Some Hospitals Are Charging Uninsured Patients 1000 Percent More Than Insured Patients

It’s long been known that hospitals overcharge uninsured patients. That practice was made illegal under the Affordable Care Act but many hospitals seem to have not gotten that memo.

It seems that the hospital industry is a lot like the hotel and airline industries in that there is a set price (called the rack rate in hotel parlance and charge master in hospitals) but the vast majority of customers, except for very busy times, get discounts from that rate.

Since Medicare typically only pays a fraction of what a hospital charges, so hospitals try to make it up in other places. Insurance companies have negotiating power so they pay the second lowest rates and uninsured individuals, well, they’re basically screwed because they have no negotiating power.

The Affordable Care Act has a provision that requires that individuals are charged no more than the “amounts generally billed” to patients with insurance. However, that only applies to non-profit hospitals and it doesn’t take effect till next year. A study released on Monday shows that many hospitals are still overcharging uninsured people. They’re way overcharging uninsured people – by about 10 times.

You probably won’t be surprised to learn that all but one of the 50 worst offenders are for-profit and the largest chunk of them are in Florida.

Worse yet, many of these hospitals are in lower-income areas. At North Okaloosa Medical Center, for example, which is in the Florida Panhandle, patients are charged 12.6 times the actual cost. So, if a procedure costs $1,000, an uninsured person might pay $12,600.

Most of the hospitals belong to one of two corporations: Community Health Systems, which operates 25 hospitals and Hospital Corp of America, which operates 14.

Remember Mitt Romney’s Bain Capital? Well, they’re one of the two biggest investors in Hospital Corp of America. As for Community Health Systems, they’re in trouble with the state of New Mexico for allegedly making illegal donations to county governments to receive more matching funds from the federal government.

“They are price-gouging because they can,” said Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, co-author of the study in Health Affairs. “They are marking up the prices because no one is telling them they can’t.”

Source: Washington Post

It’s not just the uninsured that are getting screwed. If a hospital is out of network, you will likely pay exorbitant prices. Worker’s comp patients and patients being covered by auto insurance may experience the same thing. The average hospital “only” charges 340 percent more to uninsured people.

This problem completely debunks the entire free market philosophy and it makes not signing up for healthcare even more stupid. It is the free market that’s ripping people off and it’s the government and insurance companies that are protecting them.

Featured image via Pixabay.