Article Referred by Mike Dendy
Many Americans are often overpaying for services when they use their insurance…….Why pay $2,400 when you can pay $541? More plan sponsors are adopting cash pay claim strategies……………
Nov 8, 2023
Insured Americans have been getting ripped off for years. Fortunately, Americans in two states have new resources to protect themselves.
New state laws in Tennessee (effective July 1) and Texas (effective September 1) now provide insured Americans on individual, small business plans the option to save money when they pay cash for more affordable services, while still getting deductible credit. Tennessee also extended this offer to public employees. These reforms knock down barriers preventing patients from accessing the most cost-effective care, while simultaneously laying the foundation of a real market within the state healthcare systems.
We recently made some phone calls in Nashville and found we could pay $541 in cash for a colonoscopy, far less than the $2,400 average rate the three largest insurers in the state negotiated. In fact, we found at least four providers in downtown Nashville that would charge less if we paid cash instead of using our insurance card. In other words, many Americans are often overpaying for services when they use their insurance. Under this new state law, people are free to access the $541 option and not be penalized by their insurer for going out-of-network.
Of course, it’s not the insurance companies overpaying, it’s the patients. Around 94 percent of Tennessee employees have an insurance deductible, which means they pay 100 percent of most non-preventative health care costs up to their deductible. Only after that does the insurance company start paying. For many patients, a $2,400 colonoscopy comes directly from their wallets and bank accounts, leaving less money for food, mortgage payments, and family expenses.
Under the new law, if a patient negotiates a lower price for a service covered by their insurance, and if the negotiated price is less than the average amount paid by their plan, the patient can submit a receipt to their insurer. The insurer “shall count the full amount that the covered person paid out-of-pocket toward the covered person’s deductible, coinsurance, copayment, or other cost-sharing amount.” In short, a patient is free to use any provider that offers more affordable care, and their insurance company cannot discriminate against them for doing so.