Everyone knows that cash makes a huge difference in health care costs. Without blinking an eye, one can get a medical provider salivating at the thought of cash – it’s worth at least a 50% “discount” off inflated health care pricing. Members of the 50% Club can attest to that – http://blog.riskmanagers.us/?p=7253
Employers who sponsor group health plans should consider sponsoring a Cash Health Plan instead. Not only will they save on PPO access fees and other fees such as large case management, medical review, disease management, etc, they will pay much less in actual claim costs. We suspect such a scheme would reduce a group’s health plan costs by 60% or more, without reducing benefits.
If you’re among the few Americans with health insurance, prepare to have your bubble burst.
Cash is king when it comes to footing medical bills, with hospitals discounting rates by as much as 85 percent for people paying the old-fashioned way, according to HopitalBillHelp.org.
The practice isn’t uncommon or even new, but few consumers are aware of the discrepancy.
Long Beach, Calif. resident Jo Ann Snyder shelled out $2,336 for a CT scan after colon surgery, but the LA Times found if she’d paid cash instead using insurance, she would have paid only $1,054. The same was true when they called seven other hospitals.
Snyder’s experience is mirrored nationwide, as hospitals have begun to further incentivize cash payments with discounts. That way cash-strapped patients get cheaper care and hospitals are paid upfront, avoiding the added expense of hiring debt collectors.
Just 54.2 percent of U.S. employees were enrolled in health care plans as of April 2011, down from 60 percent in pre-recession 2007. That leaves 40 million Americans without health care, the cost of which will exceed the average household income by 2030, according to a recent study published in the Annals of Family Medicine.
Before you think about hitting the ATM and kicking your insurer to the curb, keep this in mind: High-deductible health care plans are on the rise and if you pay cash for services, the expense won’t count toward your spending requirement.
One in five consumers have chosen high-deductible insurance plans, an all-time high trend that’s led many to forgo crucial preventive services that could lower medical costs down the road.
If you’re in doubt, try running the same test as the Times by calling up your hospital or medical provider to find out cash and insurance rates.
Otherwise, visit your hospital’s website to see if it’s posted a “Charge Master,” or detailed list of services along with the estimated upfront rates. It’s no picnic to comb through, however, as each list contains hundreds if not thousands of items
