Hacker News Reader

Comment by httpz | Hacker News Reader

I once got a blood test in California. Nothing special, just a regular checkup recommended by my doctor. The blood testing company later sent me the bill. It was originally $950 and some pre-arranged deal between my health insurance and the testing company discounted most of it. My insurance covered part of the rest and I paid like $50. It's not like my insurance paid $900, they just had a pre-arranged deal with the testing company to have a huge discount, which makes me think the actual cost of the blood test is nowhere near $950. If I didn't have insurance I still would've had to pay the whole $950 out of my pocket.

View on HN

> It's not like my insurance paid $900, they just had a pre-arranged deal with the testing company to have a huge discount, which makes me think the actual cost of the blood test is nowhere near $950. If I didn't have insurance I still would've had to pay the whole $950 out of my pocket.

How on earth is this type of pricing legal?

It's legal because when you tell people you know that this has happened to you - unless it happened to them personally as well, they will just assume that you don't know what you're talking about or confused.

And so this practice thrives.

Because whackamole. There's no ruleset that is foolproof. Every time some loophole or exploit is closed, two more pop up.

What's coinsurance? ACA regulates copays, deductibles, and so forth. Ah, but no one said anything about coinsurance. It's totally not a copay, premium, or deductible. See? It's different.

Surprise billing is how hospitals pushed back against insurers. Consolidate and then outsource all actual work, so the hospitals no longer get stuck with the bill. Oh, that specialist you saw in our hospital? Ya, she has nothing to do with us. Ya, you should have asked your insurer if her office has an arrangement (collusion).

This scheme is legal based on a custom of quantity price discount. The insurance company negotiates a price schedule with healthcare provider and if you buy their policy, you will get the discount. It is analogous to purchasing from a retailer where the price is the same for all customers vs. buying a large quantity from the distributor and paying much less per unit.

This mechanism may be a foundation of legality of health industry pricing practices, but it is grossly abused. Contrary to what is advertised, U.S. health care is not a free market. The pricing is made opaque by insurance industry and other middle man. This is the main reason why price gauging of that magnitude is possible. It is a cash cow that just keeps on giving and trying to change that will be extremely difficult.

It's hard to civilly sue for attempted fraud, because there are no damages. And when the fraud is successful, the victims are none the wiser. As why there's no criminal prosecution, it's because money generally buys immunity.

Reply on news.ycombinator.com