Paying More for Healthcare with Insurance than Without

Imagine having health insurance and still paying more for healthcare than if you had no insurance at all. This is what happened to Chelsi Ross, a 34-year-old woman who experienced a financial shock after an emergency hospital visit.

---

Chelsi Ross’s Story

Four years ago, Chelsi Ross went to the emergency room at Methodist Hospital in Richardson, Texas. She had sudden chest pain and trouble breathing. Luckily, her tests showed nothing serious, and her symptoms went away. However, her four-hour ER visit cost a whopping $11,300.75.

Despite having health insurance, Chelsi ended up paying more than she would have if she didn’t have insurance. This reveals a big problem in how our healthcare and insurance systems work.

---

High-Deductible Plans and Out-of-Pocket Costs

Chelsi’s insurance was a high-deductible plan from Aetna. This meant she had to pay $5,000 out of her own pocket before her insurance would cover anything. So, she was essentially paying cash for her care until she met that deductible.

Hospitals and insurance companies have “negotiated rates,” which are lower than the “sticker prices” hospitals list. In Chelsi’s case, the hospital billed Aetna $11,300.75 but gave a discount, making the final bill about $8,000. Aetna paid $2,192.03, leaving Chelsi with $5,605.49 to pay herself.

If Chelsi had chosen to pay in cash without using her insurance, she could have gotten a 45% discount, reducing her total bill to $6,215. This means she would have saved money by not using her insurance.

---

The Cost of Insurance

The average yearly health insurance premium is $8,345. So, even after paying premiums, deductibles, and co-pays, many people end up paying more than if they didn’t have insurance. This highlights a major flaw in our healthcare system.

---

Financial Struggles with Medical Debt

Even with insurance, many people struggle with medical debt. According to a report by the Kaiser Family Foundation and The New York Times, 61% of people with medical debt have insurance. This debt forces many to cut back on essentials like food and clothing, leading to wider financial instability.

---

Policies and Reforms

Several policies have been proposed to address these financial burdens. For example:

1. Price Transparency Act (2021): Requires hospitals to publish pricing information online.
2. Transparency in Coverage Act (2023): Requires health insurers to post price information for covered services.
3. No Surprises Act (2022): Prevents unexpected emergency bills.

However, these policies wouldn’t have helped Chelsi. In emergencies, patients don’t have time to compare prices. Moreover, hospitals often prefer billing insurers for higher reimbursements, making it hard for patients to choose to pay cash.

---

Seeking Solutions

Despite contacting the hospital multiple times in 2021, Chelsi couldn’t get the cash discount. Instead, she received calls asking how much she could pay and offering a 25% discount if she settled the bill immediately. This negotiation resembles bargaining more than a proper healthcare system.

---

Conclusion

The World Health Organization states that a basic health system should protect people from financial catastrophe due to healthcare costs. Yet, in the United States, one of the richest countries in the world, many face financial ruin from medical bills.

Potential reforms include:

• Single-payer system: A government-run system that covers everyone, reducing inefficiencies.
• Public option: A government-established plan that people can choose to join.

These solutions require serious discussions and willingness to change.

Meanwhile, Chelsi Ross, like many Americans, continues to pay monthly for healthcare she received while being insured.

References:

• Kaiser Family Foundation and The New York Times report on medical debt.
• Price Transparency Act, Transparency in Coverage Act, and No Surprises Act information.