The Scary Truth About the Cost of Healthcare
Kate Morthland
Halloween is approaching and there is an eerie chill in the air. Masks and costumes are coming out and you find yourself covering your head with a blanket while watching a scary movie or two. As you enjoy the spooky festivities this year, it is important to get insured, so you can avoid one of the most horrifying realities that too many Americans face, the cost of healthcare without insurance.
The cost of healthcare is rarely a topic that makes its way into comprehensive policy solutions. However, healthcare costs are a critical component to understand when analyzing the cost of health insurance. Providers, hospitals, and drug manufacturers set prices for services and drugs, and insurance companies negotiate with hospitals, physicians, and drug manufacturers to secure a lower cost for these services and drugs, giving the consumer with insurance a much larger discount for services than those consumers who do not have insurance.[1] Negotiations insurers have with hospitals and physicians can end up costing half of the price set by these entities![2]
Let’s see this play out in an example. While October 31st (Halloween) is considered one of the rarest due dates for expectant mothers, October 5th is one of the most popular dates for a birthday in the United States.[3] For many blowing out candles this month, know that your birth was not cheap! In Illinois, an individual without insurance must pay $14,725 for a vaginal birth and $19,631 for a C-Section.[4] An average cost of childbirth in the United States can cost anywhere from $14,768 to $26,280.[5] These numbers would shock and frighten anyone. However, health insurance can save consumers thousands of dollars by negotiating rates with providers and hospitals.[6] On average, the out-of-pocket cost for childbirth with health insurance is $2,854, with Illinois averaging $1,589 for a C-Section birth and $1,514 for a vaginal birth.[7] Illinois consumers with health insurance have a 19% lower cost for childbirth than the national average![8]
The cost difference between a $26,280 birth and a $2,854 birth boil down to an essential process- insurance negotiating prices to lower the cost for the consumer. Insurance companies make hospital, physician, and drug prices a little less frightening. However, consumers and policymakers alike need to remain vigilant in exploring the cost of healthcare and what drives those cost increases. Only then will policies make a lasting change in consumers’ wallets.
Take the fear out of the season by getting insured on the ACA Marketplace. Sign up by going to healthcare.gov. Open enrollment begins November 1, 2022, and ends January 15, 2022. If you sign up before December 15, your coverage begins on January 1, 2023.
[1] This is How Much Your Health Care Would Cost Without Insurance; Ready for some Sticker Shock?, Alice Oglethorpe, Women’s Health, This Is How Much Your Health Care Would Cost Without Insurance (womenshealthmag.com) (Sept. 17, 2019.)
[2] Id.
[3] 10 Least Common Birthdays in the World, Liz Allen, Knowinsider Streams of Knowledge, 10 Least Common Birthdays in the World | KnowInsiders (Sept. 26, 2021); and What is the Most Common Birthday in the United States?, United States Now, What Is the Most Common Birthday in the United States? (unitedstatesnow.org) (Oct. 20, 2022).
[4] Costs of Childbirth by State, Peter K., Policy Scout, Costs of Childbirth by State | PolicyScout (Updated Aug. 17, 2022).
[5] How Much Does It Cost To Have a Baby? 2022 Averages, Elizabeth Rivelli, Forbes Advisor, How Much Does it Cost To Have a Baby? [Year] Averages – Forbes Advisor (Oct. 10, 2022).
[6] Id.
[7] Id.
[8] Id.