Quote:
Originally Posted by milt
Why does an unisured party get billed for more than an ins co? And, what's more, the ins co pays even less than the listed charges. It's time for the same bill for like services to be sent out no matter where it goes and who pays it.
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Because insurance companies "buy in bulk." It's a similar concept to why a stick of gum costs more (per stick) when you buy a pack from 7-11 compared to the price per stick if you were to buy an entire tractor trailor load from Wrigley's. The insurance company "brings" tens of thousands of potential patients to a provider. An individual household might consist of 4 or 5 consumers, in comparison.
At the same time, it's also unfair how insurance companies "negotiate" their reimbursement rates with providers. Insurance companies definitely hold the cards, in this regard. It's not an equitable, two-way negotiation. Rather, it's a take-it-or-leave-it proposition. The insurance company will tell the provider what it's willing to pay. Often that's based on some sort of percentage of going Medicare rates (i.e. 85%, 100%, 150% of what Medicare will pay for that service). Health care providers are single entities or small groups, but certainly nothing on the scale of an insurance company representing tens of thousands of consumers and cornering 10-30% of the market. It's illegal for providers to get together to negotiate with insurance companies. That would be anti-trust. But there's nothing to stop insurance companies from talking amongst themselves about the rates they offer for reimbursement.
So the option, for a provider, is to "leave it" and simply not sign on as part of the provider network. The problem is that there are few people like billyboy who do not have insurance, but have the means and integrity to pay their medical bills. I'd have to say that roughly 90% of the "self-pay" patients (what you're listed as when you don't have insurance) that I get called to see in the ER weasel out of paying their bill. At least my bill. I'd bet they skip out on paying the hospital/lab/ER doc/x-ray bills, too. But that's just a WAG. Those tend to be the same people who, while I'm sewing them up, promise that they'll pay whatever it costs to get the job done right. Never hear the insured promising that.
So a provider can bill an insurance company whatever that provider wishes (can't do that with Medicare--that's a federal offense), and the insurance company will pay whatever the contract (that they essentially wrote) stipulates. Some states allow balance billing, where the provider can then bill the balance (whatever the insurance company didn't pay of that bill) to the patient directly. California used to allow that. However, last month the state supreme court had a decision that struck that down. So it's not written in the lawbooks, but it's in legal precedence. It'll protect consumers from getting gouged by health care providers. But, in light of how these insurance contracts realistically are written and negotiated, it's also terribly unfair to providers. Given the recent track record of outfits like AIG and the rest of the insurance industry, what's the likelihood they'll pay fair reimbursement vs. lining their own pocketbooks?