergencies or worry, when you have other things on your mind than shopping around and possibly spending days or weeks slogging through the internet for lists of doctor and test center phone numbers. In that case you're literally trapped into paying whatever they demand.
In either case the system is absolutely monstrous and everyone involved (except, of course, the doctors and nurses) should be ashamed of themselves.