We view our own health care providers as benevolent and altruistic. Unfortunately, many of these altruistic and kind individuals work for evil accounting offices whose focus is to bleed you to death financially:
Too often after a hospital procedure or visit to an emergency room patients get hit with unexpected bills from out-of-network doctors they had no role in choosing. These include assistant surgeons, emergency room doctors and anesthesiologists.
Source: Health insurance premiums could drop 5% if the U.S. banned surprise medical bills – MarketWatch
We just ran into balance billing. The local monopoly accepted a usual and customary reduced payment from a third party group payer. But then turned around and billed us for the entire remaining amount.
(SEE IMPORTANT UPDATE AT END OF THIS POST – A 2022 FEDERAL LAW PROVIDES PROTECTIONS AGAINST BALANCE BILLING FOR EMERGENCY CARE SITUATIONS)
Let’s say you have a “list price” $15,000 bill for health care. Chances are good that an in-network service charge for this would be as low as $5,000 and that is what the health care monopoly accepts in payment. But, in many places the health care monopolist bills the patient for the not covered by insurance.
Stated another way, the hospital bills for $15,000, and accepts a negotiated insurance payment of $5,000 at the customary discounted price, but the health care provider then bills the patient for remaining $10,000.
Imagine if you walked in to a grocery store and you paid different prices based upon which credit card you used to pay your bill. That’s what industrial health care does: prices vary not based on the service but on which “buying club” you belong to and how you choose to pay.
They do this because they can. They do not provide prices in advance and in an urgent scenario, you have no choice to but accept their blank bill upon entry.
Consider ACA policies. Much to the surprise of those with employer provided group insurance, ACA policies are not anything like your ESI. Where I live an “ACA Silver” plan with a $7,000 deductible costs $24,000/year (in 2020). For the most part, you will spend over $30,000/year before you receive “benefits”.
Furthermore, check the fine print – almost all of the ACA policies in my area exclude coverage for hospitalization or surgery “out of network”. We are used to seeing limitations such as “50% coverage for out of network” – but most ACA policies in our state decline all coverage for serious problems out of network. This is true in my state – Some people argue this cannot possibly be true – however, I confirmed it with an insurance broker.
Furthermore, all but one policy offered on the ACA “exchange” then provided in-network coverage in very limited geographic areas. Depending on the provider (in 2020), you could have had “in network” coverage in just 3 counties, just the state, or one provider had some in network providers in an adjoining state. There was no “in network” coverage in any other U.S. state.
Literally, while traveling in the U.S., if something were to happen requiring surgery or hospitalization, you had no insurance coverage. None. The Affordable Care Act created – a market of no insurance coverage.
What about “ACA subsidies”? If your household pre-tax income is above about $68,000 per year, you are not eligible for subsidies. When Jonathan Gruber wrote these policies into the ACA, he set up the subsidy cut off level to be determined as a function of the local poverty income level. The cut off level has no connection to insurance prices. Consequently, there are situations such as in Laramie WY where a Silver plan for an older couple costs $49,000/year with a $5,000 deductible – but if they make $69,000/year in pre-tax income, they are not eligible for any subsidies. Simple math – if your pre-tax income is $69k/year, after Federal and state taxes, property taxes – you basically have no money left for food and shelter.
UPDATE MAY 2026
A Federal law passed in 2022 “The No Surprises Act” prohibited most “balance billing” for emergency services and some non-emergency services done at “in network” facilities.
If you are treated for an emergency where you did not have a choice for your care, you pay only your in-network cost. If you receive care at an in-network care center, you cannot be balance billed if, say, one of the care providers is “out of network” – they have to accept the in-network payment.
If you voluntarily get care at an out-of-network care center, you can still be billed at high rates. The bottom line, then, is you can still be hit with out of network charges in non-emergency situations.
