The price of healthcare depends on many things, including how you pay. Paying the cash rate for healthcare can sometimes be a smart move, even with insurance.
There is a move toward price transparency in healthcare, backed by a federal rule that goes into effect in 2021requiring hospitals to post their fees online in an easy-to-understand format for the public. The fees listed will include both those negotiated with health insurers and the cash rate for healthcare — the amount they are willing to take for an out-of-pocket cash payment.
If you don’t have health insurance, or if you are between coverage due to a job change, paying cash will be the only option when you need a test or procedure you shouldn’t put off.
There are other reasons, however, that paying the cash rate for healthcare, up-front, for medical treatment may be best, in certain cases, even though you have healthcare coverage.
Why is the cash rate for healthcare sometimes best?
For many hospitals and healthcare providers, the cash rate for healthcare is remarkably lower than the insured price. A report in the Wall Street Journal (WSJ) noted more hospitals, imaging centers, and outpatient surgery centers are offering deep discounts on cash payment for if you don’t have or use insurance.
If you have a high-deductible insurance policy, which doesn’t kick in to cover some of your medical costs until you’ve paid thousands of dollars on healthcare, the cash rate for healthcare can be a good option for certain tests or therapies and potentially save you a substantial amount of money.
For example, the WSJ pointed to the case of a retired lawyer who learned the cash rate for a knee x-ray was $70. However, if she opted to use her insurance, paying the deductible, the cost was $600.
Another case in point: The Los Angeles Times explained how an Orange County woman was charged $1,758 by a hospital for two ultrasounds. Although her insurance paid $500 of her bill, she had not met her deductible for the year and owed the remaining $1,239. Later, when she asked about the medical center’s cash rate fee, she learned the two ultrasounds would have only cost her about $500 if she had not used her insurance for the imaging tests.
Of course, these examples of the cash rate being best for some people doesn’t mean it is wise for all people with high deductibles. Your situation, your healthcare policy, and what it covers are key to how you should pay for medical care.
Bottom line: How to find the answer to “What is a cash rate for healthcare?”
It’s not always easy to find the cash rate for healthcare from all hospitals and providers, although this should change substantially when the federal rule requiring more price transparency goes into effect in 2021.
For now, your best strategy is to ask directly what a health care facility’s fee for a test or therapy is, if you file a claim with your insurance company, and how much you’ll be charged out-of-pocket for the cash rate of the same healthcare service.
However, in some cases, hospitals and other providers may not want to readily disclose the cash rate information. That’s because they may have a contract with your insurance provider that contains a clause making undercutting the insurer’s negotiated price with a hospital or doctor a contract violation, according to research by Consumer Reports.
If you do not get a clear answer about cash payments, check out other healthcare providers for their cash rate price fees. Remember, if you decide paying out-of-pocket is right for you, you’ll need to have the cash rate clearly established because you’ll likely be required to pay ahead of time for your medical care.
February 14, 2020