This is not health insurance screwing you

Getting screwed you say? If you believe the following, you are getting screwed by misinformation.

Do you believe for a moment that private insurers would not pay providers less if they could?

Insurers must balance building a network of providers for customers and paying the minimum fees that will allow that. The insurers make no money by paying higher fees than Medicare.

Medicare sets its fees, it does not negotiate and since the fees are below market that shifts cost to the private sector, just as restraining drug prices just for Medicare will shift costs to private payers.

Large companies – roughly 1,000 or more employees – typically self-insure their health benefits and the insurance company hired to administer the program has no financial risk for the cost of the coverage provided, but still must seek to have the most efficient networks.

If anyone is getting screwed, it’s by Medicare not your employer plan.

How do Medicare prices for doctor visits and hospital 
stays compare to employer-based insurance?

https://www.kff.org/medicare/issue-brief/how-much-more-than-medicare-do-private-insurers-pay-a-review-of-the-literature/Private insurers paid nearly double Medicare rates for all hospital services (199% of Medicare rates, on average), ranging from 141% to 259% of Medicare rates across the reviewed studies.

The difference between private and Medicare rates was greater for outpatient than inpatient hospital services, which averaged 264% and 189% of Medicare rates overall, respectively.For physician services, private insurance paid 143% of Medicare rates, on average, ranging from 118% to 179% of Medicare rates across studies.

People don’t realize how much they’re getting screwed by their for-profit, employer-based health insurance, or God forbid, an Obamacare plan that leaves you vulnerable to out-of network costs and “surprise billing”.

The Early Retiree Homepage

3 comments

  1. A note I recently sent to AARP which was patting themselves on the back for the Rx changes in the Inflation Reduction Act:

    “Yes, Rx prices for Medicare-eligible may be less than they otherwise would be. But, if they are, as in Medicare Part A, those not eligible for Medicare or Medicaid will pay more. Squeeze the balloon here, watch it pop out elsewhere. Providers shift those costs, charging those not Medicare eligible two or three times as much – as documented by recent Rand studies, and consistent with recent reporting in my local newspaper, the Dispatch. I thought AARP was to represent the interests of those ages 50 – 64 … clearly you do not.”

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    1. Excellent point. The ARRP is a joke only exceeded by the Senior Citizen League which puts out inaccurate SS COLA projections all year.

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  2. Just glancing through the study on kff concerning private reimbursement versus Medicare reimbursement for hospital services and physician services, I noticed the reimbursement rates for private insurance were 118% and up higher than Medicare. Of course, the average reimbursement was higher than the lowest reimbursement amount.
    It seems to me that reimbursement rates paid by Medicare should be raised to at least the lowest rate paid by private insurance. This would solve some of the pressure on current employees who have to pay large premiums and copays. Medicare rates would go up on retirees and perhaps a surcharge on retirees to help offset the cost increase needed for the increase of Medicare tax on current employees. Sort of an equalization deal. Just a thought.

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