How can healthcare costs be compared?
Healthcare costs can be compared depending on insurance status. Insured patients are likely to spend less on a wide range of healthcare services because their insurance companies pay for their costs.
What does it mean that the cost (charges) for a service can be less for a person who has insurance than the cost for that same service would be for a person without insurance?
A person without health insurance will have to pay for his health costs out of his pocket. On the other hand, those with insurance covers have their costs paid by the insurance companies. Mack (2014) explained that the insurance companies do not pay the listed charges of healthcare services (which are usually expensive). Instead, they negotiate to pay for low prices, and that’s why an insured person is most likely to pay less than the uninsured person would pay for the same service.
What happens to people who do not have insurance?
Notably, the people who do not have insurance are most likely to for health care services out of their own pockets. An out-of-pocket payment plan can be more costly when compared to an insurance coverage plan. However, the payment weight on the people who do not have insurance is not as heavy as believed. Many are the times that their costs are paid through philanthropic practices, where well-wishers pay for the services (Institute of Medicine (US), 2003). Alternatively, they receive services from health institutions for free or at reduced charges depending on the organization’s policies. The government also plays an important role in catering for people who do not have insurance (Institute of Medicine (US), 2003). It set laws that reduce the burden of costly medical services. An excellent example is the Affordable Care Act (ACA) that controls the fee-for-service model by ensuring that healthcare service providers do not overcharge. The fee-for-service allows the healthcare workers to be paid based on the number of services they provide. The government intervenes to ensure that people who do not have insurance are not overcharged. Despite these interventions, a person without insurance is most likely to utilize fewer services than a person with insurance (Institute of Medicine (US), 2003). Insurance makes healthcare services available regardless of their costliness. Thus, an insured person can access many services he wants because he does not pay for the costs.
References
Institute of Medicine (US). (2003). Hidden Costs, Values Lost: Uninsurance in America. Washington (DC): National Academies Press.
Mack, S. (2014, November 15). They paid how much? How negotiated deals hide health care’s cost. NPR. https://www.npr.org/sections/health-shots/2014/11/1/364064088/they-paid-how-much-how-negotiated-deals-hide-health-cares-cost
