Paying Cash for Medical , Cheaper than using your Insurance ?

[Andrew Joiner]

I have a 5K deductible health insurance policy. I've had it for 20 years. It's never paid a dime for medical costs. I consider it bankruptcy insurance to cover major medical bills. I learned along time ago to negotiate cash discounts and shop around for most medical visits.

For years I had been getting a far cheaper price on blood tests by calling and saying "I have no insurance may I have get a cash discount" after the bill arrived. The discount was about 20 or 30%. Then 6 months ago on a test ordered by my MD at the same local hospital they said they couldn't give the "Non insured discount" because the old records show I still have insurance. It's 5K deductible and would never pay a dime I told them. No discount they said because it's there OPTION to offer it as a mercy discount for the poor. Now, my MD's billing dept.took that insurance completely off my record. I still have the 5K policy but my MD's billing dept. say's I can just use the insurance if I have a bill over 5K and be way better off.
I have 5k deductible per diagnosis not per year which is a rare old policy that I want to keep. If the pre-existing condition rules allowed me to shop for better/cheaper insurance I would.



This MD's website has some good info-- http://www.kevinmd.com/blog/2012/06/hide-health-insurance-status... (http://bounce.fatwallet.com/redirect/bounce.php?afsrc=1&mid=17613396&eurl=http%3A%2F%2Fwww.kevinmd.com%2Fblog%2F2012%2F 06%2Fhide-health-insurance-status-pay-cash.html)

He say's:

"First, to get the discounted prices, patients would have to withhold insurance information from hospitals. If you tell them you have insurance, they will be bound to charge you the insurance company’s negotiated rate. Those are the up to 89% higher fees documented in the previous paragraph.

However, if you don’t tell them your insurance and pay cash instead, the cash payments don’t apply to your annual out-of-pocket spending limits."



















Hope fully we can share our experiences here and save some money. This may not work for your situation.

[David Weaver]

That's not the case here, unfortunately. Not for dental and not for insurance. The way the hospitals bill here, the pre-cash price is generally 2-3 times what insurance ends up paying as a negotiated rate, sometimes less.

What I'd really like to see is some normalcy in billing so that I could choose whether or not I wanted to have cash to pay for routine stuff or have insurance to pay for it. If I didn't have insurance, the hospitals costs could still be negotiated (same as the dentist). I haven't asked at the hospital, but the dentist offers a 10-20% discount for immediate cash payment. Insurance's negotiated rate is about 70% off his charges.

That doctor's policy will no longer be a legal policy for an individual to have next year, he'll pay an excise tax based on his income level and it will increase over the next few years. He won't have to get an ultra rich policy, but he's going to be forced to choose between excise taxes and a policy that covers about 60% of his expenses and provides certain covered services rather than just coverage per diagnosis.

[David G Baker]

On a cash up front case medical providers would get paid right away instead of 6 months later like Medicare and some insurance companies do. I am amazed at how much time has gone by before my providers are paid. Sometimes the providers don't bill for a month or so as well.

[Mike Henderson]

I know from experience that doctors will give a significant discount for a cash payment. Of course, their "standard" rates are way beyond what they would get from insurance so it's pretty easy for them to give a discount and still get as much, or more, than they would get from an insurance payment. But you have to be reliable. If you don't pay, or take a long time to pay, don't expect a discount the next time you go in.

Works for surgery, too, but you may have to pay in advance.

Medicine is negotiable, just like everything else.

Mike

[David Weaver]

On a cash up front case medical providers would get paid right away instead of 6 months later like Medicare and some insurance companies do. I am amazed at how much time has gone by before my providers are paid. Sometimes the providers don't bill for a month or so as well.

I'm not on medicare, but it still often takes my dermatologists bills about 4 months to get to me, and they have no due date. I don't generally go to the doctor otherwise, unless I actually need something. It takes the derms bills so long to come that sometimes I can't remember why I was there.

[Greg Peterson]

Insurance companies negotiate a price for goods and services based on the number of members they have. Hospitals negotiate cash prices with customers that do not have an insurance policy.

