Insured Americans have long been victims of high healthcare costs, but recent state laws in Tennessee and Texas are finally offering them relief. Effective July 1 and September 1, respectively, these laws allow insured individuals on individual and small business plans to pay cash for affordable services, while still receiving deductible credit. Public employees in Tennessee are also included in these reforms, making healthcare more accessible to a wider range of people. These changes are paving the way for a more competitive market within state healthcare systems.
In a recent investigation, it was found that individuals in Nashville could pay just $541 in cash for a colonoscopy, a significantly lower amount compared to the average negotiated rate of $2,400 by the three largest insurers in the state. Several providers in downtown Nashville even offered lower prices for cash payments, demonstrating that many Americans could be overpaying for services when using their insurance. However, under the new state laws, individuals are free to access more affordable options and no longer face penalties from their insurers for choosing out-of-network providers.
The burden of overpayment falls on patients, not insurance companies. Approximately 94 percent of Tennessee employees have an insurance deductible, which means they bear the full cost of most non-preventative healthcare services until they reach their deductible amount. This often results in individuals having to pay the full $2,400 for a colonoscopy from their own pockets, leaving less money for other essential expenses like food, mortgage payments, and family needs.
Under the new laws, if a patient negotiates a lower price for a service covered by their insurance, the negotiated amount, if lower than their plan's average cost, can be submitted to the insurer. The insurer must then count the full amount paid out-of-pocket towards the patient's deductible, coinsurance, copayment, or other cost-sharing amount. This means individuals have the freedom to choose any provider offering more affordable care, without facing discrimination from their insurance company.
Previously, patients typically relied on "in-network" providers, resulting in hefty bills even after meeting deductibles. The new reforms empower patients to work with their doctors in deciding the best care options at affordable prices. Currently, around 40 percent of patients forgo necessary care due to concerns about the excessive costs they may face. With the introduction of these laws, patients will have the opportunity to seek out affordable care without the fear of financial strain.
While these new self-pay laws are a step forward in assisting individuals with high-cost chronic conditions, there is still more work to be done to ensure price transparency benefits all patients. The next challenge is to create incentives for insurers that reward patients for seeking more affordable care after meeting their deductible.
As more insured patients and employees have reasons to pursue affordable care, small businesses will thrive through savings and benefit their employees amid rising healthcare costs. Additionally, healthcare professionals appreciate these laws as they will receive prompt payment instead of engaging in long battles with insurance companies over payment disputes. If enough patients utilize consumer-friendly tools to find better healthcare deals, insurance premiums can potentially be lowered in subsequent years.
The credit for these successful reforms goes to Speaker Cameron Sexton of Tennessee, Senator Shane Reeves of Tennessee, Representative Tom Oliverson of Texas, and others who championed the new self-pay reform. Pushing for such a reform in the face of opposition from those benefiting from the current system requires determination and dedication. Tennessee and Texas have emerged as national leaders in promoting price transparency, ultimately benefiting countless patients.