Without giving exact numbers, the hospital billed my insurance company approximately $171k for my surgery and stays. The insurance company paid just about $24k of that. There is also a line that states adjustments for approximately $146k. If you look up hospital adjustment online it states,
“Adjustment” refers to the portion of your bill that your hospital or doctor has agreed not to charge you.Now, I understand that insurance companies get discounts for bringing in large populations of folks. However, my insurance company paid basically 15% of what the hospital charged. I wonder how many folks without insurance or with worse insurance than mine could possibly get the hospital even close to that value.
The fact that most people probably don't know this is even more incredible. When I hear of doctors not wanting to take ACA or medicaid/medi-cal or some other non-premium insurance, I just have to laugh, because the premium insurance companies are definitely not paying full price, let alone wholesale prices.
UPDATE: Another issue with this is the way co-pays are calculated. Luckily, my insurance is a flat fee co-pay for a hospital stay. However, if I had a percentage based co-pay, my co-pay would have been calculated based upon the original hospital bill of $171k. Therefore, I would have been liable for 10-20% of that bill up to my out of pocket maximum, while the insurance company knew it would be paying the lower fee.
Either the insurance company is paying less than even $24k for the surgery if my co-pay is calculated based upon a percentage of the $171k. Or the hospital is getting more money because they can take the $24k the insurance company agreed to plus my co-pay. Either way, there is no incentive for either the hospital or the insurance company to bill the patient correctly and the patient gets screwed. The higher the hospital makes the bill, no matter what they've negotiated with the insurance company, the more money comes out of the patients pocket while the insurance company possibly reduces what they are paying the hospital or the hospital brings in more money and the patient gets screwed.