Health insurance is a privilege, but not everyone is so lucky. Even if you have a health plan, you may still get a better deal paying out-of-pocket for routine care. For those who don’t have insurance and need to navigate self-pay medicine, this episode is for them.
Since 2014, patients have been able to sign up for health plans via the Affordable Care Act (ACA), and the overall number of uninsured Americans fell. However, US adults without insurance remain persistent at between 10-11% the population. Analysis from the Kaiser Family Foundation also covers the reasons uninsured people claim to not be on a health plan. Around 74% of the sample note they’re uninsured because they can’t afford a policy to begin with. Beyond that, ~41% of uninsured adults disclosed the choice to decline seeing a healthcare professional because of their status. Even stranger, ~25% of respondents said they’re uninsured because they have no eligibility for insurance via employment, and ~21% noted that insurance wasn’t necessary or desired to begin with. The distribution of choices here is uneven because respondents were able to pick from multiple choices applying to them. I’ll have the related figures showing these stats on my Substack post at rushinagalla.substack.com. Regardless of how you feel about insurance paying or not paying for routine medical work, getting emergency coverage is critical given how quickly charges can stack up at the hospital. That’s why part of this episode’s purpose is to help with managing a cash-pay approach until you are ready to grab that chance to get a proper health plan.
So, what can you do if you’re uninsured and it wasn’t by choice? Being upfront about having no coverage is a good start. Whether you’re in contact with a regular clinic or hospital, mention that you are self-pay while transitioning to asking what cash discounts there are. Reasonable savings to ask for when paying cash are between 20% to 30%. To better focus that discussion, ask for a fee range associated with an office visit or whatever particular service you have in mind. But why would a doctor’s office give discounts for cash payment? Providers are willing to offer a cash discount if they save the marginal administrative costs from billing insurance. Check if a clinic does interest-free payments or gives benefits for paying in advance. You can also call around to multiple clinics to shop prices if you have no urgent medical need at the moment. However, depending on where you live, it can be sometimes overwhelming to pick a medical office or doctor especially with added stress from not having coverage. In that case, reach out to your state’s local insurance department to ask about charity care, community health clinics, and local Medicaid eligibility. Community health clinics are non-profit centers that do routine care—think physical exams, vaccines and preventative care, and women’s health—for a reduced cost or no cost. Walk-in clinics and some urgent care facilities may give discounts for self-pay patients if asked. In a worst-case scenario, the emergency room is an option that cannot turn any patients away, but of course it’s best to pursue the ER only if needed. Regardless of the final costs, using cash for healthcare gives you more choices for whatever provider or health system you wish to seek because you’re not limited by an insurance network.
Your health plan is probably not cheap for you or your employer. The insurance company eHealth assessed the ACA’s health plan trends from its first open enrollment in 2014 through 2020. Though most Americans get their insurance privately through work, the costs of buying insurance directly from a marketplace are a reasonable point of reference. The math is not pretty. According to eHealth’s analysis, 2020 average monthly premiums—meaning the amount you pay for the right to have insurance—were ~$456 per month for individuals and $1,152 per month for families, up 68% and 72%, respectively, since 2014. On top of that, average deductibles—the amount you have to pay out of pocket before coverage kicks in—were ~$4,364 per year with individuals and $8,439 per year with families. These levels suggest that your total annual cost of using marketplace health insurance would range from ~$9,836 to $22,263. The real all-in cost is higher still because these expenses would come before any copays or coinsurance. This is why you should consider, based on your current health needs so far, if such a price makes sense. For example, if you happen to be someone who eats well, sleeps enough, moves enough, takes very few medications, and sees a primary doctor maybe twice a year max for preventative care, you’d probably get a better deal paying for routine care with cash versus insurance. What’s the tradeoff? According to Solv Health’s pricing tools, the national average office visit cash price at a hospital is ~$300 with the full range being $180 to $675. With the top of that range you are paying just over $1,300 cash for two office visits. If those two appointments were billed instead through your insurance, your final invoice amount would likely be higher because of the deductibles in play and the markups providers add to their charges to create margins after insurance discounts, operating costs, etc. Note that your pharmacy benefits for prescription drugs are separate from medical services.
Make no mistake: I am not suggesting that you discard health plans on purpose. If, instead, you happen to be dealing with various chronic issues, quality-of-life conditions, or have an occupation involving risk of bodily harm, coverage makes perfect sense because there is a high volume of complex medical work to be done. The more critical takeaway to make is that insurance and self-pay don’t need to be mutually exclusive. Even if you have insurance to begin with, taking a self-pay approach for routine care may save you money. However, following a proper cash-pay approach regardless of being insured, under-insured, or uninsured, depends on how you answer three specific questions. What care do you need (routine preventative care, unusual specialist work)? Will you max-out a deductible or get close? How confident are you of not having a big-ticket service or procedure this year? If your answers to those questions suggest that you will probably spend less on medical care than whatever your all-in yearly health plan cost is, then it’s worth contacting local offices to learn the cash prices for routine services like physicals, blood draws, simple imaging techniques, and local outpatient procedures. With all this guidance in mind, patients can trade cash for vigilant but lower-cost preventative care while using health plans as a proper fallback.
The tolerance for emergency and general risk is where you draw the line for using cash versus insurance. Another major factor to know is that paying for medical care with cash usually doesn’t count towards your annual deductible. You can still call your insurance company, ask what the max allowable charge and ranges are for a given aforementioned service, then compare that amount with cash quotes from shopping around for care. It’s also worth noting that due to various price transparency laws passed between 2020 and 2022, hospitals legally have to disclose cash prices and good-faith estimates when asked—be persistent but polite in your search for prices. During your negotiation, using healthcarebluebook.com and solvhealth.com are helpful resources to get an idea of cash prices in certain regions. On the prescription side, goodrx.com is helpful as well for self-pay clarity. If any of you readers and listeners know about other helpful tips for self-pay patients, you’re welcome to comment on my Substack post or Friendly Neighborhood Patient’s YouTube channel.
Alternatives to health insurance besides paying cash do exist, but that will be a theme for another day. Instead, the next episode focuses on the insights for why doctors and hospitals charge what they charge and where the cash-pay numbers come from. Subscribe and stay tuned to Friendly Neighborhood Patient for more on medicine and money. I’ll catch you at the next episode.
