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One thing that's hard to understand from the outside is that almost nobody actually pays those mind-blowing $200K hospital bills. US hospitals charge on a slidi

One thing that's hard to understand from the outside is that almost nobody actually pays those mind-blowing $200K hospital bills. US hospitals charge on a sliding scale based on the applicants' families' ability to pay. (I don’t mean to belittle your comment about universities which is factual and helpful. I’m just pointing out that US education system is just as fucked up as the US healthcare system the OP is talking about.)

Aurornis 1y ago
Also very true, and a good point. Even people in the US don't understand why those $200K hospital bills aren't real. Insurance providers (including government programs) have a fixed limit for what they pay for procedures. They pay min(billed_amount, allowed_amount) so providers don't want to risk leaving money on the table by having billed_amount < allowed_amount. To ensure this doesn't happen, they bill an arbitrarily high number with the expectation that insurance will lower it down to some much smaller number. So every time you see posts on the internet where people talk about their "$200K hospital bill" they're always talking about that arbitrarily high value. If you have to pay cash for some reason, they will reduce the value to the cash pay amount which is in line with the insurance paid numbers. Nobody ever pays those high hospital bill amounts.
- mindslight 1y ago
  Note that another word that straightforwardly describes this behavior is "fraud". Medical bills aren't like a bill from a car mechanic where there is a contract (either written or at least implied because the mechanic will readily give you estimates and quotes). In the medical context, the only contract in the picture is possibly between the medical provider and the healthcare management organization. It would be fine if providers only sent the fake bills to them as they're both willingly playing this perverse game. But the problem is when they send their fake numbers to patients as if they're some kind of legitimate bill. Medical bills to patients are presented on a "cost reimbursement" basis - helping you cost them this much, so you are responsible for reimbursing them. By inflating the numbers 3-5x they are straight up lying about the costs they incurred. That's fraud.
- TheOtherHobbes 1y ago
  If the bills aren't real, why are there half a million medical bankruptcies every year? Why do 41% of Americans have some form of medical debt? https://www.kff.org/health-costs/kff-health-care-debt-survey/#c7f7c77b-dec4-4baf-bed1-78e3522b4f46 https://www.kff.org/health-costs/kff-health-care-debt-survey...
- throwway120385 1y ago
  That depends a lot on your insurance. For example, our out of pocket for my son's birth was somewhere in the neighborhood of $10k after insurance. I've met tons of people who would be bankrupted by that amount. What you're describing isn't true for people on High Deductible Health Plans, and those plans are a bit of a racket because they're frequently paired with HSAs where the employer gets to pocket anything left in the account at the end of the year. My son was essentially unplanned, in the sense that we gave up on trying to have a kid but weren't using birth control because over the previous 3 years we had not had a successful pregnancy. So an HSA would have been no help for us.
  - tptacek 1y ago
    HSA funds are meant to roll over. Your employer generally should not be pocketing whatever's left over in the account. The idea is that many (most?) people are better off with a lower premium and higher deductible given that most years (for most people) aren't characterized by high medical expenditures; HDHP+HSA is closer in nature to actual "insurance", rather than a structured financing plan for health care.
  - lesuorac 1y ago
    FSA's not HSA's are use-it-or-lose-it. If you have a FSA I strongly suggest that you get an HSA instead. https://www.fidelity.com/learning-center/smart-money/hsa-vs-fsa https://www.fidelity.com/learning-center/smart-money/hsa-vs-...
    - maxerickson 1y ago
      A lot of people with FSAs will have insurance that disqualifies having an HSA. I have the paranoid idea that they designed FSAs in such a goofy way for budget scoring and it drives me nuts.
      - tptacek 1y ago
        The preceding comment was discussing HDHPs, which depend on HSAs.

Aurornis 1y ago

Also very true, and a good point. Even people in the US don't understand why those $200K hospital bills aren't real. Insurance providers (including government programs) have a fixed limit for what they pay for procedures. They pay min(billed_amount, allowed_amount) so providers don't want to risk leaving money on the table by having billed_amount < allowed_amount. To ensure this doesn't happen, they bill an arbitrarily high number with the expectation that insurance will lower it down to some much smaller number. So every time you see posts on the internet where people talk about their "$200K hospital bill" they're always talking about that arbitrarily high value. If you have to pay cash for some reason, they will reduce the value to the cash pay amount which is in line with the insurance paid numbers. Nobody ever pays those high hospital bill amounts.

mindslight 1y ago
Note that another word that straightforwardly describes this behavior is "fraud". Medical bills aren't like a bill from a car mechanic where there is a contract (either written or at least implied because the mechanic will readily give you estimates and quotes). In the medical context, the only contract in the picture is possibly between the medical provider and the healthcare management organization. It would be fine if providers only sent the fake bills to them as they're both willingly playing this perverse game. But the problem is when they send their fake numbers to patients as if they're some kind of legitimate bill. Medical bills to patients are presented on a "cost reimbursement" basis - helping you cost them this much, so you are responsible for reimbursing them. By inflating the numbers 3-5x they are straight up lying about the costs they incurred. That's fraud.
TheOtherHobbes 1y ago
If the bills aren't real, why are there half a million medical bankruptcies every year? Why do 41% of Americans have some form of medical debt? https://www.kff.org/health-costs/kff-health-care-debt-survey/#c7f7c77b-dec4-4baf-bed1-78e3522b4f46 https://www.kff.org/health-costs/kff-health-care-debt-survey...
throwway120385 1y ago
That depends a lot on your insurance. For example, our out of pocket for my son's birth was somewhere in the neighborhood of $10k after insurance. I've met tons of people who would be bankrupted by that amount. What you're describing isn't true for people on High Deductible Health Plans, and those plans are a bit of a racket because they're frequently paired with HSAs where the employer gets to pocket anything left in the account at the end of the year. My son was essentially unplanned, in the sense that we gave up on trying to have a kid but weren't using birth control because over the previous 3 years we had not had a successful pregnancy. So an HSA would have been no help for us.
- tptacek 1y ago
  HSA funds are meant to roll over. Your employer generally should not be pocketing whatever's left over in the account. The idea is that many (most?) people are better off with a lower premium and higher deductible given that most years (for most people) aren't characterized by high medical expenditures; HDHP+HSA is closer in nature to actual "insurance", rather than a structured financing plan for health care.
- lesuorac 1y ago
  FSA's not HSA's are use-it-or-lose-it. If you have a FSA I strongly suggest that you get an HSA instead. https://www.fidelity.com/learning-center/smart-money/hsa-vs-fsa https://www.fidelity.com/learning-center/smart-money/hsa-vs-...
  - maxerickson 1y ago
    A lot of people with FSAs will have insurance that disqualifies having an HSA. I have the paranoid idea that they designed FSAs in such a goofy way for budget scoring and it drives me nuts.
    - tptacek 1y ago
      The preceding comment was discussing HDHPs, which depend on HSAs.