> if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for...

Is there any reason why this kind of windfall shouldn't be illegal? I realize it isn't, but is sure seems like it should be.

I was stuck with a charge from a doctor for 7x the price my insurance would have paid. My pre-ACA insurance refused to cover the procedure and I ended up on the hook for the inflated price. The doctor wouldn't negotiate and demanded the full fee. Neither the doctor, nor I, knew this would happen until the procedure was already done.

It feels like an agreement, to me, when the practice takes on a patient knowing who their insurer is. I feel like the reimbursement rate that insurer has negotiated, regardless of whether the insurer ultimately covers any procedures, should act as a cap for the fees charged to the patient. It feels a lot like negotiating a contract, except that one party gets to unilaterally change the amount of consideration. How does that fly?

Insurance has the worst moral hazard: the winning strategy is to sell a product that pretends to cover your customers but actually doesn't. Your customers give you money for nothing and they will only realize it once in a blue moon. You can probably buy off the few who are capable of causing actual blowback, and if that doesn't work just rebrand.

Until everyone becomes a contract lawyer capable of devoting weeks to insurance shopping every 6 months, the only good insurance market is a heavily regulated one, even though heavy regulation comes with its own gigantic bag of worms.

Payouts and premiums aren't where the money is in insurance. It's in the return on investments the insurer makes with the money they hold in trust. From an insurer's point of view, the best market isn't one with no payouts, but one where there is a highly predictable amount of payouts, because the better they can predict how much they need to payout, the more aggressive they can be with their investments.

Yeah, there's a decent amount of regulation around payouts to protect the consumer, but it pales in comparison to the regulations around making sure that the insurer has enough liquid assets on hand, that the total valuation of their assets (ie investments) remains large enough, and that they're charging a minimum amount of premium for the risk that they're taking on.

Yes, in a well-regulated insurance market the winning business model isn't deceit. That's the point of the regulations.

Deceit can take many forms, and I'd argue that undercapitalization is actually one of them. "There's a trap clause on page 23 of the telephone book contract" is only the simplest strategy an insurance company can use to lemon-drop. "We ask our customers to do an impossible information wrangling task and only review the paperwork if they get cancer, so that we have an excuse to drop them" is a slightly more evolved form. Loading up sacrificial business vehicles with risk and using bankruptcy to discharge obligations is the most advanced form of deceit-based insurance business models, because it provides plausible deniability. "We just tried to compete a bit too hard!" they can claim, even if they knew in their hearts exactly what they were doing: the age old practice of selling insurance that you had no intent of making good on.

Fortunately, we have a long record of historical evil tricks to draw on when crafting legislation, because I absolutely stand by my claim that the natural incentives (the ones that happen without careful legislation) in the insurance industry are overwhelmingly bleak, both on an absolute scale and relative to other industries.

I'm not saying it's not because of regulations. I'm saying it's not just the regulations on payouts and the regulations on payouts probably aren't even the most important, because all the regulation in the world around ensuring the insurer can't skip out on payouts will do nothing for "Oops we invested badly and have literally no money with which to pay your completely valid claim".

The payouts regulations are still good and necessary because that's way better than requiring people to find out the hard way through shitty claims processes and denials and word-of-mouth reputation, but they're in no way sufficient.

I'm not sure we disagree. We just allocate the benefit of the doubt differently.

> "Oops we invested badly and have literally no money with which to pay your completely valid claim".

It's 100% possible for this to be a genuine mistake. I'm sure that it happened as a genuine mistake more than once! However, it is also possible to do this on purpose: load up a business vehicle with increasing amounts of risk and extract as much of the premiums as one possibly can before it explodes. If this is done intentionally, it is exactly the same hustle as selling policies that one doesn't intend to make good on, it just uses a different mechanism to shirk the obligation.

Every company that does it on purpose will say that it happened by mistake, of course, and just as I am certain that it has happened multiple times as a genuine mistake, I am certain that it has happened multiple times on purpose.

Undercapitalization is the evolved form of the "sell a trash policy" hustle because it provides almost perfect plausible deniability. It makes sense that the greatest legislative effort would be spent heading it off.

> From an insurer's point of view, the best market isn't one with no payouts, but one where there is a highly predictable amount of payouts, because the better they can predict how much they need to payout, the more aggressive they can be with their investments.

Isn't the latter a strict superset of the former? No payouts is an easily predictable number. And for nonzero amount of payouts, the less those payouts sum to, the more money remains for continuous investing.

No, they're not a superset. You can have events with a very low probability and very little variance, events with very low probability and very high probability, higher probability with low variance, and high probability with very high variance.