The trick seems to be in getting the service provider to settle for a lower, cash payment.

http://articles.latimes.com/2012/may/27/business/la-fi-medical-prices-20120527

[Andrew Joiner]

Yes, my point with this thread is to encourage asking about prices. It can save you money to ask about paying cash(credit card usually works). Like the LA times article says:

"The lowest price is usually available only if patients don't use their health insurance."

[phil harold]

I have heard of people waiting not and not paying until it is headed to collection and then pay 30-40% of the bill in a lump sum
these were major procedures and originally covered under insurance but the 20% that you have to pay

[Frank Drew]

I have heard of people waiting not and not paying until it is headed to collection and then pay 30-40% of the bill in a lump sum

Who here would like to be treated this way by their customers? I know it would have quickly put me out of business.

[Andrew Joiner]

I agree with both Phil and Frank a little.

Most businesses have a listed or bid price for an item or service. Not so with a most medical things. You have to ask and you have to ask in detail.
I think Phil's suggestion may get you a cheaper price if you don't care about your credit rating.
A better, more ethical idea is to ask before hand what would the cash price be? Then as a month or 2 goes by ask again for a lump sum discount to pay it all before anyone has to worry about the collection process. After 2 months the lump sum discount may be more than original cash discount. The medical office billing you doesn't want the hassle (usually a loss) to send it to collections.

[ray hampton]

I got a question that may be difficult to answer, if the patients insurance company of a doctor own the doctor a huge amount of money and the doctor die without notice , will the insurance still pay the patients bills

[Rod Sheridan]

The non wood working stuff I learn on this forum is astounding................Regards, Rod.

[Greg Portland]

Some options:

1) For routine items (X-rays, blood work, etc.) determine the location in your area that is cheapest. There are huge differences in cost between a hospital and a local clinic.
2) Definitely haggle on the price of the service.
3) Either pay cash up front (for common things) and get the cash discount -or- hire a health care advocate service. They specialize in understanding all of the billing codes and haggling down your bill.
4) Determine how much Medicare would be billed for the procedure (they have very low rates). That should be your (high) starting point when haggling on cost. You should be able to talk them down from that if you're paying cash.
5) Open a HSA and put pre-tax money into it to pay for medical expenses. If you draw from the fund for non health care reasons you'll be paying the tax on the money. HSAs roll over year-to-year so unused money isn't lost.
6) Keep close track of your bills and out of pocket maximums. The insurance co will happily charge you past your out of pocket max if you're not paying attention.

[Andrew Joiner]

Some options:


4) Determine how much Medicare would be billed for the procedure (they have very low rates). That should be your (high) starting point when haggling on cost. You should be able to talk them down from that if you're paying cash.

All great tips Greg. Have you had any luck with using Medicare prices? Where did you find the list of what Medicare covers?

[Greg Portland]

All great tips Greg. Have you had any luck with using Medicare prices? Where did you find the list of what Medicare covers?
Start here --> http://www.cms.gov/apps/physician-fee-schedule/

Your doctor's admin can provide the billing codes that they plan on using. Smaller offices are better for haggling... the cash isn't always reported to the IRS. I've even had friends exchange goods/services for visits.

[Frank Drew]

Would we be talking this way if the subject was how to pay for woodworking services? "My wife and I want some custom-made library built-ins, preferably out of a classy hardwood like cherry or mahogany; what's the best way to beat the cabinet maker down on the price?" Or, "I bought a very nice turned salad bowl for my daughter's wedding gift. The turner's lives near me and let me pay on time; I still owe him $100... what if I tell him I'm only willing to pay is $50? What's he gonna do, sue me for the remaining $50?"

I've got no sympathy for most health insurance companies, an maybe I'll throw most hospitals in there, too, but many doctors in private practice have a hard enough time making it. I know that transparency is an issue, and it would help to know upfront how much any individual procedure will cost, but if that's known, and if you agree to the price, isn't the right thing to do to pay in full if you can?

