US cities pay too much for buses

I have a $6500 deductible. I definitely care what things cost because my insurance almost never actually helps pay for anything unless I have an unbelievably bad year.

The problem is that literally nobody can tell me how much anything is going to cost until I get the bill in a month. Not even because they don't want to tell me. Nobody at the desk even knows what my price is going to be because it's all numberwang.

You are the best customer, thinking you’re a smart customer!

Not defending insurance but theoretically you do also get a better rate than the uninsured rate just by having it go through the health insurance.

I say “theoretically” because I’ve also heard they’re often willing to cut some pretty good deals if you don’t have insurance and pay cash. And I mean “good” relative to the initially billed amount, not “good” relative to what it should actually cost.

Yeah, I suspect this is very country and region specific.

In my country I don't have health insurance. I've noticed that medical providers charge me less on discovering that. Party (I suspect) because I'll pay immediately so there's no financial cost (ie cost of delayed cash flow) and much lower admin cost (ie they don't need to deal with insurers.)

In some places I've seen signs advertising 30% discount if you "pay now, claim back from your insurance yourself". This informs my hypothesis that providers see the insurance system as a major overhead.

No, it’s the opposite actually. There are a couple of reasons why:

1. You have a deductible. Insurance is incentivized to make things more expensive so you don’t use it. With a $10,000 deductible, are you going to pay $500 for a service outside insurance or $2,000 with insurance?

2. Hospitals really have no idea what anything costs. Nobody does. There is a maze if agreements between providers, contractors, hospitals and insurance companies. If you have insurance, hospitals are more likely to throw out a higher random number;

3. There is more process and paperwork for the hospital with insurance; and

4. You are more likely to be able to negotiate down a bill without insurance.

You care about small costs but not the large ones. Even with a relatively large deductible it’s irrelevant to you if your hospital charges $50k or $90k for a surgery.

$6500 is nothing once surgery, radiation, and/or anesthesiology enters the picture.

I was told it's also illegal in the US for a hospital to bill you as uninsured if you have insurance.

You won't get in trouble but the hospital will, but if they ask if you have insurance and you say no when you do, that could change the situation.

Again, I'm not a lawyer but this was they told me once a few years ago because I got charged a ridiculous amount for something and wanted to see if it would be cheaper if I just paid without insurance considering my deductible was many thousands of dollars.

This is correct. I have been in situations where I am told the cash price and then "I cant tell you how much it will be with your insurance". Come to find out cash was A LOT cheaper. They cant undo it.

I have also been in a situation where insurance price was cheaper.

Thereinlies the problem..without know the price people CANNOT make an informed decision. There is no freemarket. This done on purpose and only happens in America.

The funny thing is there are only a few insurance companies (BCBS, Aetna, United, …) and types of plans (PPO, HMO, EPO).

I could be misinformed but I feel like there are only a few possible combinations of one’s actual coverage.

A simple spreadsheet could easily track everything. The providers even know how much they get from each company, so they know the allowed in-network cost for a patient.

It’s just utter laziness and stupidity.

I always view the initial billed amount as the MSRP for a really shady industry.

While it’s often 2x-3x the allowed amount, I’ve even seen it closer to 20x-40x one — an amount for a simple outpatient procedure the would lead to financial ruin if it had to be paid in full.

I really don’t understand why there is any math in the initial amounts.

Why don’t they just bill $1M for every single item and then see what they get?

Absolutely, there is room for price shopping for a subset of medical treatments. https://surgerycenterok.com is a well-known cash-pay surgery center. If you look through the procedure list, you can see the types of things that lend themselves to this model: lots of orthopedic surgeries, things that are fixes for chronic issues that don't really need to be dealt with on any specific timeframe.

But when you get into the really big, serious, time-sensitive things. Cancer treatment, heart disease, anything that starts with an ER visit... you don't really have an ability or time to "shop around". The demand is inelastic.

Every time I’ve gotten a large bill that hit my deductible, going back to the provider and asking to pay cash without insurance has resulted in a lower bill.

Different plans from the same company, even of the same type, don't always cover the same things at the same rates. This is especially true of self-insured plans for large employers - there's certain mandatory things they legally have to cover, but anything beyond that is all up to the individual employers' discretion (since they're paying all the claims directly, as opposed to paying a monthly per-participant fee).

My understanding is that this is only really true for straightforward things like, say, a therapist. If they only have a couple of codes that they bill and they accept a limited number of insurance providers, then they can probably tell you what you'll pay (although I believe there are still a lot of edge cases).

However, if it's something like a surgery at a major health system, then it's way more complicated. The health system can't be as selective about what insurance they take, so they're dealing with medicare, medicaid, plans sold on the individual/small business market, and employer-sponsored plans. So way more than a few providers and a few types of plans. I checked the stats for my state and just the individual/small business market is 12 providers and 250+ plans. Medicare Advantage is at least 14 providers. A major hospital system probably accepts thousands, if not tens of thousands of different types of plans. Then you have to consider that the anesthesiologist, the surgeon, and the facility are all separate providers who may not all take the same insurance.