Here's some random numbers,say for a hypothetical 100,000 hypothetical year long policies low probability, low variance: E(total claims) := 20, V(total claims) := 1 low probability, high variance: E(total claims) := 20, V(total claims) := 20 higher probability, low variance: E(total claims) := 20,000, V(total claims) := 10 higer probability, high variance: E(total claims):= 20,000, V(total claims): 10,000

Premiums don't usually make their way into investing for a bit. They're used to cover claims and then business overheads and then even dividends first. First they go to claims, because there's usually regulations to prevent price gouging that require insurers to refund premium if the ratio of aggregate premium : aggregate claims gets too high (the regulation is on a state by state basis in the US). Then any remainder goes to any other outlay first, so that the invested money can be/stay invested into longer term investments. Only if those outlays can be completely covered by the premium (and i'm skipping over a few things like regulations regarding various levels of liquidity for different risk levels and other stuff) then yeah it can make its way over to the actual investment fund. But in general the business model for insurers is that underwriting profit, limited as it is by regulations, is primarily used for actually running day to day operations and isn't a reliable source for being turned over to the investing side. The investing side is primarily using the initial capitalization of the insurer and the returns from earlier investments.

One way of looking at insurance is that the insured is actually buying an option against the insured's capitalization with very limited exercise clauses, but the the insurer pays out exercised options with the money from other purchased options contracts.

> It's in the return on investments the insurer makes with the money they hold in trust

...sourced from the premiums. When they pull in more premiums, they have more money to invest.

No, it's sourced from the initial capitalization of the firm and then realized returns that are reinvested. You can't offer insurance until you're capitalized enough to handle claims on the same day the policy takes effect.

Ideally the premiums will cover payouts and day-to-day business expenses, so the invested money can just keep being reinvested, hopefully into longer term and more aggressive investments. The premiums and payouts get rolled into underwriting profit/income. And that can eventually get rolled into new investments.

Here, look at state farm for 2019[1].

Their underwriting gain was $777 million on $65.2 billion in total premium. Their investment income was $5 billion with a net worth of over $100 billion, which is more than 6 times larger their underwriting premiums.

Their profit ratio for underwriting is like 1.2% because they're not trying to maximize that profit. A large reason they're not trying to maximize it is that for admitted policies, there's usually an upper limit to how much aggregate premium can go to anything other than paying out claims (eg: [2] and [3]).

So for an insurer, they don't want to set themselves up to depend on premiums to fund the investment arm because 1) there's an upper limit on how much aggregate premium can go towards anything other than claims 2) there's no limit on how much aggregate premium can go towards claims, 3) growing premium haphazardly can result in less money available for investing due to other regulations that limit risk and require a certain amount of liquidity for claims.

[1]: https://newsroom.statefarm.com/2019-state-farm-financial-res... [2]: https://www.law.cornell.edu/regulations/california/10-CCR-Se... [3]: https://consumerfed.org/press_release/auto-insurers-reaped-n...

The seed comes from initial investment, but if premiums weren't a major component of growth they'd just be an investment firm.

They don't have control over investment returns for the most part, so premiums are the only avenue for growth that they can do something about.

Aren't insurance rates regulated meaning if they payout a smaller amount than expected the rates will go down next year?

Now; I think the "medical loss ratio" requirements were one of the most important features of the ACA.

One of the worst offenders from the before-times was an insurance plan targeted at college students that had a 10% MLR.

To save those looking it up: medical loss ratio is the fraction of premiums an insurer spends on actual healthcare expenses. 10% means 90 cents of every dollar paid in premium goes to admin/profit/etc.

I wonder how MLRs interact with subsidies, backroom deals and manufacturer rebates - if an payer can inflate their MLR by double paying for a medication - but then they get a rebate back for half the cost they paid will MLR tracking catch that?

Payers often get incentivized to promote certain drugs via manufacturer kickbacks and I wonder if this system is also used to run around MLR requirements.

So that encourages greater payouts more or less synced with greater premiums in order to increase year over year real profits.

And given that the payouts are very nearly a function of how hard the insurance company can negotiate, they can simply choose to call off the negotiations when they reach their target amount.

Only up to a point, they still accept or recheck claims arbitrarily to get closer to their targets. Worse they have incentives to decrease efficiency by increasing paperwork etc.

Private medical insurance in the US is a horridly inefficient system. Separating the claims process from insurance companies hands might help, but their incentives are never going to line up with consumers.

> Worse they have incentives to decrease efficiency by increasing paperwork etc.

Money spent on paperwork comes out of the same pile as profit. The MLR cap preserves incentive to reduce paperwork, wherever premiums and payouts sit.

Not internal paperwork. Think in terms of industry wide collusion not a single insurance company. If lobbing or an industry group can drive up healthcare costs via say paperwork or regulations then every health insurance company is “forced” to raise premiums and as the maximum profit per premium ratio is fixed that also increases the total possible industry wide profit.

Of course insurance companies are also in competition so they have individual incentives to keep premiums cost competitive.

I think even in terms of industry-wide collusion, the push of an MLR cap would be to decrease (money spent on) paperwork.

