Many of us have been offered a discounted cash price for health care services recently instead of filing claims with our insurance carriers. What is this all about?
As insurance carriers negotiate deeper discounts with providers and healthcare offices have to fight to get claims paid, these providers sometimes find it more cost efficient to simply charge a cash price. This is often lower than the rate negotiated by the insurance carrier so consumers are understandably tempted to take advantage of the offer.
Does this mean that our health insurance is not worth the premium we pay for it? The insurance carriers started negotiating discounted rates many years ago in an effort to address cost-containment issues and there are still many situations in which insurance discounts or plan copays are a much better option. We need to look at each situation as it comes up and make the best choice.
Are our doctors, labs and other providers taking advantage of a broken system? The health insurance system is certainly not efficient, but we can really not lay all the blame at the feet of our providers. When we take into account the cost of getting claims paid as providers have to file and refile paperwork and the ongoing reduction in reimbursement rates, it is no wonder providers are jumping on cash when they can.
When should we take the better pricing and what do we give up when we do? Beware that paying cash prevents us from filing the claim with our insurance carrier which can be a problem if claims reach our out of pocket maximum later in the year.
So, if the savings on a particular service are significant and we do not expect a high claims year, by all means we should take advantage of the dollars saved. On the other hand, if claims seem to be accumulating significantly and there is a chance that we may meet our out of pocket maximum, beware that paying cash may mean that we may actually pay more in a year than the plan maximum.
We should all educate ourselves on what we spend for healthcare. Sadly, most of us are more informed about expenses that are much less significant and have less impact on our long term health. Healthcare consumerism needs to become a way of life for all of us or pricing will exceed our ability to pay for services we need.