Ever since Vox.com put out a video on how hard it is to determine the cost of birth, I’ve found myself wanting to put my head on my desk numerous times per day. If you haven’t seen it yet, check it out:
Some people have pointed out that there are tools to help figure out how much a birth will cost, though it’s usually on a per state basis. Late last year, you may remember that I did a couple of extensive blog posts where I took a few hours to pull together the information for Twin Cities costs for births depending on the mode of delivery and the health of the baby.
The problem with that, though? It doesn’t even to start to take into account one tricky little layer: Each health insurer has different contractual allowances that ultimately determines how much you pay.
So, let me explain it this way:
- Louise has a procedure done. The provider bills her insurance $175 for it.
- Louise’s insurance has pre-set a rate of $90.47 for the maximum allowable fee arrangement for that specific procedure.
A few ways this could play out:
- Louise has yet to meet her deductible, so she has to pay $90.47 out of pocket to the provider for it.
- Louise HAS met her deductible, but she has to pay a co-pay amount. In this example, let’s say she has a $40 co-pay. She would pay the $40 to the provider, and the insurer would reimburse the provider $50.47.
- Louise’s insurance has a 30/70 split on all billed costs. Louise then pays $27.14 to the provider for the procedure, and the insurer would reimburse the provider for $63.33.
And this can go on and on and on in various permutations depending on all of the possible plan set ups. A different insurer could set that maximum allowable fee at a paltry $30.17. (Good for their shareholders, totally awful for the providers.) Can you see how it would start to be totally impossible to actually get an idea of what birth would cost?
Keep in mind, too, that everything done during birth can be turned into a billed procedure. There’s no way to anticipate what that might look like, because some hospitals will even bill you a couple buck PER TYLENOL.
This situation is really, really, complex and has a lot of nuance I don’t think anyone has tried to explain too hard. I’ve even tried my best to explain what the process of “taking insurance” looks like from the provider side, and that doesn’t even begin to scratch the surface of how awful and infuriating it is.
All this is to say that, yes, it is really complex. I have my own opinions of how US Health Care could be made less expensive and safer, but I also know it’s not as easy to unravel as anyone who talks about it thinks it should be.
Have I missed anything? Are you a health care smarty with something to add?