As Americans begin shopping again for health insurance under the Affordable Care Act on Saturday, they’ll be wrangling with premiums, deductibles, out-of-pocket costs and other vague and confusing insurance-speak.
Believe it or not, that’s the easy part compared to figuring out what the overall cost of health care is.
Sal Morales of Miami bought insurance in March during the ACA’s first enrollment period on healthcare.gov.
“I got my cards and it was like amazing,” Morales says, “like if I got an American Express Platinum card. That’s how I felt.”
Morales was unemployed at the time. Money was tight. And he knew he needed regular doctor visits to manage his high blood pressure. He diligently researched what he would get for the price before settling on a plan.
“Instead of me paying $560 [a month] for COBRA, I found out that I would have insurance for $145. I have a network deductible of $500,” Morales says. “My first three visits to a primary care physician, they’re zero dollars. Then it’s $5 out of my pocket.”
Morales understands his end of the health care equation, but what he sees doesn’t necessarily reflect what gets paid to doctors and hospitals for his care, says Bruce Rueben, president of the Florida Hospital Association.
Here’s how he breaks it down: “There’s one party, the hospital who provides the service. There’s a second party, the patient, who receives the service. And there’s a third party, the insurance, who pays for the service.”
That third part is where health care pricing gets really squirrelly.
Every hospital has its own “master list” of charges for different services. Those charges are different from hospital to hospital.
But insurance companies don’t pay those listed charges. The listed charges are almost fiction. Instead, each insurer negotiates for lower prices with each hospital and doctor on every plan. And insurers can have multiple plans with multiple agreements for the same hospitals or doctors.
Even if two patients have the same insurer, if their plans are different, the insurer may pay the doctor differently for the same care for each of the patients.
All of this means there are about as many pricetags for that hypertension checkup as there are insurers and providers.
“For an individual consumer I am completely sympathetic that it’s very confusing,” says Dr. Ezekiel Emanuel, who was an adviser to the president during the drafting of the health law and is now a health policy expert at the University of Pennsylvania.
“There are at least six different prices for a hospital day. And then there’s the cost of actually delivering the service, which, for most of these things, even hospitals don’t know what that is. So when you say, ‘What’s the price?’ It’s almost a meaningless question, because there [are] all these different prices.”
Those negotiated rates—the prices insurance companies really pay hospitals—are treated like trade secrets. Insurers and many hospitals don’t want their competitors to know what the payments are
It is only on an individual basis that people can see the prices their insurer paid for their care. And it’s after the care has been delivered and only if the person is already insured.
It’s buried in a statement called an explanation of benefits. These are the letters from insurers that look like a bill but say “this is not a bill.”
Efrain Monzon helps patients interpret those explanations for Florida Blue, the largest insurance company in the state of Florida.
“We’re identifying the procedure, we’re identifying the provider, the date of service and then making sure the amount, the member responsibility has to be in there,” Monzon says.
Wedged into that statement somewhere between the billing code and the member deductible, is a column for the amount paid.
This is the secret number the insurance company and the provider have worked into their contract, says Monzon. The industry terms are usually “adjusted rate” or “negotiated rate.”
In Florida Blue’s explanation of benefits to patients, it’s called simply “amount paid.”
To get a clearer sense of what health care costs, someone would have to collect enough of those statements from patients at all different hospitals with all different insurance.
There are companies and crowdsourcing projects trying to do just that around the country. And Massachusetts has a law that says insurers have to disclose some of these prices in a way that is accessible to patients.
But so far, that’s not happening in South Florida.