This week I underwent a minor outpatient surgery procedure. I have insurance, so the procedure was covered. But I found the breakdown of costs quite illuminating [these are approximations, given me over the phone, but they are close to the real numbers]:
Surgery cost: $36,000
Discount negotiated by my insurance company: $31,000
Net cost to me (or, rather, my insurance company): $5,000
Portion of that cost covered by my insurance company: $4,200
Portion of that cost covered by me: $800
So if I hadn’t had insurance, I would have had no opportunity to negotiate a discount with the hospital, and I would have been billed the full $36,000. The average uninsured person, I would submit, would have a hard time coming up with $36K on short notice, but $5K would probably within the realm of possibility. Unfortunately they never get that option and instead face a choice between not getting the procedure and financial ruin.
So those least able to afford health care get charged the most. I think most people are aware of this dynamic, but I think it’s important to see exactly the scale of the difference we are talking about. In this real example, the uninsured are charged 7 times more than the insured. Supposing they can somehow manage to pay, they end up paying 40 times more out of pocket than the insured. The uninsured pay 8.5 times more than the insurance companies do for the same care.
How do you become uninsured? You lose your job, you have a pre-existing condition, you work for hourly wages, you work as an “independent contractor,” or dozens of other means.
This is just one reason why the health care system in America is broken.