[Andrew Joiner]

Good point Frank.
If it's a turner or a Doctor that let me pay on time and I still owe him $100 I'd never tell him I'm only willing to pay $50. I may ask"are you willing to accept $50". If the answer is no I'll accept it or suggest $75. All things are open to negotiation. For me the best negotiation skills are through honest communication. Whether I'm the buyer or seller.

Over the years I've been a seller of goods and services. While I was never happy to be beaten down in price, many times I was happy to just make a little money and move on.

[David Weaver]

Would we be talking this way if the subject was how to pay for woodworking services? "My wife and I want some custom-made library built-ins, preferably out of a classy hardwood like cherry or mahogany; what's the best way to beat the cabinet maker down on the price?" Or, "I bought a very nice turned salad bowl for my daughter's wedding gift. The turner's lives near me and let me pay on time; I still owe him $100... what if I tell him I'm only willing to pay is $50? What's he gonna do, sue me for the remaining $50?"

I've got no sympathy for most health insurance companies, an maybe I'll throw most hospitals in there, too, but many doctors in private practice have a hard enough time making it. I know that transparency is an issue, and it would help to know upfront how much any individual procedure will cost, but if that's known, and if you agree to the price, isn't the right thing to do to pay in full if you can?

You've got it the wrong way around. Most health insurers are doing OK, most doctors are doing very well with the exception of a few who are not fit to run businesses and aren't smart enough to realize they should be drawing a salary from those who are. Most hospitals as organizations are doing very poorly and their non-doctor employees are suffering as a result.

If anything, they are tied up in low margin high capital games because patients aren't willing to go into a hospital that look like it was redone 20 years ago.

Doctors influence where the patients go, they do better than the rest of the health system in general, and not just in absolute dollars, but in priority in terms of who really gets to call the shots. You don't cross the doctors if you're running any kind of health system, because your patient flow will dry up. Health insurers generally spend greater than 85% of the premiums they collect on paying claims and administering health care. Some much greater than that, and some less, but it will soon be bad for business to have loss ratios less than 85%.

(that said, don't confuse my comments with "doctors shouldn't be paid as well as they are" or anything like that. Just making the point that the sob stories you hear on the news about some doctors not making enough to pay back their loans are nowhere close to being the norm or average doctor, it's more a matter of trying to make a news story out of the bottom 5%. Now, the orderlies, the techs, the assistants (nursing assistants, PT assistants, and the rank and file workers at the insurance companies, that's another story. The money flies around all around them, and very little of it lands in their laps).

[Jeremy Hamaker]

Keep in mind that all the particulars of this discussion drastically change on January 1 2014 when the insurance coverage requirements of Obamacare kick in, as well as the penalty tax provisions for those who do not have insurance that meets Obamacare requirements (not counting specific waivered exceptions...).

[Andrew Joiner]

Yes, that will be interesting Jeremy. It changes the insurance requirements for many people. My gut feeling is cash will still be king. Especially if medical providers have MORE paper work to get paid by non- cash paying clients.

[David Weaver]

There will still be uninsured individuals. The excise taxes aren't that punitive, esp. at first, and even later on, if you want to bear the risk and even assuming you're not eligible for subsidy credits to go to the exchanges, it grades from $95 (for the year) in 2014 to $695 in 2016.

I'd imagine there will still be a lot of people who are paying cash because it's still much cheaper to risk being uninsured than it is to be insured.

[Rod Sheridan]

Hi, I have a really dumb question, why would a provider take cash at a discount as opposed to being paid by cheque?

I doubt a hospital or doctor could do work "under the table" so what would be the benefit to them?

regards, Rod.

[ray hampton]

Yes, that will be interesting Jeremy. It changes the insurance requirements for many people. My gut feeling is cash will still be king. Especially if medical providers have MORE paper work to get paid by non- cash paying clients.

will we need a good lawyer to help the average citizen to advise us on what insurance to choose

[David Weaver]

will we need a good lawyer to help the average citizen to advise us on what insurance to choose

I don't think you'll get much help from a lawyer. If the bill doesn't make provisions advisors on the government's payroll, there will be businesses popping up that will make a recommendation for a fee.

