
Hide your health insurance status and pay cash instead - LVB
http://www.kevinmd.com/blog/2012/06/hide-health-insurance-status-pay-cash.html
======
acabal
A good start, but shopping around is hard, if not impossible. I always try to
do it when getting care in the states, and more often than not the person
you're talking to has no idea what they charge, or else won't discuss it
without having the doctor's orders in hand first. ("How much does a chest
x-ray cost?" "We'll assess costs after the doctor orders some tests." "But how
do I know if I want to see the doctor at this hospital if I don't know how
much everything costs?")

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.

~~~
mgkimsal
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.

~~~
cpher
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.

------
UnoriginalGuy
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.

~~~
dougk16
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.

~~~
maxerickson
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).

~~~
dougk16
$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.

~~~
maxerickson
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.

~~~
dougk16
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.

------
pdx
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...](http://healthland.time.com/2013/02/20/bitter-pill-why-medical-
bills-are-killing-us/)

~~~
HeyLaughingBoy
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.

~~~
kps
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.

------
roc
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.

~~~
khuey
The Affordable Care Act (popularly known as Obamacare) removes lifetime and
annual coverage caps on essential healthcare benefits starting in 2014.

~~~
tracker1
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.

------
moron4hire
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.

~~~
outside1234
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.

~~~
moron4hire
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.

------
angersock
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.)

------
LVB
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.

------
jonknee
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.

------
msluyter
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]"

------
sixothree
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.

------
casca
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.

~~~
mgkimsal
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.

~~~
fr0sty
> 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-...](http://healthinsurance.about.com/b/2010/01/25/are-my-health-
insurance-premiums-tax-deductible.htm)

~~~
mgkimsal
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.

------
davidroberts
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.

------
bearmf
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.

~~~
bearmf
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.

~~~
JPKab
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.

------
codva
//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.

~~~
fr0sty
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.

------
philsnow
"""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.

------
joshuaheard
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.

------
jackmoore
This could make HSAs (health savings accounts) much more desirable.

