Is paying cash instead of going through insurance for medical services a better option?

When someone asks you about health care, what are some of the things that come to mind? Besides waiting weeks or months for insurance approval, tons of paperwork, dealing with long lines, worries about preexisting conditions, lack of transparency between all the moving parts, high costs, patient information security worries, the list goes on. Oh, and finally, getting quality care is also on that list eventually. CashPriceMD is here to solve most of your problems at once.

Cash vs. Insurance

When you are choosing an insurance plan, there is a lot of work and research involved. Typically, either your employer or the government through the ACA gives you a few options to choose from, each with varying deductibles, monthly premiums, and what is covered. For most young, single, and in good health, the choice is relatively simple. Most will choose an option with a low monthly payment and a high deductible. However, for those who have had or are having some health issues, people with families, and older Americans, this can become a more complicated decision as there are more factors to decide from. Many people whose choice is not so simple are more likely to choose a higher monthly premium with lower deductibles and more coverage.

The more choices you have to make leads to decision fatigue. In fact, insurance providers count on that. Policies are made complicated with many factors involved in coverage in hopes that you will not bother to do a lot of research. There is hope you will make a choice based on limited information and never see the gaps in care that are included on purpose to limit expenses by the insurance company. A man shopping for their family can more easily overlook a woman’s needs and vice versa. So what happens when you need to use your insurance? It is not uncommon for something you thought would be covered is not covered, or the coverage amount is massively inadequate for your needs. Now, what do you do? This is where CashPriceMD comes in to help.

Consider self-paying for medical care.

When faced with medical care, people often automatically go to their insurance without giving it a second thought. However, even with insurance, paying cash instead of going through insurance may be a better option. There are several ways self-pay can be a better option than using insurance. Here are some reasons why self-pay is a better option than insurance:

  • High copayment: A significant problem with many routine services is the high deductible. There are many services where the deductible can be higher than cash-pay medical services. Even in cases where the deductible may be a bit higher, paying cash may still be to your benefit. For example, if the cash price for a routine visit is $70, but the deductible is $50. You can negotiate the same price with the doctor, who has less paperwork and bureaucracy. In addition, there are fewer forms for you to fill out. $20 may be worth not having to deal with the hassle of going through insurance.
  • No guessing on the final amount: Even when you think you know the cost of a visit, there can be unanticipated uninsured costs. This is especially true in an emergency. If you need stitches, a minor laceration can cost $100-200 when using self-pay. However, even with insurance and a low copay or deductible, you may wind up with an out-of-network doctor. Alternatively, the specific anesthetic used is not covered, leaving you with a bill of $1000 or more for the same service.
  • No late fees: When you have pre-negotiated discounts for cash-paying patients with a doctor, you either pay it on the spot or arrange payment plans. If you pay it early, there is no penalty. If you are a little late, they are much more understanding. Doctors want to help. Insurance companies want their money. Payment arrangements are much more straightforward when paying cash.
  • No out of network: One of the biggest surprises is getting hit by out-of-network costs. While a hospital you visit may be in-network, the actual doctor may not be. These things also change regularly. What was in-network last year may suddenly not be this year. When you self-pay, you know what you will pay, and not having to worry about any surprises is a big help.
  • See the doctor you want: Speaking of being out of network, when you pay cash, you see any doctor you want, when you want. No more having to check to see if they are in-network. No need to worry about traveling 30 minutes or more to go to the one doctor in the area who is covered for your specific situation. You visit who you want, when you want, and know what it will cost.
  • Have a choice in what care you get: Many insurers will only cover one type of service. Do you want birth control? Your policy may cover the pill or an IUD, but patches and implants are not. When you pay cash, you choose the method of care you want rather than having an insurance company choose for you. Insurance limitations can be especially dangerous when it comes to mental health care. When you are limited on covered medications, there may not be an effective medication available through your insurance. When paying cash instead of going through insurance, this is not an issue.
  • Discounts: Do you know often doctors are not only willing but more than happy to offer discounts to cash-paying patients? For many doctors, navigating medical billing can be a nightmare. Tons of billing codes change regularly, typos, staff to manage billing, mistakes that need correcting, etc. Insurance billing costs Americans about $496 billion on billing and insurance-related (BIR) costs. Who winds up paying for a lot of those costs? Doctors offices. Providers can discount these costs for the patients who do not have to submit a mountain of insurance paperwork to an assistant for processing and billing. Everyone is happier with less paperwork.
  • Faster and more efficient: When you self-pay, the process is simple. No need to check your policy, no need to find a provider, no need to fill out all the paperwork, and no need to wait for approvals and final bills to come in the mail. You show up where you want, when you want, pay for the service and go on with your life. This freedom is valuable. According to Carter Seuthe, CEO, Credit Summit, “One of the biggest benefits of self-paying for medical services is the reduced wait time. If you are trying to get help with something or get some kind of procedure, it can take days or even weeks for the medical provider to contact your insurance and for things to be approved. When you self-pay, you don’t have to wait as long and can get the help you need much faster.”
  • No paperwork: Almost all of your paperwork you need to fill out is for two reasons: New patient intake and ongoing insurance forms. When you pay cash, most of that paperwork is no longer necessary. Another benefit is that when you self-pay, you have more confidentiality. There is no need to sign waivers to have your confidential records shared. Your medical records are between you and your doctor, nobody else.