With R = revenue, P = profit, A = administrative expenses, and M = medical expenses, we have:

    R = P + A + M

which we can rearrange a little bit to get

    P = R - M - A

From the point of view of an individual company, clearly increasing our own expenses means less profit:

    P₂ = R - M - (A + δ) = P - δ

But, as you say, if we force everyone to do likewise the situation is better because we can raise prices to raise revenue:

    P₃ = (R + δ) - M - (A + δ) = P

This holds whether or not we have an MLR, but in either case assumes that demand is sufficiently inelastic that we can raise prices enough to make δ more revenue (it won't be a matter of simply raising prices by δ/(number of customers) because some customers may chose to purchase less insurance), and at best it puts is right back where we started.

Does the MLR cap have an impact?

    MLR = M / R
    MLR₃ = M / (R + δ)
    MLR₃ < MLR

By raising our revenues to compensate for the additional expense, we find ourselves with a lower MLR. If we are not near the cap this has no effect; focusing on the other case we are forced to do something to raise the MLR. Where does that come from? Recall our present situation:

    P = (R + δ) - M - (A + δ)

We can lower P or A, but our whole question here is whether we can raise P by raising (everyone's) A so doing the former defeats our purpose and the later contradicts our assumption. We are stuck raising M and further raising R (if market conditions allow it). In a sufficiently inelastic market this is possible, but I really don't see the case where we've forced some extra slop that allows us to raise profit.

Of course if I believe that my company is better able to handle the new paperwork than my competitors, that could help - but if the whole industry believes that's the case then most of them are wrong, and in any event I believe this incentive is weakened not strengthened by the MLR cap.

If paperwork keeps new entrants out of the market, that is something current participants can probably agree on, but that's true in any case and I don't see how the MLR cap makes it stronger.

I don't think this analysis changes if we pull executive compensation out of "administrative expenses" and treat it as something we're maximizing in addition to (or instead of) profit.

Don’t forget a regulation that says Profit <= some percentage of Medical Expenses. In effect you have a normal demand curve but company’s can’t raise prices past some limit. Assuming profit maximization occurs below that limit it has no effect. However, insurance is unusually inelastic in part because much of it is subsidized.

So while thinking in terms of total administrative costs seems reasonable there are two different numbers here, administrative costs for the insurance companies and administrative costs for the healthcare industry and that matters.

So again, assuming it’s the regulation not market forces limiting profits increasing Ma directly increases profits. Up to some limit rather than P < (Mm + Ma) * X% it’s P = (Mm + Ma) * X%. Thus creating incentives to increase Ma.

Ah, yes, administrative costs within the medical organizations are presumably paid by passing those costs on to (payers including) insurance companies as "medical costs" and that is presumably counted in the M in the MLR (I could imagine a system that avoids it - at, ironically, the cost of some more paperwork - but I don't expect it's what we do).

It is true that the MLR cap does nothing to motivate insurance companies to avoid increasing hospital paperwork. I don't see that it produces incentive to create it - yes, increasing payments to hospitals increases allowable profit, but in order to make that profit you need sufficient revenues and customers aren't paying because they want hospitals to do paperwork. I'm of a mind that (at the margin) increasing legitimate (or nearly legitimate) medical spending is typically pretty easy so there is no need to find alternative ways of paying hospitals more; if I'm mistaken about that then you raise an important point that probably deserves attention (if it hasn't got it in some way I'm unaware of).

This is not remotely true.

Only to a degree because policies basically always have an upper limit on coverage.

If the payouts are dropping because there's a massive reduction in claims, then there's a pretty decent chance that paying the policy maximum on each claim still won't be enough.

Plus, profits don't come directly from the premiums anyway. They come from the investments the insurer makes with the premiums. So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium, or they can work on their loss modeling and investment strategy to better predict their actual loss ratio (which means they can have less money in reserve and more money in investments) or get better returns on the investments. And those 2 are usually a better use of resources since increasing coverage means an individual conversation with each policy holder. That's a lot of human-hours compared to the modeling and investing.

> So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium

Or they just stone wall and increase premiums anywhere they can until they hit targets. Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue. You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes.

The power relationship is very very tilted in the insurance company's favor and they can more or less dictate terms.

> Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue.

It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.

When employees go through big health events it's hard to keep it under wraps in a work environment... especially in this "race to the bottom" society we happen to live in. You can bang on about privacy all you want, but people talk.

I guess I'm shocked it happened in an office of ~250 as I've always seen it happen at much smaller places.

>It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.

That is how it would have to work if the employer wants to restrict the risk pool to the company's employees. After all, money has to come from somewhere.

But employers are welcome to participate in healthcare.gov plans where the risk pool is much larger (across the whole state), and where individuals in the company cannot be solely blamed for increases in healthcare costs:

It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.

Sometimes it's worse than the office gossip- https://slate.com/human-interest/2014/02/tim-armstrong-blame...

>You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes.

Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions:

https://www.healthcare.gov/how-plans-set-your-premiums/

If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it.

> Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions:

Which are stupid expensive for anyone much above the poverty level.

> If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it

A 250 person company wasn't self insuring or restricting their risk pool to only their employees. They wouldn't be negotiating premiums with an insurance company if they were self insuring.

