Why Your Health Insurer Doesn’t Care About Your Big Bills

Patients believe their insurers are fighting on their behalf for the best prices with hospitals, but saving patients money is not insurers top priority — their own profit is. A perverse incentive of the Affordable Care Act say insurers can only keep 15%-20% of premiums as profit, so higher medical bills equal higher profits.

Thus “discounted member rates” insurance companies negotiate with hospitals tend to be 3X Medicare rates for the same procedure. Even these prices, which employers and employees are legally obligated to pay, vary markedly in the same city. Medxoom technology protects employers and their employees by allowing pre-visit comparison shopping for price and quality based on their plans historical claims data.

From ProPublica & NPR:

“Health care costs repeatedly top the list of consumers’ financial concerns. Experts frequently blame this on the high prices charged by doctors and hospitals. But less scrutinized is the role insurance companies — the middlemen between patients and those providers — play in boosting our health care tab. Widely perceived as fierce guardians of health care dollars, insurers, in many cases, aren’t. In fact, they often agree to pay high prices, then, one way or another, pass those high prices on to patients — all while raking in healthy profits.”

“Patients fund the entire health care industry through taxes, insurance premiums and cash payments. Even the portion paid by employers comes out of an employee’s compensation. Yet when the health care industry refers to ‘payers,’ it means insurance companies or government programs like Medicare.”

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