Health insurance could be reinvented to provide medical costs upfront

You have scheduled an appointment with a healthcare provider, but no matter how hard you try, no one seems to be able to reliably tell you how much that visit will cost you. Will you have to pay $20, $1,000 – or even more? Patients are increasingly on the hook for health care costs through deductibles, co-pays and other fees . As a result, patients are demanding credible cost information before appointments to choose where they seek care and control their budget.

Yet, in spite of recent legislation and regulations , upfront information on patient out-of-pocket costs is still difficult to obtain from both healthcare providers and insurers. Predicting out-of-pocket costs Why is it so difficult to tell patients in advance how much their care is going to cost? This is a question health economists like me try to answer. Although the fundamental reason is simply the unpredictable nature of health care, the fact that it translates to unpredictable out-of-pocket costs for patients is a policy choice.

Health insurance plans in the U.S. such as Medicare and Medicare Advantage , as well as most individual and group plans , leave a percentage of the cost of care for patients to settle out of pocket.

These include deductibles – the amount patients have to pay for a service before their insurance kicks in – or coinsurance , a percentage of the cost of care that patients must pay after they have met their deductible. Understandably, most patients want to know their out-of-pocket costs.