Comparison shopping

One thing that medical care consumers do not do enough of is comparison shopping. They show up with an insurance card, have an idea of the cost based on copay and deductibles, and get the treatment. If you think about it, this is a unique behavior. Imagine if you went to a grocery store and had to shop without prices and sometimes didn’t even know how much you paid until weeks later. That wouldn’t make much sense, would it? Yet, we do this all the time with our health and a long list of expenses for everything from the cost of using tissue paper to wipe your nose to medication given to you on-site to the cost of the doctor you see. A simple aspirin can cost up to $50, and people don’t ask.

When paying cash instead of going through insurance, comparison shopping is much more simple. With insurance, the prices are not very transparent, and the price for you is not the same as the price for the person in front of you or behind you in line. In addition, the cost of a standard procedure can vary by hospital by thousands of dollars with no guarantee of it being any better or worse of a quality than the other.

However, when paying cash instead of going through insurance, primarily through a marketplace such as CashPriceMD, comparison shopping is simple. You log in, enter your location and what services you need, and get a list of local doctors and how much they charge for providing your needs. You can then decide whether or not it is worth the hassle of dealing with your insurance or not. No more worrying if the same service for the exact doctor is covered. No mountain of paperwork unless it is sure to save you a lot. You choose the doctor you want, add the service to the cart, pay conveniently online, and schedule the appointment!

For those without insurance or a health savings account, the process is even more straightforward. There is no need to wonder or compare with your insurance provider. You just choose the option that best suits your needs and go.

Is it legal to self-pay when you have insurance?

That answer is ABSOLUTELY YES! These days, we see deductibles in the thousands. Network providers are required to file claims with the insurance carrier. However, providers also have an obligation to the patient to let them know what their options are. HIPAA and HITECH regulations allow patients to opt-out of filing their health insurance if they choose to pay in full. This option is what opened the door for health savings accounts. In 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA), which made these changes to HIPAA.

The ARRA made changes to the patient’s privacy policy regarding the patient’s protection of health information. You can now request that doctors restrict the use of your information for treatment and payment. You can now limit the disclosure to your insurance company if you decide to pay out of pocket in full.

Does health insurance save you money?

Health insurance is a $4 trillion a year industry. In 2020, annual premiums for health coverage for a family of four averaged $21,342. That is quite a lot of money. Additionally, Every year, 250,000 people still declare bankruptcy due to medical bills despite having health insurance. Even in times of COVID, if you are young, without a lot of money, but in pretty good health, you may be far better off going uninsured and paying for medical care as it is needed. People who have to live paycheck to paycheck do not have the luxury of forking out hundreds of dollars per month for insurance premiums. Or, perhaps you can afford a few hundred per month, but know you will be very unlikely to spend the thousands of dollars a year to recoup the cost. For people in the latter boat, there are also options.

  • FSA flex spending account: An FSA flex spending account is an excellent option for healthy people who often do not see a doctor. AnA FSA flex spending account is an option for people who have a high deductible plan. There are also tax advantages to an FSA flex spending account. Money deposited into an FSA flex spending account is not subject to federal income tax at the time. However, many of these plans require you to use the money at the end of the year. If you have unspent savings, you should consider using it for routine care.
  • Catastrophic Insurance: Catastrophic plans are only available to people under 30 or 30 and older who qualify for a hardship/affordability exemption. There are many ways to qualify for a hardship exemption, such as being a student at any age or the death of an income provider. If you meet this qualification, the cost of insurance is low, sometimes under $100. However, routine services are not in catastrophic insurance coverage. Unless you are facing a life-threatening situation, you will not be covered.

 

When you are looking at health care options, have little extra money, and are young and healthy, many are tempted to skip the insurance altogether. Alternatively, you may get a plan that costs as little as possible. Now, this means you will likely be paying quite a bit to see a doctor, whether you are insured or not. In either of these cases, paying cash for many essential services will usually be the best option.

