Increasingly Americans are paying higher and higher co-pays and deductibles on their health insurance. According to the Kaiser Family Foundation, 41% of Americans who receive health care coverage through their work have deductibles of at least $1,000, up from 10 % in 2006. And for 7 million new enrollees in Obamacare plans, the average deductible in the most popular “silver” tier of coverage is $2,267.
Higher deductibles can be quite appealing to those with choices among health plans, as they generally have lower premiums than low-deductible plans. That’s fine when you don’t get sick or need coverage. However, with fewer than half of American households having three months worth of expenses in savings, these larger deductibles can quickly lead to financial crises. The situation is compounded by the complicated nature of insurance language: Only 14 percent of insured adults correctly understand insurance jargon such as deductibles, coinsurance, copays, and out-of-pocket maximums, according to a 2013 study published in the Journal of Health Economics.
To deal with this, hospitals are more and more frequently asking patients for payment up front. The figures, as with any numbers related to US health care expense, are astronomical: hospitals’ total cost of uncompensated care reached $46 billion in 2012.
This can actually be good news for patients: some hospitals offer discounts for paying early. Making payment arrangements is not exactly foremost on someone’s mind as they are facing hospitalization, but pre-negotiating a payment schedule sometimes allows for a lower or no interest rate and allows patients to avoid sliding into debt. For hospitals, identifying those with payment challenges can help, says Richard Gundling of the Healthcare Financial Management Association. “For both the patient and the facility,” he says, “trying to collect a debt that can’t be paid just wastes everybody’s time.”
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