Since 2000, the US population has grown from 282 million to 331 million people. That’s a pretty large boost in a population needing health insurance, but thanks to many factors — including the Affordable Care Act which was signed into law in 2010 — the number of uninsured Americans has declined from 38.7 million in 2000 to 26.1 million in 2019.
With a larger population to insure, you might think that healthcare providers could lower their rates, and therefore decrease premiums and out-of-pocket expenses, right? Wrong.
If you’ve been insured for the past two decades, you know that costs are only going up. Both premiums and out-of-pocket — even for covered services — have continued to rise, while the number of uninsured has continued to decrease. This doesn’t make sense and it is leading to serious consequences.
With millions more covered, there are millions more who think their care will be paid for, but it is often not the case. Because insurers are shifting the burden of cost to patients, even in-network care can result in bills patients didn’t expect and simply can’t pay.
According to a Federal Reserve Report in 2018, about 40% of respondents wouldn’t be able to come up with $400 for an unexpected expense. This explains why over half of medical debt that is sent to collections is for less than $600. Currently, 32% of American workers have medical debt, and half of them have defaulted on it.
As this problem continues to grow, hospitals have had to turn into collections agencies, but despite their persistence, 67% of out-of-pocket expenses go unpaid. This is clearly unsustainable, which is why healthcare providers are trying alternative payment methods. Two that are gaining in popularity are paying the deductible up front and offering cash discounts.
Paying the deductible up front is exactly what it sounds like: before receiving care, you pay your entire deductible, allowing the care provider to ensure they won’t be chasing you for out-of-pocket expenses and allowing them to send any costs beyond that to your insurance provider.
As many people can’t afford to pay their entire deductible in advance, providers are also offering cash discounts. Instead of waiting to see what you owe when going through insurance, providers will give you upfront pricing and a decrease in cost, if you pay them directly. This can save you thousands of dollars and are often offered with payment plans that can make large bills more manageable.
Even better than potentially saving money, where insurance makes you choose from their select group of in-network providers, cash and the discount it offers is accepted everywhere so you can choose exactly who you want for your treatment.
As insurance companies have grown, they seem to care less and less about lowering costs or improving care for the insured. This results in more people falling into debt and more care providers being stuck without payment. By exploring alternative reimbursements, care providers ensure they’ll have their bills paid and patients get better care for less money.
That’s a real win-win.