Folks, it is your health insurance plan’s job to negotiate the lowest possible reimbursement rates with your health care providers. I get that you think they’re wonderful, but that doesn’t mean they deserve a blank check with your signature at the bottom!
And yes — that is your signature on that check. Because those reimbursements are funded through the premiums that you (and in many cases your employer) pay. Higher reimbursements equal higher premiums. The math on that is actually pretty simple.
By Federal Law, your health insurer has a restricted profit margin. They are not allowed to set rates for unlimited profits. And they don’t, not from altruism, but because the fines and penalties are high enough to get their attention. (That’s the part of the ACA you don’t hear about very often.)
We can quibble about the profit margin (it’s currently in the 10% range, as compared to the 40-50% profit margin that is normal in car insurance) and the actual dollar figures that they represent. And I’m not saying insurance isn’t part of the problem because it is.
But it’s not the only part. Everyone helped create this mess, including insurers, medical providers, the government, and consumers. That means you! (Yes, me too; I’ll admit it, and I have changed some of my behaviors accordingly.)
What are you doing to be a good steward of your own health care dollars?
Your insurance company can answer that question: they engage in provider network negotiations with the aim of getting the best “bang for your buck” when it comes to the cost of medical care. And when you blame them for doing the job you pay them to do — particularly when you’re not doing anything yourself…well, let’s just say the cognitive dissonance baffles.
N.B. There is no Federal law restricting profit margins on hospitals and medical providers, and the penalties for failure to post pricing schedules are drops in most hospitals’ financial buckets.
Also, yes I know a lot of health professionals are badly underpaid, but the hospital systems and providers’ offices decide how to allocate their reimbursement dollars. Not the insurance carriers. Consider that for a moment, particularly in light of that blank check I mention above.