The One Thing People With Health Insurance Forget to Do

Wednesday marked the sixth anniversary of the Patient Protection and Affordable Care Act — commonly known as Obamacare — being signed into law, and the battle over its various elements continues to be waged as vigorously as ever.

Perhaps one of the biggest points of contention is the so-called individual mandate, which stipulates that most Americans have qualifying healthcare coverage in place or pay a fee for the period they are uninsured.

Some view the mandate as a yet another example of a meddlesome federal government interfering in a personal decision. Others are grateful for coverage they would otherwise be unable to afford. And while the individual mandate is viewed by many as the motivating reason for obtaining this insurance in the first place, there is another important consideration to take into account.

Healthcare is like any other business: After all is said and done, providers need to collect enough revenues to make it possible to continue doing what they’re doing.

Healthcare is also complicated in that there is surfeit of procedures with costs that require quantifying and prices that are often individually negotiated between providers and payers.

Therein lies the rub: The extent to which a payer—you, me, insurance companies, employers, the government—is able to bargain down that price to an acceptable level.

As you might expect, providers don’t always readily share that information among patients and their intermediaries. Nevertheless, the fact that these discounts—which are known as contractual allowances (the difference between what a provider bills and the sum it’s willing to accept in full payment)—is as important a reason as any to have insurance, as the following personal experience will illustrate.

A little more than a month ago, my wife underwent some testing on an outpatient basis in a hospital setting. Although the medical center typically charges $3,700 for the procedure, its billing department applied a $1,700 “insurance adjustment” against that amount—presumably in keeping with the pricing agreement the institution and our insurer have in place for the current year—and billed us for the difference (because we hadn’t yet met our plan’s annual deductible).

This wasn’t a singular occurrence. Every one of the healthcare-related invoices we receive is adjusted to take into account the discounted prices our insurance carrier has successfully negotiated with each of our healthcare providers.

When the statement arrived in the mail, I called the hospital’s billing department to arrange for payment. Sure, I could have done this online or snail-mailed a check, but I decided a sizeable bill warranted a conversation.

The billing clerk was nice enough. After we talked a bit about the charge and the insurance adjustment, he politely asked how much I was in a position to pay at this time.

That set me to thinking.

So, with equal politeness, I responded by asking if he was in a position to give me a reason to pay my bill in full, then and there.

As it turns out, he gave me 400 good ones—a 20% discount on my $2,000 balance.

My little story has two takeaways: Complain all you like about a healthcare system that charges different prices to different payers or a law that some consumers and businesses view as unfair. Until either or both of these conditions change, the best course of action is to use one against the other: the discounts your insurance carrier has negotiated versus the charges your healthcare providers would otherwise bill.

And one more thing

Don’t forget to attempt a little bargaining of your own.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.