Oh the games people play with your medical dollars. Long before the Affordable Care Act, i.e. Obamacare, was implemented, the insurance companies and the government were playing very deceiving games with your medical bills. This practice will continue under the Affordable Care Act. Let me explain:
Recently, a hospital administrator explained to me that when the hospital bills the insurance companies or Medicare, they will receive on average 38% of the amount billed. This percentage may vary in different areas, but it will be close to this amount.
Now let’s do the math using an imaginary example. Let’s say you have an insurance plan with a $1,000 deductible followed by an 80/20% division once the deductible is met. To make the math simple let’s use even figures and say that your medical bill was $11,000. You are charged the $1,000 deductible, and the $10,000 that remains is split in your 80/20 plan. You are expected to pay $2,000 more for a total of $3,000 and the insurance provider “covers” the other $8,000. If the medical provider will only receive about 38% of the amount billed to the insurance carrier, that means the insurance carrier will pay $3040. ($8,000 X 38% = $3040) Thus the medical provider will receive $6040 – $3,000 paid by you and $3040 paid by the insurance provider.
This is called an 80/20% insurance coverage with a $1000 deductible. I don’t think I would call that funny math. I would call it flat out deception. Honesty would refer to it as a 50/50% plan. But, who would pay big money for a 50/50% plan?
Now the medical providers, knowing what percentage they are actually going to get paid, must raise their prices so that they will get the payment they need. Therefore we have skyrocketing medical bills caused by insurance providers and government.
To make this scenario worse, if a medical provider allows self-pay clients to just pay the amount that the provider would receive if the client were insured, the insurance company and government will often “punish” the medical provider for not charging the full amount charged to the “covered” clients.
As government takes more control, this situation is only going to get worse.
Steve Casey, Freelance Writer