Soaking the poor…

Health Affairs’ new issue, today, contains an excellent examination of hospital overcharging practices nationwide. (The study is summarized in these LA Times and SF Chronicle articles).

Essentially, it confirms what we advocates already knew: that hospital are routinely charging uninsured patients at least 2.5 times what Medicare and insurance companies pay for the same exact procedures.

In California, it’s worse, with hospitals charging 4 times what Medicare allows, making it the third most egregious state in hospital overcharging. The results are similar to a Health Access investigation in 2004 called “Your Money or Your Health”, that examined one hospital chain’s pricing practices by looking at bankruptcy records.

What really blows is this: When the hospitals increase what they “charge” it means that insurers can negotiate bigger discounts — so insurers aren’t paying higher rates.

“When the hospital increases its charges,…only self-pay (uninsured or
underinsured) patients are expected to pay the higher charges.”

And really, if someone is uninsured, it’s most likely because they can’t afford insurance in the first place. So how on earth could they afford the highest rates? The study finds that the collection rate from the uninsured is only about 10 percent.

Basically, this practice just means huge amounts of stress for patients who must deal with their illnesses, bills, and aggressive, name-calling debt collectors banging on their doors.

Now, the Health Affairs study looks at 2004 rates. That’s two years before California passed AB774(Chan), sponsored by Health Access California, which took effect on January 1 of this year. It prevents this sort of overcharging for patients who are underinsured or earn less than 350% of poverty ($35,735 for an individual). Things should be a bit better for uninsured and underinsured patients now, as Anthony said in the SF Chronicle article:

“The ER visit that might have cost thousands of dollars may now cost several
hundred or a thousand dollars, which is still a lot of money, especially for
lower-income patient,” he said. “But the patient at least has a fighting chance
to pay.”

Health Access California promotes quality, affordable health care for all Californians.
Medical Debt

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