Health plans

Self-pay may be better with high-deductible health plans – Quartz

Sometimes, even the insured have an interest in paying out of pocket.

This may seem counter-intuitive to policyholders because when they receive their bills, they see the discount their insurance company was able to obtain from the list price.

For example, according to my own insurance report, this year I accessed services for a total list price of $657, although insurance negotiated a discount of $408, reducing the cost to $249. Does this mean that without insurance I would have had to pay $657 to obtain the same services? Not necessarily.

Quite often, the so-called self-pay price for services, or the price an uninsured patient is asked to pay, may be lower than the price negotiated by insurance companies— and sometimes even less than a copayment, too.

Self-pay can be half the insurance rate

The difference between self-pay and insurance rates can be significant. For example, a chest X-ray at the Mayo Clinic hospital in Phoenix, Arizona, costs $154 for self-pay and $304.50 with Blue Cross Blue Shield, according to data collected by Solv Health, a platform connecting patients with urgent care appointments. Similarly, Aetna Insurance’s negotiated price for stitches at Bellevue Hospital Center in New York City is $1,057, while self-pay is about half that, at $544. At the same hospital, the price charged to insurance for a wrist X-ray is $451 compared to $280 if you pay yourself.

There are several reasons for these discrepancies. First, insurers have limited incentive to negotiate bills as much as they can, as they end up passing the costs on to policyholders. Second, providers spend a lot of money managing insurance bureaucracy, and a patient’s out-of-pocket payments reduce all of that, allowing for a big discount.

Typically, the self-pay price is higher than the copay required by the insurance, but not always. Paying out of pocket for a chest X-ray, for example, can cost as little as $70 at an urgent care clinic in Brooklyn, New York (and as little as $24 elsewhere in the country), according to Solv Health, which released an online tool that allows patients to search for self-pay prices common emergency procedures. By comparison, the co-pay for a chest x-ray can be as high as 25% of the typical negotiated rate, or about $125.

High-deductible plan holders benefit the most from price comparison

Knowing the self-pay price is especially important for the large number of Americans with high-deductible health care plans, who often have to spend thousands of dollars in the full insurance-negotiated price before their insurance does not come into force. According to the latest data from the Bureau of Labor Statistics, in 2018, 45% of all workers privately insured had high-deductible plans, and this shares now around 60%according to registration data by state.

For these policyholders, the decision to let their insurance cover the costs or pay themselves may depend on many factors, including the likelihood that they will end up paying their deductible. It’s not an easy decision to make, and it’s not an insurance company helping to make it.

Medical providers, and often even the insurance companies themselves, may not be able to quote an exact price for a service until billing is done; it often takes weeks to find out the total bill. “Today when you call your insurance company, their answer is ‘it depends’ because that’s the veil they’ve been hiding behind so far,” says Heather Fernandez, CEO of Solv Health.

Self-paid price information, on the other hand, is more available than ever. Hospitals are mandated to share their prices, including discounted spot rates. Many are still not compliant or make it nearly impossible to access information, but online tools like Solv HealthWhere Health care prices help patients compare prices from different providers to make more informed decisions. For many patients with high deductibles, knowing the self-pay price would allow them to decide if they want to prepay or wait for the insurance bill.

“Maybe your real decision is certainty on that price versus uncertainty, and something that I would potentially learn in 30-60 days,” Fernandez says.