If you’re without insurance, if you’re going to being paying up front with cash for your medical care, then I can show you step-by-step how to successfully haggle for the costs of your healthcare service—and save you 50%, 60%, 70% or more of what you, personally, would normally pay.
Many organizations have a discounted price for cash payment. They love cash up front. It saves them no end of time and effort in dealing with insurance companies.
But considering the value you’re providing them by in paying cash, the amount you’re charged is usually still way too high.
I’m going to teach you how to do better, way better.
The first step is knowledge.
Think about the bills you get from your doctor or health system.
The charges are outrageously, obscenely high.
Think of them as the sticker price for a new car.
You would never pay it.
No one does.
So why do your providers send out bills for those amounts in the first place?
Because if your provider takes Medicare, the law says that they must bill every patient the same amount for each service, though it doesn’t limit how high that amount can be set.
However, the law does not say that your clinician or system has to ACCEPT that amount as payment in full.
Once your provider sets a “top-line price” for a service, an office visit or a procedure, for example, they can negotiate lower charges from insurance companies.
And the insurance companies know if they don’t negotiate with the provider for a discount from that top line price, they’ll be forced to pay full price for those services.
So, that’s why your provider wants to set that charge as high as they can.
And it’s that huge charge that’s the amount on the bill that you get.
It has no relation to reality.
Something is only really worth what someone else is willing to pay.
No one is willing to pay that number.
Certainly not Medicare or Medicaid.
The amount Medicare and Medicaid will pay is set by law.
It’s much, much lower than the asking price.
Medicare and Medicaid determine the amount they’re willing to pay based on complex calculations.
And you paid for them to do those calculations through your tax dollars.
So you might as well use that information.
The process of sky-high asking prices and negotiated discounts creates a tiered system of prices based on who’s paying.
Here’s an example of a service that costs $10,000:
|Who’s paying||How much is actually paid
(also known as an “allowable”)
|You (Full price)||$10,000|
|Private Insurance||$ 6,000|
It’s true. It’s not unusual for Medicaid to pay less than 10% of the “top-line price.”
Next week, I’m going to teach how to negotiate a discount from the “top-line price” to a price much closer to what Medicaid pays.
(This series is adapted from a post written by someone with an anonymous sobriquet. You can find here. The website is buggy, loaded with onerous advertisement and definitely contains content that many people find objectionable—it’s a place that the average healthcare consumer might not want to go. A reader brought the post to my attention and asked me if it would work. I responded that, yes, I already had seen it work, many times in my old practice. I revised the content for better understanding and useability. It’s not obviously copyrighted).