The Biggest Hidden Benefit of Health Insurance
An ACA-compliant health insurance plan covers most health-related expenses that you could come up against, sparing you from high medical bills in the event of an injury or illness, not to mention the expense of routine care. However, even before you hit your annual deductible, your health insurance saves you a significant amount of money. Because of negotiated rates, when you use a network provider, you may pay substantially less for care than someone who doesn’t have health insurance coverage before the deductible has been met.
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What Is a Negotiated Rate?
The majority of health insurance companies have a contract with a network of hospitals and other providers. In this contract, there are negotiated rates for different services. This negotiated rate is generally lower, sometimes significantly lower, than what a provider would charge someone who is paying out of pocket. For example, a hospital may charge an uninsured person $2,000 for a CT scan. However, a health insurance provider may have a negotiated rate of, say $500 for a CT scan for their insured members. The actual amount varies.
This practice makes sense for health insurance companies because it allows them to save money on their covered services, enabling them to provide more competitive rates to their customers. However, negotiated rates also benefit hospitals and other healthcare providers because they are almost guaranteed business from that insurer’s customer base, because most people choose a provider in their health insurance network, and large insurance companies have thousands of customers.
Different Health Insurance Company, Different Negotiated Rate
Negotiated rates vary from one health insurance company to another. Larger health insurance companies tend to have lower negotiated rates, as their large customer base gives them more leverage. If you switch to a different health insurance company, you may notice a difference in the price that you pay for the same health services. This may be partly due to a difference in coinsurance structure, but it’s likely that it’s also due to a difference in negotiated rates. In fact, negotiated rates can reduce out of pocket expenses sometimes by 60-70% or so, a reduction of hundreds or even thousands of dollars. Of course, this depends on the procedure, and the insurance company, comparing the same procedure at the same hospital without an insurance plan (with negotiated rates).
Getting the Most Affordable Care with Nevada Insurance Enrollment
Even if you don’t hit your deductible during the year, you can see significant cost savings just by being enrolled in a health insurance plan. Because you’ll pay out-of-pocket costs for a given procedure, these variations in negotiated rates have a significant impact on the value of a health insurance plan. In addition to researching whether the services at a hospital are priced high or low, you should also consider a health insurance company’s ability to negotiate for you on your behalf.
Unfortunately, it can be very difficult to compare negotiated rates for different plans. Rates vary from one provider to another, meaning that your health insurance company may pay Hospital A $350 for that CT scan but Hospital B $500. That would depend on their contract with one another.
At Nevada Insurance Enrollment, our health insurance agents help you compare insurance plans and can help ensure that you get the best value for your money.