Skip to comments.Insured patients can save money by pretending to be uninsured
Posted on 01/05/2014 7:01:07 AM PST by RKBA Democrat
Ive mentioned countless times before that paying directly for health care can result in big savings, especially when seeking treatment at providers and facilities that cater to self-pay patients. This applies to people who are uninsured, have high-deductible plans, or who have more comprehensive health insurance plans that dont cover a particular treatment or provider.
There is one pretty big caveat for the insured, however. Because of the way insurance contracts are typically structured between providers and insurers, the provider is required to charge the full negotiated rate they and the insurer have agreed to, even though the patient is paying the entire bill themselves. This creates the odd situation where someone who is uninsured will get a better price than someone with insurance, even if both of them are paying the whole bill themselves.
I recently stumbled across this post by Dr. Dike Drummond of The Happy MD blog, which explains better than I can why patients with insurance might be better off hiding the fact that they are insured:
Hide your health insurance status and pay cash instead
We may be seeing a time when the uninsured person writing a check begins to get a much needed break. This new pricing trend is causing some interesting ripples as more and more people become aware of the sometimes dramatically lower prices for cash on the barrel head.
Here are two examples:
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.
Another local California hospital charges insured patients $415 for blood tests that cost only $95 in cash. This time its a mere 77% discount.
Now, there are some interesting rules to the cash discount game.
First, to get the discounted prices, patients would have to withhold insurance information from hospitals. If you tell them you have insurance, they will be bound to charge you the insurance companys negotiated rate. Those are the up to 89% higher fees documented in the previous paragraph.
However, if you dont tell them your insurance and pay cash instead, the cash payments dont apply to your annual out-of-pocket spending limits.
For a 89% discount, I am pretty sure there are times it would be worth it to keep your little secret. If you are healthy and only need an occasional visit to the doctor you now get to make the judgment call on cash discount vs. paying five times as much and applying it to your deductible
In perhaps the most interesting reaction to cash discounts, a patient who was unaware of the discounted cash pricing last month filed a lawsuit against Blue Shield of California for unfair business practices, breach of good faith and misrepresentation over her medical bills after she was charged $2,336 for a CT scan that would have cost her $1,054 in cash.
Blue Shield said it cannot promise or represent that there could not be providers who will charge someone less out-of-pocket cost for a service than she would pay if the Blue Shield contract rate applies.
There are two challenges that patients with high deductibles will have in embracing this strategy. Dr. Drummond mentions the first one, which is that not telling the provider you have insurance means it wont count towards the deductible. For most people this wont be a problem because they dont usually get anywhere near their deductible amount. And paying lower prices as a self-pay patient will make you even less likely to hit your deductible.
But if you know that youre going to hit your deductible in any given year, perhaps because of a planned procedure, it might be worth it to go ahead and just let them know you have insurance.
The other problem is that its possible that the rates for a procedure are less for insured patients than for someone paying cash. Usually this is going to be the case at practices that arent cash-friendly to begin with, so be sure to ask right up front if they offer discounts for patients who pay cash. If theyre flummoxed by the question and start explaining that they need to know what insurance you have before they can give you a price, chances are youre not going to get a discount, and youre better off either giving them your insurance information or finding another practice.
Assuming they do tell you they give a discount for cash, youll want to find out how much it is. Thats not always going to be easy (and dont try this in the event of a medical emergency), but if you know the treatment you need or type of visit youre seeking, it shouldnt be too difficult.
Unless youre dealing with a cash-only practice or using a service like MediBid, theyll ask you for your insurance, you dont have to lie to them and tell them youre uninsured, just stay vague and say things like Ill be paying for this myself or my insurance isnt going to be covering this. This should cover you in the event you do wind up using your insurance in order to get a better price.
Then youll need to find out what your insurer will pay for that treatment, or what the allowed charge is. In the past that was nearly impossible to find out, but today some insurers will give this information to the people they insure. You can also use sites like Healthcare Blue Book and Pricing Healthcare to see what insurers are paying, on average, for procedures in your area or even specific facilities.
If the allowed amount is more than the discount for paying cash, its probably worth considering keeping your insurance card in your wallet or purse and. You can still use your health savings account (if you have one, of course) to pay for it, you just wont be able to apply it to your deductible.