If they were not restricting their risk pool, then how would a couple kids with cancer affect the company's premiums? The costs would be distributed across a much larger population.

When I was shopping around for health insurance for my businesses, the premiums were the same as what they would have been individually on healthcare.gov. Kaiser has a good report showing the costs are not that different based on firm size:

https://www.kff.org/report-section/ehbs-2020-section-1-cost-...

The cost of healthcare is pretty predictable, and spread over a sufficient population converges to the same numbers. Only option I can think of is people were thinking that the employer reduced their portion of healthcare they were subsidizing, and so people thought premiums were going up since the size of the portion they were expected to pay went up? Most people do not really know to look at box 12 code DD of their W-2 to know what is happening with their healthcare insurance premiums.

Because the premiums even for the larger risk pool can be negotiated with the insurance company. And if you suck at negotiating (like our HR), then you can accept at face value the arguments the insurance company makes about how much you're costing them, and how they'll just drop you if you don't accept higher premiums.

And I'm going to guess that your businesses had very, very few employees? To the point of not being worth negotiating with from the insurance company's perspective?

And Kaiser isn't run like most insurance companies.

Kaiser is short for Kaiser Family Foundation, which compiles nice reports about healthcare in the US. Using their reports does not have anything to do with Kaiser the company. Although their insurance side is similar to any other health insurer.

>And I'm going to guess that your businesses had very, very few employees? To the point of not being worth negotiating with from the insurance company's perspective?

Yes, but that was my point about businesses being able to just buy the health insurance plans available on healthcare.gov. Earlier you mentioned the healthcare.gov plans were:

>Which are stupid expensive for anyone much above the poverty level.

But the data does not support that. Average annual employer sponsored insurance is $7,675 for single PPO coverage in 2019:

https://www.kff.org/report-section/ehbs-2019-summary-of-find...

And average lowest cost monthly gold premium on healthcare.gov is $516 ($6k annual) in 2019:

https://www.kff.org/health-reform/state-indicator/average-ma...

So employers can probably save money going to the healthcare.gov plans, albeit with higher out of pocket maximums probably. But at least a couple kids with cancer would not throw off the premiums.

The Affordable Care Act (Obamacare) eliminated lifetime coverage limits. There are also limits of the minimum medical loss ratio.

Unlike property and life insurers, medical insurers generate very little income from investments. Premium revenue comes in at about the same rate as claims are paid out. They don't have large reserves to invest. And most large employers are self insured anyway, so the ”insurance" company just acts as a claims administrator.

The parents in the thread don't specify medical insurance. They're talking about a moral hazard in all forms of insurance.

for admitted policies, usually yes. But it's not just that the rate for the next year goes down. Premium payments have to be refunded too.

Insurance isn't inherently a moral hazard.

Inherently? No, just under capitalism.

I know that any anti-capitalism comments get immediately downvoted here but yeah...

The privatization of healthcare is a conflict of interest which is a product of our hyper-capitalistic society. You can't make a profit center out of human services without dehumanizing it in the process - the very nature of profit/capitalistic societies means someone has to lose and I see no place for these interests in healthcare or education.

Edit: yep - expected that. Maybe someone argue as to why privatization (which is a product of capitalism) isn't a conflict of interest in regards to healthcare?

Private health care is adversarial (so you have to look out for your own interests) but this does not automatically imply a conflict of interest. It may become a conflict of interest if you get your advice about which tests or treatments to undergo from the same health care provider who profits from you taking that advice, but this is something which you have control over: Get your advice from one place and have the work done somewhere else, just as you would for e.g. home inspections.

It's not as if public health care doesn't have moral hazards of its own, including conflict of interest. The system may officially be non-profit but the interests of its workers and administrators (profit-oriented or otherwise) do not necessarily align with those of the patient.

>the very nature of profit/capitalistic societies means someone has to lose

If by 'profit/capitalistic societies' you mean those allowing for voluntary exchanges between its people, I would disagree. As an adherent to the subjective theory of value, I think it is common that both parties in an exchange would consider themselves 'winners.' [0]

[0] https://en.wikipedia.org/wiki/Subjective_theory_of_value

I'm in the Jim Camp school of thought where, in negotiation, there is no "win-win" situation.

https://www.forbes.com/sites/jimcamp/2013/03/11/revisiting-w...

The reason I am firmly in this school of thought is that I've made the absolute mistake of a decision to try for "win-win" situations in a capitalistic society, specifically in regards to contract negotiations and ultimately pricing/billing.

When I'm making sure that the person on the other end of the table "wins" I'm putting myself at a capitalistic disadvantage; and - if both parties "won" then didn't both ultimately lose?

I get your ideal, but when money is involved I find that the "win-win" is very much that: just an ideal. And, anecdotally over the years I've found many business experts write on the topic of why "win-win" is a losing position which validates my position on this.

What is the definition of "win-win" that you are against?

