Are health insurance companies overpaying or are they just fudging?

Quote from travfar : I recently got my yearly "free" physical. My health insurance company sent me a statement saying that the payout on that was $338. I thought that was excessive so I called up my doctor and asked them how much a physical would be if I had no health insurance. They said $115. I thought insurance companies negoitiated lower rates since they have buying power. Why did my health insurance company say they had to pay them $338 when my doctor says it's costs $115? There was nothing special about my physical. It was the standard turn my head and cough affair. I was in and out in less than 10 minutes. So did my health insurance company really pay out $338 or are they fudging it to make me feel better about buying health insurance?

Most, if not all doctors, etc offer cash paying discounts. I have seen them range from 10% to 75%. If is likely that is the price you were quoted - not the actual charge.

Quote from tennis8363 : Most, if not all doctors, etc offer cash paying discounts. I have seen them range from 10% to 75%. If is likely that is the price you were quoted - not the actual charge.

Hm... looks to be the case. I always knew that asking for a cash rate was better when you didn't have insurance, I didn't think it would be better than having insurance. There is common wisdom that says that telling a doctor that you have health insurance is the last thing you want to do. Here's an example why.

http://articles.latimes.com/2012/...s-20120527

I think I'll start doing that.

Quote from travfar : Hm... looks to be the case. I always knew that asking for a cash rate was better when you didn't have insurance, I didn't think it would be better than having insurance. There is common wisdom that says that telling a doctor that you have health insurance is the last thing you want to do. Here's an example why. http://articles.latimes.com/2012/...s-20120527 I think I'll start doing that.

Works in most hospitals as they take all patients, typically. However, many MD offices won't see you without insurance and will try to steer clear of government medical programs as well that only pay $10-12 bucks for an office visit.

the doctor was quoting you the cash discount price. The inflated price they gave the insurance co. was the real price. They have to gouge paying customers a little to account for the difference for their medicare/medicaid patients because the government has an even lower price they pay doctors (lower as in if all their patients paid that low price the dr. would go out of business). Lots of doctors try to limit the amount of medicare/medicaid patients they see because of this. Hospitals do the same thing.

There are 4 prices doctors and hospitals charge. Highest to lowest they have : real price (inflated), then the insurance negotiated discount price, then the cash discount price, then the medicare/medicaid price set by the government and is below the doctor's cost of doing business.

did you have to pay 338 or is that what the insurance co. paid? Why would you tell them you are paying cash if the insurance co. pays? To save them money? Maybe you are on a high deductible insurance plan where you pay the insurance negotiated price up to the deductible before the bigger benefits kick in? In that case you will want to go through insurance because if you have big bills later in the year, you will have to pay up to the deductible again. You will screw yourself out of insurance benefits by paying cash, but you are sort of gambling because you will end up paying less if you have no other medical bills for the rest of the year.

Quote from B9FYwspP8J85 : did you have to pay 338 or is that what the insurance co. paid? Why would you tell them you are paying cash if the insurance co. pays? To save them money? Maybe you are on a high deductible insurance plan where you pay the insurance negotiated price up to the deductible before the bigger benefits kick in? In that case you will want to go through insurance because if you have big bills later in the year, you will have to pay up to the deductible again. You will screw yourself out of insurance benefits by paying cash, but you are sort of gambling because you will end up paying less if you have no other medical bills for the rest of the year.

That's what the insurance company paid. Like I said, it was my yearly freebie. And I am on a high deductible. Nothing else makes sense for me. I only see a doctor about twice a year. That doesn't even put a dent in my yearly deductible.

Now I remember why I don't call up doctors and ask for pricing. They don't give it. I called 9 dermatologists just now to ask them how much an annual skin screening would be. Not one gave me an answer right away. They all gave me the standard "every patient is unique so we have no idea how much it would cost" line. I kept asking. I asked for the price for just a screening with no additional proceedures such as biopsies. Just the initial look. Only two ended up giving me a number and they were both fuzzy. One was under $200. The other was $100-$300. I asked if they could give me an exact price. Both of those said "no". The other 7 refused to give a number or range at all. I think I'll end up using my insurance. The insurance company did tell me that it would be $91 for a skin screening. Which matches exactly what I was billed last year.

Update: I just called number 10 and we have a winner!!!! I asked them straight out and they gave me a straight up answer. $85 flat out. I told them they have my respect. I'm putting a star by their name.

Quote from travfar : Update: I just called number 10 and we have a winner!!!! I asked them straight out and they gave me a straight up answer. $85 flat out. I told them they have my respect. I'm putting a star by their name.

And that (you being the customer, comparison shopping, and competition) is exactly the direction our health care needs to go in. Congratulations for being part of the solution.

nope, you just experieneced f'd up US health system. The funny thing is, doctor would rather take your $115 than that $338

Quote from Brian1 : And that (you being the customer, comparison shopping, and competition) is exactly the direction our health care needs to go in. Congratulations for being part of the solution.

exactly, when people have skin in the game they make better and more frugal decisions.