Sometimes It's Cheaper To Pay Cash Than Use Your Insurance

We all know that health insurance is supposed to lower our hospital and doctor bills to a level below the list price for procedures and services, but that doesn’t mean you’re getting the lowest possible price. In fact, you can sometimes end up getting the best deal on health care if you can afford to pay cash.

The L.A. Times reports on a California woman who noticed that while her insurance brought down the cost of her CT scan from $6,707 to $2,336, she would only have paid $1,054 if she’d just paid the hospital in cash and skipped over the whole insurance thing.

The paper called another medical center for prices and found that a $4,423 CT scan would only cost $250 if paid in cash. Blue Shield insurance quotes a price of $2,400.

“It frustrates people because there’s no correlation between what things cost and what is charged,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions tells the Times. “It changes the game when healthcare’s secrets aren’t so secret.”

Another doctor says that a woman’s $782 blood work would only cost a patient $95, while her insurance charged her $415.

“The last thing the insurance companies want you to know is how inexpensive this stuff really is,” says the doctor.

Alas, many of the hospitals and doctors only offer these cash discounts to patients who don’t have insurance. Which means you would have to not tell the hospital about your insurance.

“If you have insurance, you are under that insurance plan’s negotiated rate with the hospital,” says a rep for the California Hospital Assn.

Additionally, any cash you spend that the insurance company doesn’t know about will thus not count toward your annual out-of-pocket deductible.

The head of finance at the hospital with the $6,707 CT scan says insured patients pay more in order to allow the hospital to provide service to the uninsured.

“We end up being forced to charge a premium to health plans to make the books balance,” he tells the Times. “It’s a backdoor tax on employers and consumers.”

Many hospitals, doctors offer cash discount for medical bills [LA Times]

Thanks to Mike for the tip!