I'm not familiar with Jim Camp, but the term is vague. The linked article to me mainly seems to argue that:

- the side with a better BATNA has more negotiating power (yes, of course) and

- a negotiator should avoid agreeing to a bad deal out of desperation (yes, of course - but not always easy to do)

I'm not sure how the concept of "win-win" specifically plays into it, so I think this is where definitions are useful.

To me, win-win doesn't make sense for transactional negotiations where there is only one dimension (usually price), but CAN happen for more complex negotiations with multiple dimensions where each dimension has different value to each party (price, time, volume commitments, etc...)

> if both parties "won" then didn't both ultimately lose?

No, because even in a capitalist society "winning" is defined by each party's relative improvement over the state they would be in if they didn't come to an agreement and make the trade—not by some absolute measure of whether they did better than the other party. A "win-win" is simply an agreement where both parties are better off for making the trade. This is the usual state of things when both parties are free to accept or decline and there is no deception (fraud) involved, since both parties need to accept the agreement and they will only do so if they believe that doing so benefits them. In rare cases one or both parties may be mistaken about the benefit, but they know their own business better than anyone else and are best positioned to judge the expected value of making the trade based on the information available at the time.

I have to agree with you for the most part, as a Canadian, I know our healthcare system is flawed, deep systemic problems, problems I'm not even familiar with. However, we don't have to deal with any of these price lists or copays or pre-approvals or debt (inside the scope of hospitalisation) I've even heard arguements that many of the pitfalls stem from privatised aspects. I'm a fairly capitalist person, but there is something awfully and fundamentally wrong about a society that monetizes well-being and health.

> However, we don't have to deal with any of these price lists or copays or pre-approvals or debt (inside the scope of hospitalisation) I've even heard arguements that many of the pitfalls stem from privatised aspects

Many of the current US medical problems (bureaucratization of medicine) actually evolved out of massive government regulation with debatable value. EMRs, ICD/coding, the bureacracu that eats up 25% of your doctor's day? It is mainly for insurance companies and Medicare/Medicaid.

https://healthncare.info/history-healthcare-insurance-united...

> I'm a fairly capitalist person, but there is something awfully and fundamentally wrong about a society that monetizes well-being and health

All the medical providers (doctors/nurses/therapists/techs/PAs/etc) do not work for free, and there is a significant logistics and technology tail in providing medical services at huge scale.

If you really want to go after waste in medicine ask the following questions:

(1) How much are the nonclinical hospital mgmt & insurance executives paid?

(2) What is the ratio of clinical to non-clinical personnel?

(3) Why is the US subsidizing the vast majority of the medical research, and drug profits for the entire world?

These are serious questions because, as my nearby regional hospital group was firing hundreds of nurses during COVID, their CEO was collecting millions.

>...the very nature of profit/capitalistic societies means someone has to lose

The last time you bought milk did you lose or did the grocery store? The last time you paid money for a hair cut, who lost there?

The extreme regulation of all aspects of health care that has developed over the last century has improved some problems and created other problems - the problems specific to healthcare have little to do with the "the very nature of profit/capitalistic societies"

> The last time you bought milk did you lose or did the grocery store?

There's way more people involved in that supply chain then me and the store. This is an over simplification.

Outside of the obvious answer of "the cows" - factory farming has been destroying my home state causing huge problems in rural America. Also - the environment. Big time the loser there is the environment for literally any bovine farming.

> The last time you paid money for a hair cut

When I was getting my hair cut professionally I tipped a $20 because I knew the gal cutting my hair working at the midwestern mall Regis Salon was making jack-all. I knew this because I worked at Geeksquad with her boyfriend, eventually husband. If I were not to tip well she would be at-risk for making minimum wage for that hour - and since you can't support yourself on minimum wage I see that as her losing.

I've always tipped my butt off because I know without that they lose.

---

So yeah - sorry... I anecdotally do see losers in the situations you described. I don't have to look hard to see them.

>Big time the loser there is the environment for literally any bovine farming.

Factory farming probably does cause externalities that aren't addressed. People could choose to buy from grocers who only source from smaller farms but there isn't as much interest in that due to price sensitivity.

>...and since you can't support yourself on minimum wage I see that as her losing.

Even in the case where you didn't tip, she likely would have preferred having the work than there not being a job available at that location.

Reminds me when my dentist charged me $50 for a cup of fluoride (nothing too special about this fluoride).

I asked why they said it would be covered. They said when they checked with insurance it says it’s covered, but for my age or whatever it’s not actually covered.

So then I said why is it my fault that you gave me something you said was free but actually wasn’t because your check wasn’t thorough enough?

They said they already spent it so someone has to pay…

In the end I didn’t pay for the fluoride after hours of argument.

Next year at a different dentist, same situation. I learned my lesson and just paid for the damn fluoride. Land of the free, home of the brave!

I never pay for this.

