If you’re one of the growing number of Americans without health insurance, you are billed top dollar for hospital care.
Now, for the first time, a study purports to show just how costly that is -- although hospital groups immediately took issue with the findings.
Uninsured patients on average are billed 2 1/2 times more than what the insured are billed through their health plans, and more than three times what is billed to patients through Medicare, according to the study appearing today in the journal Health Affairs.
In effect, the uninsured are billed at full price, while health plans and Medicare receive deep discounts.
Hospitals might charge $12,500 for an appendectomy, for example, but collect only $5,000 from a health insurance plan. Members of the plan actually pay a lot less, through nominal co-pays or deductibles.
Health plans can negotiate such discounts because they can direct a large number of patients to certain hospitals by making them part of their provider network.
Uninsured patients do not have such leverage and may face full hospital prices.
As a consequence, uninsured patients who are billed full prices are left with exorbitant hospital bills that are impossible to pay, said Gerard F. Anderson, author of the study and a healthcare researcher at Johns Hopkins University.
“Hospitals shouldn’t be charging three times” Medicare rates, Anderson said, “especially from poor people who are uninsured.”
Hospital groups immediately criticized the study -- which was based on 2004 data, the most recent available -- as being outdated.
Since 2004, hospitals have provided billions of dollars in free and discounted care for the uninsured and have changed their billing practices to lighten the burden on the uninsured, said Jan Emerson, a spokeswoman for the California Hospital Assn., a trade group.
In California, a law that went into effect this year requires hospitals to offer discounts to uninsured patients who earn as much as 350% of the federal poverty income level, about $70,000 for a family of four.
Some hospitals, Emerson said, offer discounts as much as 20% off full prices to uninsured patients regardless of income level.
But most states do not mandate discounts and the American Hospital Assn., for example, suggests that hospitals voluntarily offer discounts to uninsured patients who earn between 100% and 200% of the federal poverty line.
That leaves millions of uninsured patients still facing full hospital prices, said Anderson and others.
According to the Kaiser Family Foundation, a research institute, about 15% of the nation’s 45 million uninsured earn above 350% of the federal poverty income level, meaning they make too much to qualify for hospital discounts in many cases. But they are also too poor to afford health insurance.
“The solution is for people to be covered under health insurance,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.
“At the end of the day, if you can’t afford insurance, you can’t afford the discounted rates either.”
What hospitals charge uninsured patients has been a contentious issue for years. Hospitals around the country have faced lawsuits, alleging price gouging and aggressive collection methods.
Last year, two California-based hospital systems, Sutter Health and Catholic Healthcare West, paid hundred of millions of dollars to settle lawsuits charging they gouged uninsured patients.
Sutter now offers discounts to all uninsured patients, the amounts depending on their incomes.
“No uninsured patient is billed at full hospital rates,” said Karen Garner, a Sutter spokeswoman. “We’re pleased to do our part in offering some relief and peace of mind for patients who earn too much to qualify for government-subsidized healthcare or charity care, but who still aren’t covered by health insurance.”
Why hospitals have full price rates to begin with is the result of a Byzantine pricing system that is as much a result of the country’s broken healthcare system as the hospitals’ billing practices, said Emerson of the California Hospital Assn. Hospitals in large part have borne the brunt of caring for the country’s uninsured population with uncompensated care in their emergency rooms and by writing off what uninsured patients are unable to pay.
The full price rates, which in part give the starting point in negotiations with private insurers, have risen to make up for some of those losses.
Meanwhile, Medicare, which used to pay based on full price rates, has switched to a system based on typical hospital costs, decreasing profit margins, Emerson said.
“There is no relationship between what is charged, the actual cost of care and what hospitals get reimbursed,” she said. “But we are doing our share. It is unfair to expect hospitals to provide care and also fix the system.”