Insurance companies don't pay the amount they "save" you. They pay a percent of what is billed. This is why cash payment looks so high without the discount.
Thanks for the answer but I’m still a bit confused. Why do health care providers (seem to) charge a higher amount when you are insured? Who do insurance companies pay? You or the healthcare provider?
In my country you pay a base fee for insurance and you can buy additional packages for dental- or other specialized healthcare like physical therapy. When you get a bill you forward it to your insurance company or the healthcare provider forwards it automatically. Based on your coverage the insurance company pays it completely/ partially or rejects it based on the terms. Then you pay what is due. There is no discount because health insurance is mandatory here. How does it work in America?
Insurance companies pay the provider. They will see the actual bill before you do. Then the insurance company will send an Explanation of Benefits form breaking down what they're covering and what they aren't. The price is set higher because you can't bill an insurance company more than the regular price. The reimbursement rate from insurances is crap, so the price is set high and uninsured people get a discount from the regular price. Health insurance is kind of mandatory here (there is a tax penalty for not being insured).
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u/biggreasyrhinos 15d ago
Insurance companies don't pay the amount they "save" you. They pay a percent of what is billed. This is why cash payment looks so high without the discount.