"No cavities again! Would you like a flouride rinse?" "Why would I do that? I have flouride in my mouth rinse and my tooth paste." "Well, ours is a higher concentration that I paint onto your teeth." "Didn't you say I had no cavities?" "Well, yeah." ".... so what I'm doing seems to be working without your rinse" "Well, it's only $16" "My flouride rinse has the exact same active ingredient as yours and costs $5 for an entire bottle." And it just goes on and on.

Yes, our medical/dental insurance industry has encouraged the attitude of “cost doesn’t matter, because it’s free to you (oh and besides, you can’t put a price on your health, can you, you cheapskate?)” which just serves to constantly let prices grow out of control. This is an instrumental part of how our healthcare costs got so high. It also is why it’s laughable to think of medical care as a free market: you can’t even find out what things cost before you buy most of the time. Not to mention that when you are in need of care, you often don’t have the luxury of shopping around.

What we really need is for people to stop thinking of insurance as a big blanket you buy that reduces the price of things to zero. That’s not what insurance is for. Insurance is supposed to be a system where you still pay for the cost of the good, but that buffers it for you so when you get an outlier cost, it doesn’t break you. It doesn’t make the costs of things go away. On average, you should end up paying a little more than the cost of your healthcare by purchasing it through an insurance plan. A high deductible plan does this: you actually pay the cost of all your healthcare up until a certain point out of pocket, and if you reach a certain amount (which is pretty high, but significantly less than the premiums on a low-deductible plan), the insurance takes over. This makes you actually aware of the prices of things and is healthy. Not to mention the insurance is a hell of a lot cheaper.

How effectively can you actually shop for medical care? Providers lobby against public measures of effectiveness so basically only payers have enough data to actually judge who is effective and people scream when their doctor choice gets restricted for any reason.

I don't think consumers budgeting can realistically be the control on the growth of healthcare costs. For one thing, people's budgets vary too wildly.

Healthcare should simply be "free", ie budgeted into the operation of a modern society, like infrastructure costs and education.

Oh, I completely agree with this. In the meantime, the HDHP and acknowledging that, yes, you are paying for your healthcare is the best option.

Just take all of the money you'd otherwise spend on dental care and put it into a savings account or FSA.

I've never seen a dental insurance plan that actually makes financial sense. Most of them place significant limits on expensive and unlikely care, and cover routine care with little or no cost sharing. Insurance is a highly inefficient way to pay for expected expenses.

Dental insurance via employer is mostly just a way to pay for dental healthcare via pre tax dollars.

And FSAs do that without the insurance company overhead.

Yes, the only downside I can think of is if you have an HSA (which anyone that can afford max out of pocket limit should), then you generally cannot have FSAs also unless they are Limited Purpose FSAs and then it gets too complicated for my tastes. I generally do not like the concept of FSAs period, being employer owned, and having to use up funds by the end of the year and all.

Agreed. I only put money in an FSA that I know I am going to use. But for my routine cleanings/xrays/etc, this is pretty easy to calculate.

The dentists peddle that nonsense because it is almost all profit for them. Insurance will not cover it because there is no strong evidence that it helps, assuming you are brushing your teeth regularly, have access to fluoridated drinking water, and otherwise have healthy eating habits.

> Is there any reason why this kind of windfall shouldn't be illegal? I realize it isn't, but is sure seems like it should be.

because our senators and congress critters are all on the buy for really cheap... it's not even hidden. something like medicare for all is the thing that makes sense but has a hard time finding traction because the people that it will negatively impact have the means to buy those politicians out.

> It feels like an agreement, to me, when the practice takes on a patient knowing who their insurer is. I feel like the reimbursement rate that insurer has negotiated, regardless of whether the insurer ultimately covers any procedures, should act as a cap for the fees charged to the patient. It feels a lot like negotiating a contract, except that one party gets to unilaterally change the amount of consideration. How does that fly?

You aren't exactly talking about "balance billing"[1] but you'll be pleased to know the No Surprises Act[2] tries to address this situation with required cost (estimate) disclosures in advance of a procedure and capping the out-of-network amount that can be charged in the event of an emergency where there can't advanced disclosure. The HHS recently promulgated regulations[3] under the Act but the compliance date is January 2022. For some reason I think there is at least one (maybe two?) other proposed rules in the works but I can't recall what they address and I can't seem to find them.

Edit: The other proposed rule is relating to air ambulance services[4]

[1]https://en.wikipedia.org/wiki/Balance_billing

[2]https://www.congress.gov/bill/116th-congress/house-bill/3630...

[3]https://www.hhs.gov/about/news/2021/07/01/hhs-announces-rule...

[4]https://www.healthaffairs.org/do/10.1377/hblog20210913.57633...

I've had this thought as well. If insurance is negotiating with the provider then that should be the final say. What's the point in negotiating if the patient gets charged the difference?

I believe this is called 'balanced billing'. Some states prohibit it under certain conditions but it seems either the government or insurance should be prohibiting this practice.

There are services you can use which will negotiate the rate back down to the neighborhood of what the insurer pays. They won't negotiate with you specifically, you have to retain one of these services to negotiate on your behalf. They have direct access to usual and customary charges insurers pay per region.