[David Weaver]

Hi, I have a really dumb question, why would a provider take cash at a discount as opposed to being paid by cheque?

I doubt a hospital or doctor could do work "under the table" so what would be the benefit to them?

regards, Rod.

If they don't know you have insurance, and you pay them cash, they know they'll get paid. I'd imagine that the uncollectable accounts that doctors and med groups have cause them a lot of headaches and cost money to deal with.

[Rod Sheridan]

Well David, that's certainly a possibility, I have to admit I hadn't considered uncollected receivables..........Thanks, Rod.

[David Weaver]

About 2 years ago, I went to the ER with metal in my eye. As I was checking out, I had to pay $50. The lady seemed very surprised that I was paying it while I was there. The guy next to me in line looked like a regular, he opened his wallet with ID or something and she asked him if he wanted to pay....he looked, and then he said, "no".

I would assume based on the crew that was in there, that quite a lot of people keep their cash in their pockets because they don't intend to pay (late at night, I was the only "regular" person, the rest were people either high on drugs or with obvious mental illness, to the point that the triage nurse didn't believe me when I said I had metal in my eye. I had to tell her three times that you could see it with your naked eye if you just looked, and she said "oh ..you do! I can actually see it!").

[Andrew Joiner]

Hi, I have a really dumb question, why would a provider take cash at a discount as opposed to being paid by cheque?

I doubt a hospital or doctor could do work "under the table" so what would be the benefit to them?

regards, Rod.

Most of the time a cash discount for medical means they give you a lower price for paying at the time of service. Some do it if paid on the first billing. You have to ask. The actual payment can be with a credit card or check. I've never actually used cash. My dentist is the only one who gives a discount for a personal check or actual cash and not a credit card.
I assume it's more valuable to the medical office to be payed sooner. Sending it to an insurance company takes lots of time and clerical work. My Dr. friend says it takes at least 30% more office work to get paid by insurance than by cash or card, thus a 30% discount makes sense.

[Frank Drew]

You've got it the wrong way around. Most health insurers are doing OK, most doctors are doing very well with the exception of a few who are not fit to run businesses and aren't smart enough to realize they should be drawing a salary from those who are. Most hospitals as organizations are doing very poorly and their non-doctor employees are suffering as a result.

If anything, they are tied up in low margin high capital games because patients aren't willing to go into a hospital that look like it was redone 20 years ago.

Doctors influence where the patients go, they do better than the rest of the health system in general, and not just in absolute dollars, but in priority in terms of who really gets to call the shots. You don't cross the doctors if you're running any kind of health system, because your patient flow will dry up. Health insurers generally spend greater than 85% of the premiums they collect on paying claims and administering health care. Some much greater than that, and some less, but it will soon be bad for business to have loss ratios less than 85%.

(that said, don't confuse my comments with "doctors shouldn't be paid as well as they are" or anything like that. Just making the point that the sob stories you hear on the news about some doctors not making enough to pay back their loans are nowhere close to being the norm or average doctor, it's more a matter of trying to make a news story out of the bottom 5%. Now, the orderlies, the techs, the assistants (nursing assistants, PT assistants, and the rank and file workers at the insurance companies, that's another story. The money flies around all around them, and very little of it lands in their laps).

David,

I think you exaggerate the influence, and probably the earnings, of many, if not most, doctors. They need admitting privileges as much as hospitals need patients; there are certain specialties that are considered cash cows for hospitals, such as orthopedics or thoracic surgery, but that has a lot to do with the earnings from the OR, not necessarily from inpatient admissions. Doctors in such fields as emergency medicine, anaesthesia, radiology,etc., usually belong to practices which contract their services to hospitals, and they have little influence on hospitals and have no guarantee that their contract with any particular hospital will be renewed, and if those contracts are, in fact, terminated, that leaves those practices scrambling to place their docs.

You're absolutely right, though, on how little money trickles down to the cannon fodder on the front lines (those of us wiping the butts.) I think most people would be shocked at how little some of us are paid for what we do.