Ask About Cash Rates

The third of Ten Tips to Spend Less on Healthcare is to ask about cash rates for services whenever possible. Cash rates are often discounted and also often less than your co-payment and deductible costs would be after your insurance paid its portion of the negotiated price.  You can download the complete list of ten tips within seconds at no cost by texting the word “JOSH” to 72000.

But before I provide more detail on how your family can save thousands by inquiring about cash rates, let’s take a brief journey through the history of the demand for cash rates.

Let’s start by discussing the eight words that killed American healthcare.  “Don’t worry, your insurance will pay for it.”

What a fallacy that is. But in the 1980’s and 1990’s Americans were duped into believing that they did not need to worry about medical bills, as their employee sponsored insurance plan would cover the costs. This allowed hospitals to start charging more for services, and insurers to raise rates year over year.

After watching this pattern continue for more than 30 years, the cost of providing employee health benefits skyrocketed and today health benefits remain the second largest expense in most company’s beyond payroll and salaries. As a result, employers started to pass more and more of the cost of healthcare on to the actual employee. Employee premiums rose, as did co-pays and deductibles.  

By 2008, almost half of Americans were enrolled in high-risk, high deductible health plans. As a result most families were on the hook for the first $5,000 of care each year. And few families budgeted for this expense, but this model was unsustainable for most American families, even those who traditionally had not worried about health benefits as the employer had always provided the health plan. For the first time ever, Americans were given reason to stop and engage in the healthcare process just like they would when buying a home or automobile. 

By the time the 2008 Presidential election rolled around healthcare reform was one of the top priorities for both Presidential candidates. Two years after his election, President Barack Obama passed what he refers to as the landmark accomplishment of his eight years as President, the Patient Protection and Affordable Care Act of 2010. The legislation, also known as ObamaCare included a mandate that required every American to get health insurance. 

Although the Trump Administration later removed the mandate requiring all Americans to have insurance, several left-leaning states including California passed statewide mandates requiring minimal essential health coverage. 

The combination of these factors led to consumers engaging in the healthcare process, shopping hospitals and providers and looking for the best value for services just as they do in other industries. Providers including doctors and hospitals began seeing an increase in requests for cash rate quotes. 

It was a frustrating time for many for two primary reasons. First, mainstream media and culture had led us to believe for thirty years that healthcare was paid for and that families did not have to budget for it as an expense as it was “provided by the company,” and this was no longer true. Second, high deductible plans became the norm so for the first time ever the consumer was forced to engage in the pricing discussion with providers and as a result the discussion often turned to cash rates potentially being a more cost efficient approach than paying the individual share of costs of the insurance company’s negotiated rate. 

Then the word got around. It is not uncommon to hear people say “the cash rate was cheaper than my share of costs if I went with my insurance, so I just went with the cash rate.”  Well, your insurance company wins there too, as they are off-the-hook altogether! 

When it comes to asking about cash rates, every provider has them. However, you often have to ask. Hospitals prefer not to post prices as the cash rates are much lower than the insurance company’s negotiated rate, so it was never of benefit to them to post the prices until 2019 when the federal government made it a requirement.

So, whether you are having a baby, need a physician consult, need some lab work done or are scheduling a surgery, in every case it pays to ask in advance about cash rates. Remember to ask in advance about cash rates because often times the process becomes complicated after the procedure if the provider notifies your insurance or bills them for procedures. Implementing this tactic could save your family thousands of dollars annually as you become an EHC, an Engaged Healthcare Consumer. 

So now that you understand how to save by asking about cash rates, why not request the complete list of Ten Free Tips to Spend Less on Healthcare?  The complete list also includes a brief Personal Healthcare Spending Reduction Tool to assess your family’s greatest area of wasteful healthcare spending and our non-profit guarantees you will save $5,000 a year if you implement each recommendation. You can download the complete list of ten tips within seconds at no cost by texting the word “JOSH” to 72000. 

Download the list. Complete the Personal Healthcare Spending Reduction Tool and take advantage of our $5,000 annual savings guarantee and start saving today.