Risk of Higher Healthcare Costs With Insurance
TL/DR –
Chelsi Ross, insured at the time, visited the ER for chest pain and paid more than if she were uninsured, even after discounts from her insurer. Her total bill for tests and scans during her four-hour ER visit totaled $11,300.75, from which Methodist Hospital offered a discount of $3,503.23, leaving Ross with an out-of-pocket payment of $5,605.49. Despite being insured, Ross and many others are still dealing with medical debt years later, pointing to the failures and irrationality of the US healthcare and insurance system.
Insured Patients Paying More than Uninsured?
Chelsi Ross, despite having insurance, found herself paying more for her ER visit than uninsured patients. Four years later, she is still burdened by the bill from Methodist Hospital in Richardson, Texas. The cost for her ER visit, which included blood tests, X-ray, EKG, and CT scan, amounted to $11,300.75. Despite the healthcare charges being inflated, Ross found herself at a disadvantage due to the irrational structure of our healthcare and insurance system.
Ross’s high-deductible Aetna insurance plan required her to spend $5,000 plus her co-insurance amount before insurance coverage could commence. With over 50% of privately insured Americans on similar plans, she essentially became a self-pay or cash patient.
Methodist Hospital applied a “negotiated rate” or “allowed amount” for contracted insurance companies, effectively discounting the “sticker price.” In Ross’s case, the $11,300.75 “sticker price” saw a “discount” of $3,503.23. However, the expected amount from Ross or her insurer was still nearly $8,000. After Aetna’s payment of $2,192.03, Ross was left to foot a shocking amount of $5,605.49 out of her pocket.
On the other hand, Methodist Hospital offers a “cash” discount of 45% off the sticker prices. This would have brought Ross’s total bill down to $6,215 had she opted to pay in cash. As the average annual health insurance premium stands at $8,345 for an individual, Ross would have saved over $7,700 without insurance on this occasion.
Insurance coverage may not necessarily save from potential medical debt. As reported by Kaiser Family Foundation and New York Times, up to 61% of people with medical debt have insurance. This debt situation can trigger financial instability and force afflicted families to cut back on essentials like food, clothing, or other necessities.
Several policies, like the federal Price Transparency Act, the Transparency in Coverage Act, and the No Surprises Act, have been implemented to address healthcare-induced financial catastrophes. Unfortunately, these initiatives wouldn’t have benefitted Ross due to the nature of her case.
While patients have the right not to disclose their insurance status if intending to pay cash, as protected by the Health Insurance Portability and Accountability Act, it is often difficult to make informed decisions regarding healthcare services due to unknown costs and potential insurance payments.
Even after multiple attempts to request a cash discount from the hospital, Ross continues to receive calls for settlements and payment plans, a stark reminder of the flaws within our healthcare system. Despite residing in one of the wealthiest countries globally, many Americans still struggle with the high cost of healthcare, arguing for urgent system reform.
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