Was in a similar situation as you were, but unfortunately, what I'd have had to pay was still too much as it was clearly fraud on the part of an outpatient clinic - one side, the clinic, was approved by my insurer, the other side, the surgery center, was not, and they willfully lied about this distinction. I threatened a law suit and they demurred.

I think it ought to fall afoul of "informed consent." Did someone actually consent to paying without being informed of the price, or is it non-consent by virtue of being coerced by lack of information?

> Best insurance here is "don't get sick"

Recent New Yorker article looking at the "Costa Rica model"[0] raised this point as well. America, by contrast to Costa Rica, has a very weak public health sector and infrastructure, and this leads to a real weakness when focusing on preventable illnesses and issues.

[0]: https://www.newyorker.com/magazine/2021/08/30/costa-ricans-l...

Yeah I read that too - just cherry picking here:

> All adults have tests and follow-up visits to prevent and treat everything from iron deficiency to H.I.V. It’s all free. If people don’t show up for their appointments, she makes sure their team finds out why and figures out what can be done.

It's common sense why they have better results and outcomes than we do here... Our system is optimized for capitalistic profit. I've got insanely good insurance and I still have no idea how screwed I am if I go to the doctor or especially a hospital. Although I've only had one major billing snafu years back I have real anxiety about going to the doctor here.

And hell, even if I go my PCP is going to be stuck in an "all or nothing" mentality where it's either OTC or getting in their own conflict with my insurer... ie: "If I can't justify this test with your insurer..."

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Costa Rica's model is better than America's. The reason for this is because it's not optimized for profit, it's designed from the ground up to optimize for patient outcome.

In a well functioning health care system screenings like that is actually of debatable value as it generates a lot of false positives and un-necessary procedures.

> if an insurance company decides not to cover something (very very common, even in-network)

Which is why hospitals charge higher prices to insurance companies.

Insurance companies often blanket deny every single claim made against them. This forces the hospital revenue cycle department to have an appeals nurse review just about every procedure done in the hospital, and justify its use. This almost always results in a "discount" for something by virtue of a care provider not justifying every action they take.

Revenue cycle management departments used to be small, about 1 per 1000 hospital employees. Today, they are so big - and make so much money* - that hospital systems are spinning off their revenue cycle management companies for billions of dollars. Private equity firms have been acquiring in this space like mad since about 2016.

* Really, they are actually getting the money that is already owed.

That last sentence would be a great opener to the explanation of what insurance is, it’s not healthcare, insurance is something you don’t want to have to use. Healthcare is just healthcare, you can buy it from all sorts of places in various forms without billing to insurance.

Just like how car insurance is not a mechanic.

>> They have a column called "Uninsured cash price." These prices are <25% of the insurance "discount" prices

> And this can really cause issues for people who are insured because if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for.

That doesn't sound like an "inflated" price? 25% of what insurance companies are billed for?

I'm confused. I'm not sure y'all are talking about the same things?

He’s saying if you go in as an insured patient and get denied for a procedure by the insurance company after it’s been performed, you’ll get a bill from the hospital for the insurance-negotiated rate, not the uninsured cash pay rate. You can generally talk the billing department down to the cash pay rate, but that requires having a lot of meta-knowledge of how American healthcare works.

omg, I see what you mean. Confusing as heck.

Underpayment is a few percent of hospital revenues. It's a component of costs for sure, but only a small one.

https://www.aha.org/factsheet/2019-01-02-uncompensated-hospi...

My understanding is that you would usually pay the price set by the agreement your insurance has, even if they deny coverage of it.

"I realized was that hospitals are largely subsidizing the cost of the uninsured by over-billing the insured folk's insurance companies."

1. You have to back up claims like this.

2. I imagine for-profit Insurance companies would love to blame their prices on the uninsured.

3. Many poor people actually have insurance in the USA. Even if they don't apply for it, insurance can be applied for after the fact.

4. The wealthy, and the poor are usually covered by insurance. It's the middle class that needs attention. They have insurance, but it's not great.

I still don't belive our healthcare costs are due to the uninsured. Oh yea, every hospital has a fierce Billing and Collections department.

They are allowed to go after your assets if you can't pay your bill, and they do. Obamacare gave patients some rights, but hospitals blatantly abuse the regulations.

The right to collect in municipal court was never taken away from hospitals.

In my local newspaper, it's not uncommon for a hospital to sue a patient over a bill, and put a Judgment lien on the patients assets.

They claim they only do this as a last resort, but bankruptcy due to medical bills are still the number 1 reason people end up in federal court (Bankruptcy).

Your protections under a bankruptcy are not great either.

There are many hospitals that forced a former patient to sell their home (homestead exemption needs to be higher. In TX, they can't touch your primary residence.). under a bankruptcy.

In CA, for example, the primary home gets a $250,000 protection. (Look up that last figure. I know it's very low in CA, and needs to be raised to at least a million. You have a $600,000 home. You are only protected by $250,000 of it's worth.

