×

The Funny Business of Health Insurance

This year we got a new health plan at GE.

I chose the low premium, high deductible option, and started throwing a lot of pre-tax income into a Health Savings Account. Since we're all healthy (thank you, Lord), my husband and I now approach our health insurance needs like our high deductible earthquake insurance—we're insuring against catastrophe. In a "normal" year, we'll never meet our deductible.

If something bad happens, one MRI and, boom! we're suddenly covered.

Cost of healthcare
Lilli Day | Photodisc | Getty Images
Cost of healthcare

I thought the situation would give me new pricing power with doctors.

If I can pay cash on site and get a receipt, I can handle the billing. Or maybe I would just skip the billing and deal with the doctor outside of the insurance system, keeping receipts purely for my HSA in case we get audited.

Yesterday I went to my dermatologist for a skin cancer check. I don't have skin cancer, but I live in Southern California, and I grew up during an insane era when schoolgirls smothered their bikini-clad bodies with baby oil to get a nice burn. When it comes to skin cancer, it's only a matter of time.

I asked the doctor, "If I pay you cash today and handle the paperwork, what discount will you give me?" "Fifteen percent," he responded.

After my check-up (all good, thankfully), I went to his finance person and told her I'd like to pay cash and get the discount. "But I have to bill your insurance," she told me, as they are on contract with my healthcare provider. "Well, how about we skip the insurance altogether and you just give me a receipt?"

Here's where it gets crazy.

"You'll get a bigger discount if I bill the insurance."

Excuse me?

It turns out that if she bills the insurance, I get an 18 percent discount. So paying cash, sparing the doctor the administrative overhead, costs more.

Does this make any sense?

I asked around, and the only explanation that seems logical to me is that healthcare providers don't want to upset insurance companies by charging those paying cash, or paying outside the system, less. So people who have the means to pay on the spot are being punished.

Here is the sort of healthcare reform I can support.

Please enlighten me if I'm missing something.

By the way, we're billing the insurance and getting the larger discount.

Questions? Comments? Funny Stories? Email funnybusiness@cnbc.com