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For those unfamiliar with the weirdness of the US insurance system: Nobody pays the prices on these bills. This is a pre-insurance bill with inflated values: >
by PragmaticPulp 5y ago
For those unfamiliar with the weirdness of the US insurance system: Nobody pays the prices on these bills. This is a pre-insurance bill with inflated values:
> Why am I sharing one of her (pre-insurance) bills?
Insurance companies have negotiated maximum allowed prices for every line item on this bill. Different insurance companies will have different negotiated rates.
The insurance companies will pay either the minimum of their negotiated rate for each service or the hospital’s biller charge, whichever is lower. As such, the hospitals will greatly inflate their costs presented to insurance companies to avoid leaving any money on the table. This bill would go through a round of price reductions with the insurance company that can be very significant (I’ve seen $1000+ pre-insurance bills turn into less than $100 after insurance negotiated rates were applied).
I’m not defending the system — Obviously it’s not great. However, it’s a mistake to look at these pre-insurance bills and assume that anyone is actually paying those amounts.
Also, US insurance policies have what’s known as an “out of pocket maximum” that is the upper ceiling on how much you can pay for medical services in a year before insurance covers 100%.
Also keep in mind that about half of US births are paid for by Medicaid, which is one of our socialized healthcare programs. The issue is often misrepresented as the US not having socialized medicine, but the reality is that a lot of US citizens are already covered by our socialized medicine programs in one way or another. The issue is the people who fall through the cracks by either not qualifying for these programs/subsidies, not being covered by their employers, and not buying a subsidized insurance plan on the ACA market.
Again, not defending the system, but I think it’s important to know how these systems work to understand why Americans aren’t actually paying these multi-million dollar pre-insurance bills, which is why the voting public is often so complacent about exploring other options.
- AlexandrB 5y agoImagine if any other market operated like this. You walk into BestBuy and the price of a TV is $50,000. But if you take it to the cashier you will be charged some lesser amount based on what your credit card company negotiated with BestBuy. Madness.
- sidewndr46 5y agoThis kind of actually does describe buying a car in the US. It is generally not permitted to buy directly from the manufacturer, so you need to go through a dealer. It is kind of messed up presently, but in normal times there isn't really a "vehicle shortage" or whatever it is getting called now. The advertised price can be completely disconnected from the actual price you pay.
- only_as_i_fall 5y agoThere are problems with car buying but I'd argue they are different problems. At least when you go to a dealership they'll give you a firm price before you sign the paperwork. The biggest issue I have with health care is that this isn't the case.
- cascom 5y agoThere is another market, it’s called higher education. The vast majority of college students are not paying “sticker price” for their education
- Jcowell 5y agoYes but at least higher education’s “negotiating” (which really isn’t negotiations since the avenues to get the cost down is far easier with Scholarships and FAFSA) is more upfront and better known.
- only_as_i_fall 5y agoActually the situation is a bit worse than that. It'd be like if you bought the $50k TV and you only knew what your price was once it showed up on your cc statement. Also the purchase is non-refundable...
- lifeformed 5y agoAlso, if you don't buy the TV, you will die.
- sonotathrowaway 5y agoMedical bankruptcy is the most common reason people declare bankruptcy in the United States, making up some 70% of all new bankruptcies in the US. Being asked to pay for medical bills you cannot afford is incredibly common in America, to the point that it’s the main reason people declare bankruptcy.
- TheCondor 5y agoBy “nobody” do you mean literally nobody or nobody that isn’t otherwise marginalized? There is such a thing as medical induced bankruptcy in the US. There are bill collectors who collect medical debt. I would be utterly shocked if those prebills were not used to scare and shock certain groups of people. Nor would I be surprised if there are modern indentured servants paying off an impossible debt based upon them in some jurisdictions in the US. Maybe generally, if you’re employed, white, speak English, etc… you’ll never pay that stuff