So in America, if you do get sick, and can't pay all your medical bills, you have no protections. These for-profit medical companies will come after you with more zest than an unpaid credit card. I think CC companies are less aggressive.

1. All you have to do is look at the chargemaster flat files that have been coming out. There are literally two different columns for insured and non-insured procedure cost and for every hospital I've obtained a chargemaster flatfile for this is the case. Other comments in this thread have backed this up, and have even claimed their hospital's chargemaster had the non-insured pricing column hidden potentially in bad faith.

2. I mean, I have no idea but for-profit insurance companies aren't out there really blaming anyone as they're just a faceless corporate entity. I've only heard hospital staff and normal people blame the uninsured.

3/4... no - poor people don't have insurance. I've grown up around people who were not economically privileged/who were struggling and this is just 100% untrue that poor people can get insurance as you posit. I've had private insurance and it's just not something someone can afford if poor. And, if you're referring to things like "Christian Healthcare Ministries" they're straight-up scams. Outside of that, there is no way American restaurant owners, retail franchises, etc will cover an unskilled laborer's health insurance - that just does not happen here.

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> I still don't *believe our healthcare costs are due to the uninsured.

When it comes to hospital billing - yeah. It is a huge thing that's baked into their SOP. See item #1 above.

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There's police around hospitals constantly and if they get a whiff that you have a fake ID they're going to be talking to law enforcement sooner or later.

Also this isn't going down to your corner liquor store and flashing your drivers license... that thing is going to get scanned etc.

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Actual protip: If you're uninsured and need care they legally can't turn you away at an ER. They have to provide the healthcare to get you stabilized regardless if they're going to be able to bill for it or not... which ironically this is a big part of why the insured end up subsidizing the uninsured at the hospital.

Also, if this ends up being you - don't sign anything until you're in the right mind to sign something. They're going to try to pin you to bill your ass off one way or another and if you're half way through a heart attack or something do not sign anything until you can 100% understand what you're legally agreeing to.

I've often wondered what would happen if you went to the ER, carried no identifying documents, and just refused to identify yourself. Just hope nobody recognizes you there.

Giving a fake name is fraud, and people have been arrested for doing that at the ER. (Fuck America.) But I don't know that there's any legal obligation to give any name at all. If you don't give them a name, you're not lying to them, and oops, looks like they don't have a way to bill you. As you note, hospitals are legally required to provide emergency stabilization without regard to ability to pay.

I suppose the hospital could try to call the police, but AFAIK the police cannot compel you to identify yourself without reasonable suspicion that you have committed a crime.

People show up at hospitals physically unable to identify theirselves all of the time.

https://www.npr.org/sections/health-shots/2019/05/07/7207022...

Hospitals that accept medicare do have a legal obligation to stabilize patients. But we're talking 'stabilize' as in 'you're not dying'. If you're alert and capable enough to be arguing with people and you're not a psych danger, you're likely stable enough to legally be thrown out on the street.

I'm aware of that. That's different from refusing to identify yourself to avoid paying money to the healthcare racket.

The discussion here is whether there is a legal obligation to identify yourself. If there is such a requirement, it would apply to someone who is fully capacitated but refusing to identify themselves. It would not apply to someone who is unable to identify themselves due to incapacity, because such a person obviously lacks any criminal intent.

There is no legal obligation for you to identify yourself to any businesses that I'm aware of. Most businesses will refuse you services if you refuse to cooperate in paying, to the extent that they are legally able to do so. I think you can expect that a hospital met with this scenario will complete their obligations under the EMTALA and nothing more.

Even with identification, healthcare systems usually will not do more than they're required to under EMTALA. The hospital will provide intensive care to the uninsured DKA patient, since they're obligated to do so under EMTALA, but they will not provide that patient the insulin and other care necessary to prevent them from needing ICU in the first place, since it's not yet an emergent condition.

If there's no risk of criminal exposure, even insured people should start doing this. Hitting hospitals with uncompensated care under EMTALA is one of the few points of leverage we have to fight back against these murderers. Hospitals are, by and large, not innocent parties in this -- several hospital groups are even members of the Partnership for America's Health Care Future terrorist group, which bribes politicians to fight Medicare for All.

It would bring me great pleasure to get to tell a hospital to go fuck themselves and to quit bribing politicians to fight M4A if they want to get paid next time.

If I'm dying, I want the best care I can get. I'm not about to argue with someone trying to save my life to make a political point to an ER doctor who didn't have anything to do with it in the first place. And I'm certainly not about to risk my own health outcomes by withholding the insurance that I paid for to help me in that exact scenario.

Oh, I wouldn't be arguing with the ER doctor. I'd be arguing with the billing murderers, like the one that comes in to shake you down for money while in the ER bed.

I believe legally they have a duty to provide care.

Yes, that's my understanding. So wouldn't refusing to identify yourself be an effective way to avoid a bill, without the criminal exposure of giving a fake name or ID?