Many health care providers will bill insurance companies more than they will bill you. There are a variety of reasons for this. When you pay in cash instead of going through insurance, the doctor gets the money right away most of the time. When they bill the insurance company, it can take months to get reimbursed. This is assuming there is not a billing issue causing the insurance company to deny the claim. In addition, health care providers pay tens of thousands per year processing insurance information. When people self-pay, they do not have all these added costs and risks; this is worth a discount. Often, the price billed to insurance can be 50% higher or more.

Insurance does not always offer the best outcome

Insurance companies are not the best people to decide what care is best for you. Health care insurance companies look at claims through the lens of a team of accountants and lawyers. Next, these people determine what health care options are best for their bottom line first and getting your care second. Of course, denying proper care that should be covered leaves the insurance company open to lawsuits. Insurance companies do not want that either, so what is best for you and what is best for the insurance company often align.

However, this is not always the case.

Insurance companies do not just look at what you need. Without even seeing you, they decide what is best for you with factors such as can this be done cheaper? Is the procedure or medication necessary? Can other medicines be used? Can we deny what the patient needs and offer a more cost-effective solution?

Insurance companies do not listen to the patient or doctor, they do not look at all of the information, and why medical professionals are a part of the decision-making process, they are not there. They can never know what is best for you by looking at reports and statistics. Like many things in life, the people who know what is best are usually the people who are there, doing the work. That is you and your doctor.
When an insurance company steps in the middle of you and your doctor, they decide what is best for you, not the doctor. And once you use insurance, they become the ultimate decider of your fate, not you or your doctor. When you use cash-pay medical services, that decision is entirely up to you and your doctor to decide what is best, not what they can get insurance to sign off.

When is cash a better option?

Does health insurance actually save you money? If you have no insurance, paying cash is your only option in most cases. However, even if you have insurance, you may be better off opting to pay cash instead.

Frequently, cash can be a better option for all or part of a medical visit. “You can potentially save money when self-paying for some medical services. Diagnostic treatments, such as CAT scans, X-rays, and ultrasounds, generally have lower prices for cash payers. Still, lab work, prescription medications, out-patient operations, and therapeutic services, such as occupational therapy, can also have lower fees for cash payers”, says Imani Francies at Life Insurance Post.
In fact, according to Eric Finger, the owner and managing therapist of Move Empower, Cash is the only way they can effectively operate. “To remain profitable, the typical outpatient physical therapist treats 2-3 patients an hour. The therapist can dedicate maybe 15 minutes of one-on-one time to you. The remaining 45 minutes likely include passive treatments such as hot packs or electrostimulation and exercises guided by a technician. With declining reimbursements, this high-volume approach is the only way for clinics to remain profitable”, Finger said. If you have a relatively high deductible, even more procedures may be more affordable by paying cash. If surgery is not needed, even a broken bone can get away with paying $2-3,000. Still, with insurance, the same procedure can cost $10,000 or more. With a high deductible in the thousands, cash may still be a better option.

Compare prices beforehand. Ask yourself: “does health insurance actually save you money?” If you know what you need to do, call your insurance company and determine what your out-of-pocket cost would be. Next, head to our exchange and look up what the cash price is for the same procedure. You can then make the best decision for you on whether or not to deal with the hassle of going through insurance.

Additionally, with prescription drug programs like GoodRX, there may also be coupons or special programs making paying cash for medicines cheaper than going through insurance.

Sometimes, self-pay is just a no-brainer. Not having insurance at all is certainly one of these. If you have not used your health savings account all year and have thousands of dollars in there that need to be used, now is the time to pay cash for an annual checkup. The same goes with high deductible plans. If you are going for a checkup, but your deductible is thousands of dollars, there is no point in filling out all that paperwork and going through the whole process if your insurance will not cover any of it. Another is if you are looking to get some information from the doctor and need a routine, minor visit, for example, to get on birth control. This type of consultation can take minutes and some doctors will charge far less in cash than even the more generous copays.

Finally, your insurance company will not be able to meet your needs. Davait Dholakia, VP of Operations at Essenvia says “Paying out-of-pocket for medical services ensures that you can choose the doctor and the treatment that is 100% right for you. Insurance ties you to a network of doctors and will only approve certain treatments/procedures. So there is definite freedom that comes with paying for your medical services yourself”. This happens when you want medical care not covered by your insurance. Lack of coverage is especially true when seeking complementary or alternative medical treatments your insurance does not cover.

Which is right for you?

Ultimately, that is up to you to decide. However, you are the one who has to live with your own medical decisions. It has been proven that most of the time, paying in cash and skipping insurance altogether is the best option. A wise person would always consider their options and be a smart shopper. Click here to check out cash prices at CashPriceMD. Nobody can make that decision but yourself. However, an informed patient is a wise patient. It is always best to look at your options before deciding how to pay for your medical care. Even if you think It will cost more paying cash instead of going through insurance, it is always wise to look first, then decide.