It may seem strange, especially given the widespread assumption that one benefit to having health insurance is that you get discounted rates at doctors offices and hospitals, that hiding your insurance can get you a better price for your health care. But there are lots of oddities in the world of health care pricing, and knowing this one could save you a lot of money.
Hide health your insurance status and pay cash instead: http://www.kevinmd.com/blog/2012/06/hide-health-insurance-status-pay-cash.html
Health care bluebook: https://www.healthcarebluebook.com/
Pricing healthcare: https://pricinghealthcare.com/welcome
A problem for self-pay may not be such a good idea, especially if the patient has recurring medical needs.
Assuming the patient does enroll in Obamacare, they still need to meet the annual deductible. By going self-pay, they are not paying into the deductible. Thus, if they did have a big medical emergency need, they would still face the huge Obamacare deductible.
Expect Congress/the Admin to come out against self-pay and concierge-type medical facilities.
Like I said before. Other than full dictatorship, what prevents one from having a supplememtal international plan? Once again, Obamacare is zero care and plain confiscation of private insurance funds.
“A problem for self-pay may not be such a good idea, especially if the patient has recurring medical needs.”
Agreed and the article notes that. If you have an ongoing medical problem and are likely to hit your deductible, this might not be a good idea in the long run. However, given the sky high deductibles under deathcare, most folks are never going to get to use their “insurance” in any case.
Wow, thanks for the links!! You’ve done some of us a great service.
Our insurance is so screwed up now, that we are in the process of working out a deal like this with our chiropracter. He’s the only doc we see regularly, the only times we go to modern docs are for trauma issues. Luckily those issues are few and far between.
“Like I said before. Other than full dictatorship, what prevents one from having a supplememtal international plan?”
Nothing that I’m aware of. Interesting exemption is that expats are not required to sign up if they spend I believe 330 plus days out of the US each year.
If you have an Obamacare plan with one of those ridiculously high deductibles like $12,000 you would be money ahead to simply deny having insurance and pay cash for routine treatment as you would be paying for it out of pocket anyway. Perhaps Obamcare will reduce costs in an unexpected way because with the ludicrous coverage it provides, consumers will be paying for more of their medical care in cash and as this article suggests getting a better price. Since many providers accept credit cards you might even get a separate credit card to pay for your medical costs so you could spread out your cash payments
Thanks for the Post, great info....
I joined a healthcare co-op with a $10,000 deductible. I only wanted insurance/sharing for something catastrophic. My premium (monthly contribution) is less than half what I was paying before being cancelled by Blue Cross. If I don't disclose my coverage and can get discounts in excess of 70% of the insurance company pricing I'm way ahead. If these out of pocket expenses exceed 10% of my net annual income I get to deduct the excess.
We need to think about how to act in our own best economic interest rather than being forced into a collective mentality overseen by people exempted from it.
But most likely you are already in the ‘system’. A hospital WANTS you to have insurance...they can charge more. A hospital is going to ask you lots of questions and your name and insurance will be at the top along with your date of birth, of course.
Unless you have fake ID, etc., how would this be possible to get into a hospital for anything or see a doctor who knows he’ll get into trouble if he bucks the system?
That’s a cool article. Thanks for the link.
Y’all are welcome.
You just say you’re going to pay for it yourself. No reason to lie. You’re under no obligation to use your health “insurance”; keep in mind that it’s a contract between you and the “insurance” provider, not the health care provider.
Ping to 0deathCare alternatives...
In reality how many people spend more than the now $8000 out of pocket expense of Obamacare? Yes, tragedies do happen and it is expensive. What is the most realistic thing to happen to us? A broken arm? A slip and fall in the winter? A nasty cut that needs stitches? These things are a couple thousand at most. And in the event of a really terrible event there are so many programs to help pay for these events and even financing can be arranged. (At least there use to be.) I had to have life saving surgery once and stayed a week in the hospital. When I woke up the first thing I saw was the hospital financial assistance people with dozens of options.
Now Obamacare had to mess it all up.
By the way, when I told the hospital I will be paying cash suddenly EVERYTHING was negotiable and I paid less than half of what they had planned to bill an insurance company. And all the disposable equipment they threw away? I didn’t pay for any of it because if I had to pay for it it was my property and I wanted it. If people saw what they are paying for and being charged the medical system would be fixed overnight.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.