About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (August 19, 2015)

handle is hein.crs/govccxv0001 and id is 1 raw text is: 01;0 riE SE ,-r. , . August 19, 2015 Price Transparency in the Private Health Insurance Market Unlike virtually all other services, consumers typically receive health care without knowing its price. Providers often do not disclose how much they charge, and consumers often receive pricing information only after the bill arrives. Even if a consumer seeks out information to make price comparisons, geographic variations and differences in quality of service make comparisons challenging. Prices may even vary based on who is paying the bill (health plans or consumers). Given the uncertainty around health care prices, there has been a push toward filling the price information gap through price transparency. Price transparency is the practice of making information on the price of health care services readily available. That information should be clear, relevant, and accessible to help consumers make informed decisions. The mystery surrounding health care prices stems partly from the multiple payers in the health care system (provider, health plan, and consumer). Each party has its own costs associated with health care services, and thus it is difficult to determine the dollar amount for health care services. Additionally, the price or costs (particularly to the consumer) of health care services may vary depending on who is paying as well as the consumer's insurance status (see Table 1). When a consumer obtains a health care service, the provider charges a certain dollar amount for services rendered. The applicable charges are then recorded on the claim that is submitted to the health insurance plan or the consumer. The charge is like the sticker price on a car; an amount that serves as a starting point for negotiation. Charges do not reflect the actual amount paid for health care services and are irrelevant for many consumers. The amount providers generally receive in payment is discounted from the charge. Health insurance plans contract with a wide range of providers. These providers accept the plan's negotiated payment in full for services to the plan's consumers; this group of providers is in-network. For insured consumers, the price is then divided into a portion paid by the health plan and a portion paid by the consumer. Insured consumers are often required to pay an amount for the health care services (i.e., cost sharing) via coinsurance or a co-payment. Because this is the amount insured consumers are required to pay out of pocket for health care services, it could be considered the most relevant dollar amount to the insured consumer. The amount insured individuals pay for health care services differs from what uninsured individuals pay (see Table 1). It is often assumed that uninsured individuals would pay full charges because they would not receive the discount that is negotiated by health plans. This may not always be the case. The charge may be adjusted for an uninsured individual's income and financial status, resulting in a lower cost for the consumer. For example, the individual may qualify for financial assistance or charity care. Additionally, consumers themselves may negotiate a discount from the charge and thus lower their costs. Key Terms Cost: The term's meaning can vary depending on the party incurring the expense-the consumer, provider, or health plan. For the consumer, cost is the amount payable out of pocket for health care services (i.e., cost sharing). For the provider, cost is the expense incurred to deliver services to consumers. For the health plan, cost is the amount payable to the provider for services rendered. Charge: The dollar amount a provider sets for services rendered before negotiating any discounts. Negotiated Payment: The maximum amount on which payment is based for covered health care services. The payment may be negotiated by the health plan or the consumer. In-Network: The facilities, providers, and suppliers a health plan has contracted with to provide health care services. Out-of-Network: The facilities, providers, and suppliers a health plan has not contracted with to provide healthcare services. Cost Sharing: Also referred to as out-of-pocket costs for the consumer. The amount an insured consumer pays for health care services according to the terms indicated in the health plan. A plan's cost-sharing requirements may include deductibles, coinsurance, and co-payments. Deductible: The amount an insured individual pays before his or her health insurance plan begins to pay for services. Coinsurance: The share of costs, figured in percentage form, an insured consumer pays for a health service. Co-payment: A fixed amount an insured consumer pays for a health service. .O 'T p\w -- , gnom goo mggm qq\ a , q 's I 11LULANJILiN,

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most