For the uninsured, currently 8.2% of all Americans, paying cash for medical care is the only option. However, even for those with health care coverage, paying cash is an attractive option.
High health care costs encourage Americans to purchase medical discounts.
“The United States often pays higher prices for the same brand-name prescription drugs, hospital procedures, and doctor care than similarly large and wealthy countries,” declared a recent analysis by KFF, formerly the Kaiser Family Foundation, a nonprofit focused on health issues. The report found that health care costs have generally grown faster than inflation, representing a larger share of the U.S. economy than in similar countries, and that “higher health care costs in the United States do not consistently translate to better health outcomes.”
With discounts of up to 80% on medical expenses, it is becoming increasingly difficult not to consider cash-paying healthcare.
Knowing the cost of a medical procedure in advance is the best way to avoid health care “sticker shock” and compare cash price options. Of course, this is not always possible, especially if emergency care is needed.
However, for planned medical procedures, when requesting a service price, you will likely be sent “Charge Master” prices.
Chargemaster rates are based on what health care providers have negotiated with insurance companies. If you have coverage, you may not think that the insurance company has to pay is important – as long as 10% to 20% of your coinsurance is taken.
To compare costs, you’ll want to ask for a cash quote. This is even more important if you are uninsured.
Here’s an example of how the price tier works in an example of MRI costs by an insurance company:
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Chargemaster Price: $5,000
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Insurance Negotiable Rate$2,000
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Cash priceFrom 500 to 800 dollars
The government has two programs to help raise public awareness of medical costs: Transparency in Coverage and the No Surprises Act.
Turquoise Health, a healthcare cost advocate, is urging the government to make price transparency reports more consumer-friendly. Current machine-readable files should be made “less technical” and more “descriptive”.
KFF said the pricing information is “more and more often confusing”, noting that it is used more by industry than consumers.
The No Surprises Act, which took effect in 2022, aims to reduce surprise medical bills that often result from emergency treatment or unexpected illness. It can also be from services received from an out-of-network provider.
To know your medical expenses and compare the cash price before you are billed:
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Ask your provider for a good faith estimate. Mandated by the No Surprises Act, cash-pay patients will receive a written estimate of scheduled services.
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For hospital charges, ask for negotiated rates. The Transparency in Coverage Act requires hospitals to provide out-of-pocket cost estimates to insured patients, as well as service prices to copay patients.
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If insured, check your insurance company’s website for cost estimates. Many insurers post network provider charges for various services and procedures. You can search through the treatments you need to find an estimate of your out-of-pocket cost.
A caveat noted by the American Hospital Association: With the many ways costs are estimated and provided to patients, confusion can still arise.
“Reported price information may be inconsistent, and patients may not have a clear indication of which source to rely on. As a result, the proliferation of devices may create patient confusion rather than provide value,” the AHA said in a fact sheet.
For a simple and straightforward answer, you can also call the provider’s billing department. Remember, if you’re not filing a claim with an insurance company, you’re looking at a cash price quote.
In a new analysis of prescription drug prices, particularly in hospital settings, 3 Axis Consultants found that prices vary not only by hospital, but inside Hospitals
“Significant variability persists not only within hospitals but also within hospitals, where prices for the same drug can vary tenfold or more depending on payer contracts and billing unit variables,” the study noted.
3 Axis consultants also found that hospitals typically reported a gross price and a cash price for each drug, but several negotiated prices.
“Many hospital patients—those with insurance—face potential price confusion,” the report continued. “When the same drug or healthcare service has dozens of different prices from the same provider on the same day, it can be difficult to argue that there is a fixed price for that product or service in that location.”
In a quarter of the cases studied by Axis 3 Consultants, cash payers received no discount from the prescription list prices that insured patients paid. In half of the cases, the cash discount was 30% or less.
However, the company also noted that in some cases, the cash prices were lower than the prices negotiated by the insurance companies.
All of this makes it difficult to afford health care prices, 3 Axis said.
Some national prescription drug providers promise significant discounts for cash payments, including GoodRx, SingleCare, TrumpRx, Visory Health, and nonprofit providers like NeedyMeds and RxAssist.
You can also search for local hospital drug prices at hospitaldrugprices.org.
Read more: What is TrumpRx, and can it help you save money?
Another affordable healthcare option is direct primary care. Unlike concierge care, which is a premium service that can be expensive, direct primary care often costs between $50 and $150 per month, paid directly to your provider.
For routine health care, it can help reduce your health care costs or your insurance premiums, especially if you are in good health.
If you have medical expenses you’re struggling to pay, check the bill for errors first. Compare the last bill you received to make sure the services and procedures are correct and have not been billed twice. You can also ask a patient advocate to help with the process.
Here are other resources to consider:
Don’t worry about the daily ATM withdrawal limit. “Cash pay” doesn’t mean that. It only pays the provider directly, not through insurance.
Of course, having health insurance is important. Insurance can be vital for annual wellness visits, screenings, and preventive care. But if you can’t afford it, have a high-deductible health plan, or are simply looking for ways to save on medical expenses, paying cash can be an option. Many providers, such as labs, outpatient procedures, and imaging labs, offer discounts for cash.
Having an emergency savings account for unexpected major health care expenses is a safety net to look forward to. Start small, donate often.
Read more: HSA vs HYSA: Which option is better for saving on medical expenses?
