- You wouldn’t buy groceries or gas without knowing the price, so why are healthcare costs so secret? And why are there so many bills from so many places?
- Simply asking about the self-pay rate and comparing that rate to your insurance negotiated rate could possibly save you money, and certainly make for a less stressful overall experience.
Melissa, a young mom requiring knee surgery, found out why asking about the self-pay rate for healthcare services can create a much less stressful patient experience, and could actually even save you money.
Learn more about self-pay pricing and pricing transparency with Solv ClearPrice.
I grew up in a small town and I’m one of five kids. Money was always tight growing up. Now, with my own family, I’ve remained more cost conscious. My husband and I do well financially and have good insurance — a high deductible health plan — that serves our young, growing family well.
Last year, 2021, was a busy year for us. We gave birth to our son in April. He and his sister now rule the roost, of course. Our insurance was great with it. Of the $40,000 total billed, we owed about $6,000, which seems to be about the average out of pocket for delivering a baby. So this was expected, and we were prepared. And even with our high deductible health plan, bill easily satisfied our annual deductible.
What wasn’t expected, however, was me needing knee surgery in the fall. It wasn’t really an elective surgery and I didn’t really think too much about the costs, particularly since I already satisfied my deductible. I figured my portion of the cost wouldn’t be significant.
Turns out I was wrong. I may have hit my annual deductible, but not my out of pocket maximum of $7,000. The total cost of the knee surgery was $10,000, or at least that is what the hospital billed my insurance. I was only responsible for my 20% co-insurance, but that still added up to just more than $1,000.
The most frustrating thing was all the different medical bills that showed up. We had the hospital bill, the surgeon and the anesthesiologist - each whom billed separately, a bill for medical equipment (my crutches)… all total, there were 6 different bills. I really felt the expression, “death by a thousand cuts.”
These high costs — and more so the surprise bills — have really caused me to re-think how I approach my family’s healthcare.
I don’t need that stress. Already this year, after our insurance deductible reset for 2022, my husband needed to go to the urgent care. Knowing that we don’t have anything major like a pregnancy planned to fulfill our high deductible this year, we just opted to self-pay for the visit rather than use our insurance at all.
For me, the value is having clarity and certainty around what I’m paying. I really didn’t want the stress of unexpected medical bills showing up a month or two later, potentially costing us even more.
Hopefully this year doesn’t bring us any more unexpected surgeries. But if it does, I’ll certainly be asking about the costs in advance, as well as self-pay options available to us.
Five tips for choosing to self-pay for healthcare
Melissa's not alone in her frustration and confusion around our healthcare system, of course. When considering self-pay, there is a lot to keep track of. Here's a quick break down the self-pay process one step at a time.
- Assess the situation. What kind of medical care do you need? Is this a routine or big-ticket item? What month of the year is it, and how close are you to hitting your deductible?
- Do your research and shop around to compare prices. First, you should try to figure out how much the procedure costs in-network. You can use an insurer’s online tools or call the company (keeping in mind that final costs fluctuate, and may not exactly match the quote). Costs often vary widely by provider and region of the country, so this step is extra important.
- Directly ask providers what their cash prices are. Some providers may not make it easy to find estimated prices, so be persistent and remember that you’re entitled to this information: as of 2021, hospitals are required to provide patients with the cash price information during a visit even if the patient has insurance.
- If the insurer’s cost is higher, ask providers for a cash discount. You may be surprised at how many providers will do this when they ask. That’s key: patients often have to pose the question, according to KTVB. However, some providers committed to transparency make this information easily accessible upfront, or advertise discounts widely. Other hospitals feature price estimate calculators on their websites.
- If you decide to go with cash prices out of network, compare local competitors. Once patients aren’t limited to providers in-network, they can choose between a wider range of doctors.
Frequently asked questions
Is paying with health insurance always cheaper?
Not always. Depending on your insurance plan, your provider, and what service you require, the self-pay rate may actually be less expensive than the insurance negotiated rate. And if you have a high deductible health plan, it may make sense more often to go the self-pay route, particularly later in your plan year.
Why is the self-pay rate sometimes less expensive?
Health insurance companies don't have much incentive to negotiate down the rates they set with providers. They eventually pass the costs onto patients (their policyholders) and make a profit off them anyway. Additionally, providers generally spend a lot of time and money working through insurance companies and their layers of bureaucracy. It's cheaper for them to just collect payment directly from the patient at the time of service, a savings they sometimes apply as a significant discount for those willing to self-pay.
When should I pay the self-pay rate for healthcare services?
The short answer: it depends. What you really should do is ask about the cost of care, both when applying your health insurance (if you have it) and if electing to self-pay. Gather the information prior to receiving care (whenever possible) and make an educated decision for yourself.
What are self-pay rates?
Self-pay prices (also commonly known as “cash” pay prices) refer to the prices that you would pay for services if you didn’t have insurance or if you didn’t want your insurance to be billed.