[notliketherest]

It's the insurance companies dance with the healthcare providers. Over many decades, the insurance companies have negotiated payments much less than the quoted payment. In turn, the healthcare providers raise their rates in order to make sure they can still make money even with the discount they give insurance. When the time comes for the insurance companies to renegotiate, the same thing happens, and the healthcare providers raise their rates. This works fine for those of us who have insurance, but for non insured individuals, they have to pay the "actual" rate - which has been inflated because of the insurance company discount! This has been going on for many decades.

[chimeracoder]

> ver many decades, the insurance companies have negotiated payments much less than the quoted payment. In turn, the healthcare providers raise their rates in order to make sure they can still make money even with the discount they give insurance. When the time comes for the insurance companies to renegotiate, the same thing happens, and the healthcare providers raise their rates. This works fine for those of us who have insurance, but for non insured individuals, they have to pay the "actual" rate - which has been inflated because of the insurance company discount! This has been going on for many decades

This is close to correct, but a subtle correction:

Medicare and Medicaid set their reimbursement rates by fiat, and providers have essentially no ability to negotiate those. Except in critical access areas, Medicare actually reimburses much less than the marginal costs of care for its patients (7% in the aggregate). As a result, providers present very large bills to everyone else (privately insured and uninsured patients) to make up for this loss - you can't stay in business if you're literally making a loss on every patient! Uninsured patients see the large bill and assume they have to pay the entire amount (they don't!), and private insurers end up negotiating that down to some multiple of what Medicare pays.

A typical insurer will negotiate an agreement like, "we'll pay 350% of what Medicare pays for this category of services".

[ra1n85]

Great insights - never considered this.

I can't imagine that insurance not being available for purchase across state lines is helping here, either.

[wapz]

It's really ridiculous, too. I went to the ER for stomach pains in california for 3 hours (ct scan, IV, and morphine). It was $3500 (no healthcare). I was in college and talked to them and paid around $800. I went to the ER in Japan overnight (12 hours) ct scan, IV, and it was $40 (insurance covered 70% so it was about $130).

[mullen]

There are several states where health insurance sells across state lines. It does not lower the price of health insurance.

[ra1n85]

How can you say that? When an arbitrary law creates artificial markets and restricts the choices of consumers, you really think that prices aren't affected?

[mullen]

Because health insurance is not about scarcity or moving goods across state lines. Setting up insurance is much more complex than that and I think that is why people get caught up in thinking that allowing insurance to be sold across state lines will help.

When an insurance company sets up in another state, they have create a network of doctors, hospitals and medical providers. The doctor network does not just pop up over night.