States should cap rates for the uninsured
Hospitals have a “Chargemaster rate” for procedures. This is like the “sticker price” on a car (MSRP). These rates are often vastly inflated and are not reflective of what insurer’s or most patients actually pay. Like restaurants, prices for the exact same procedure can vary greatly from hospital to hospital.
So, why are the chargemaster rates so high if no one pays these?
- maximize the starting point for negotiations with insurers
- little to no regulation – they can do what they want
- uninsured people DO have to pay these rates
If you go to get a knee replacement, the chargemaster rate for this procedure might be $50k. If you have health insurance AND go to an “in-network” provider, your insurance has already negotiated rates with this hospital. Maybe the rate they’ve negotiated is $25k. The insurance ends up paying most of this to the hospital, while you pay up to whatever your deductible was.
Cap the Rates!
The Problem with Chargemaster rates
Chargemaster rates are a clear unfair advantage for the insurance companies. If you don’t have insurance you are going to get a bill for $50k, but if you have insurance your insurance company is only getting charged $25k by the hospital. Two very different prices for literally the exact same thing. This SHOULD be illegal.
The fair thing to do would be to have a policy in place that says that hospitals can’t charge uninsured patients more than the average negotiated rate they accept from insurance companies for the same procedures.
To make it easier, just cap the prices at Medicare rates. Meaning hospitals can’t charge more for a procedure to an uninsured patient than they can for a Medicare patient.
Why hasn’t anyone done anything about this?
Any state could pass a law tomorrow limiting the amount hospitals can charge the uninsured. But to this day, no state has. Mass, Vermont, Cali … why the hell haven’t you done this??
Why hell aren’t more senators talking about this?
California and NY have done something like this but only for low-income people. This is not good enough. Middle-income people go bankrupt every day from INSANE medical bills.
Hospitals set the Chargemaster rates extremely high – knowing no one with insurance will pay this rate. They simply want to start the bargaining process with a high bar. People with health insurance – whether it be private or medicare/medicaid pay half or less than half this rate.
Why are people without insurance forced to pay this exorbitant rate??
Liberal States are liberal in name only
Something that really makes me mad is when people/entities virtue signal, but do nothing to address REAL problems.
California is a great example of this. California is easily one of the most liberal states in America, but …
- public education sucks
- hospitals can charge middle-income people whatever they want
- homeless have taken over parks and public infrastructure
How is that caring for the masses??
Governor Newsom of California constantly brags about banning new gas car sales by 2035. Ok sure maybe that could be good to do in the future – but going bankrupt on account of massive medical bills is a much bigger problem for most people.
Governor Healy of Mass brags about gender-affirming care in Mass while uninsured middle-income people declare bankruptcy over insane medical bills. How about you do something that would tangibly affect the daily lives of your citizens?
Cap the rates … tomorrow
When I learned about the difference the uninsured are charged vs the insured vs medicare vs medicaid, I was honestly shocked.
A common argument you’ll hear is … why don’t these people just get insurance??
For one, it’s too expensive.
Two, even if these uninsured are charged the medicare rates by hospitals, they’ll still be paying WAY more for service. As an example, people on Medicare have an annual deductible of $240 in 2024. Meaning if their bill is $2,000 from the Doctor visit, they pay $240. (not including coinsurance here for complexity sake)
The uninsured person would still be on the hook for $2,000. The only thing we’d be shielding them from is the insane ~$6,000 chargemaster price. (the average chargemaster price is 3x to 5x the Medicare price)
Let’s do something about this – which state will make it happen first? Vermont, Mass, Minnesota, Cali … I’m calling you out.
Sam