health insurance penalty

[geddcoon]

I have a bitchy, middle-class question. Why do some health care services cost more if one has insurance than if one does not? I.e., there is an advertised price for a service but if you happen to have health insurance, then the price is much higher (on the order of 3x higher). But since I have such a high deductible, the insurance company never

Comments

[mejeep]

In many places, it's the opposite:
the insurance companies cut themselves a discount and the "rack price" is higher for everyone else.

But I see your point: it looks like an accounting trick to get you to pay more out-of-pocket, or for the provider to claim book-losses for insurance companies that refuse to pay the full rate.

[geddcoon]

I know about this case... the negotiated rate. This practice is kind of bullshit but it at least it makes intuitive sense to me.

What I don't understand is the case I mentioned above: The case where having insurance makes the price go up.

[mejeep]

well, it's a case of measures and counter-measures and counter-counter measures

If the insurance companies claim that only HALF the rate is "reasonable and customary", then that forces the providers to DOUBLE their price to insurance companies just to get paid what's, well, reasonable and customary!

[geddcoon]

I think I am talking about something completely different. I'm familiar with the case you are talking about. What I don't understand is what is going on here.

http://geddcoon.livejournal.com/489879.html?thread=3792535#t3792535

It is like this scenario:

You see an ad to get a Big Mac Meal at McD's, the advertised price is $5. They even say "Credit cards accepted." I go to McD's and order one, and I and offer to pay by credit card. They say, "OH, you have a credit card. In that case, it will be $20." I go, "OH SHIT YOU DIDN'T TELL ME THAT THE PRICE WOULD CHANGE. Let me pay cash then." They say, "OH NO, it's too late, I saw that you have a credit card. It doesn't matter whether you pay with cash or credit. it's still $20 for you."

[xzadfor]

I agree with Mejeep. It's high for YOU but once the company has to pay, well... then it's the negotiated rate!

In California, I'm surprised they haven't put in a law to stop that!

[xzadfor]

Oh and one thing I hate to say, that I discovered when I was unemployed. Struggled to have insurance on my own. Used insurance. Now I had to pay of course but they were real bastards with me being unemployed and asking them to hold off (years ago). In the end had I not had insurance and just been unemployed they would write it off!

I'm learning fast it doesn't pay to try to do the right thing in this world.

[mut]

Well, you can invert the argument: perhaps they're charging you the regular rate and generously giving those without insurance a discount. But that gets at a more interesting question: what *is* the regular price?

You know what this is reminding me of? The arbitrary-seeming rules that airlines had (and some still have) about economy fares -- you know, if your trip spans two Saturday nights you get a big reduction, that kind of thing. Those were designed to separate out business customers (who would pay more but didn't really want to) from tourists (who wouldn't pay more). So this may be the same deal: using side-channel information about your ability to pay to set different price points. But it's imperfect information, so it's not very nice for those who have insurance but high deductibles...

[geddcoon]

The "regular price" is the price that they advertise their services at, or at least it should be. That's why I am pissed off.

The place's web site says, "The service costs $X If you have an insurance card, bring it. Services will be provided regardless of ability to pay."

When I went to the place, the receptionist told me that I can't get it for $X, for me it is $4X, and that the service will not be provided. Having insurance raises the price, and frees them from having to provide service regardless of ability to pay. But they don't state that anywhere.

[mut]

Oh, weird! I didn't understand that they had advertised it at that price (and in such clear terms). Yeah, that's pretty wrong and I wouldn't be surprised if it's illegal. Can see why you are annoyed...

[geddcoon]

Some of my coworkers are citizens of other countries in Asia. Whenever they have to have something beyond a routine doctor's visit, they prefer to fly to Asia have it done there, because they say that the care is better and it is free.

Rhetoric from the right about the US having the best health care in the world is greatly overstated.