You’ve probably suspected that it’s hard to get comparative prices for health care because someone’s over charging. Well, now you have evidence to support that suspicion. A huge federal database of health-care costs just went public. Here’s one example of the findings: treatment for chronic obstructive pulmonary disease can cost $99,690. The secret is that you can save $92,646 less than 30 miles away where the bill is $7,044. Here are five ways you can get fair prices.
Change “Buyer Beware” to “Buyer Be Smart”
Of course, to get the most experienced surgeon, you might need to spend more, but you may not have to pay more than $90,000 extra for decent health care. The federal Centers for Medicare and Medicaid Services have opened up data on the vast majority of hospital charges for 100 common services at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html.
The 2011 data reveals some 163,065 charges from 3,337 hospitals in 306 metro areas. And, it’s transparency like this that empowers you. Would it be worth going to a hospital 30 miles away to save over $90,000? I think so.
Health Insurance Is Not a Free Ride
Ok, it’s true that you have to pay the same deductible and co-pays regardless of how big your medical bills are. But, a health insurance company is going to “externalize” inflated health care prices by charging all its members higher premiums to cover these excess charges.
Health care spending has been growing faster than wages for 30 years, primarily because prices are hidden, and no one knows what it all really costs. The more we can encourage price transparency among healthcare providers, the better our healthcare system will work.
Health Insurance Takes the Target off Your Back
What if you’re healthy and you don’t want to waste money on insurance you may not need? If you’re good at predicting the future, maybe that’ll work. If not, you’ll be one of the patients with the target on your back. Those without health insurance are the people who get the most inflated prices. Insurance companies are negotiating for lower prices, but the uninsured have no one on their side.
If you ask a hospital for its price list, you will probably get a blank stare in response. They do have a price list, but almost no one pays the retail price. That is because the indigent don’t pay at all, and the insurance companies pay a pre-negotiated discount. As Harvard Business School health-care expert Robert Huckman says, it’s almost always people without health insurance that pay the highest price. So you don’t want to end up with a hospital bill, without insurance.
Cut the Cost of Health Care with Tax Deductions
I welcome price transparency and it may well be the tipping point in fighting unsustainable health-care pricing. Having worked with health insurance for years, I know of some other ways you can get a fair deal on health care. Have you heard of health reimbursement arrangements? I encourage you to look into them for the tax savings. Self-employed and other business owners can get more information at www.HSAforAmerica.com/HRA.htm.
Talk to Me about a Subsidy
I’m encouraging most of our clients who have older policies to keep them because I expect premiums to remain lowest on policies that pre-date health care reform. If your income is less than 400% of the federal poverty level, you will qualify for discounts on your coverage – so it may be worth applying for a new plan. If you do need to change plans now, I recommend getting a policy this year so that you won’t have to change to one of the more expensive “metal” plans that will be mandated starting in 2014.
If you do qualify for tax credits we can help you get the full amount and it will be applied to your premiums as of January 1. Starting October 1 we can also get anyone signed up for coverage, regardless of health problems.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.