Paying Medical Fees Before Seeing the Doctor

A drastic change in the amount individuals pay for health insurance deductibles has led to changes in how medical providers bill patients for common procedures.

“The prepayment trend is happening because hospitals are being stuck with big unpaid bills,” says Consumer Reports Senior Editor Donna Rosato. She explains that it’s higher deductibles in the health insurance industry prompting the change.

Twenty years ago, in 1999, the average annual deductible for health insurance was $250. A family of four paid an average of $490 in monthly premiums.

Ten years later, the cost for that family’s monthly health insurance premium had ballooned to $1,115 while their deductible had more than doubled.

Ten years later, today, the cost for that family’s health insurance premium is $1,634 a month, and their deductible has grown from $1,000 to $5,547. That'smore than a five-fold increase.

That move to high-deductible health insurance policies, from 11.4% in 2006 to 46.5% in 2016, has left more and more health care providers holding the bag of unpaid fees, prompting payment in advance requests when possible. In 2002 hospitals got 10% of their revenue directly from patients. Today the figure is up to 30% and hospitals and clinics have found that insurance companies were much better at paying their bills than the average patient. When they can get money up front, increasingly, the tendency has been to do so.

Patients are finding, especially early in the calendar year, that they are being asked to meet the cost of their deductible before surgeries, colonoscopies, MRI’s and CAT scans. Schedule elective surgery today and the finance department of a medical facility may call to inform you that the outstanding balance of your deductible can be paid in full before you put on a gown.

“Typically you’re going to be asked to make a prepayment when you have a scheduled procedure. The hospital knows you’re coming, they know to ask for a payment from you, and they can call you anywhere from a week to the night before,” adds Rosato.

According to the American Hospital Association, uncompensated for costs have risen from $22 billion in 2002 to $40 billion in 2016. The Healthcare Financial Management Association reports almost three-quarters of hospital systems now ask for payment in advance.

Rosato says hospitals cannot require you to pay a bill up front. There is nothing that prevents them from asking, but there is nothing that requires you to pay in advance. You retain the right to ask what other payment options are available.

You also may find that paying in advance brings other savings down the road. Some medical providers reward pre-pays with other discounts in the bill.

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