What is it they say about sausages and laws?

They say you don't want to see how either one is made. Well, I'd like to add insurance policies, and well, pretty much insurance anything to the list.

I've been on a really great plan for the past 10 months -- thanks University of Michigan (and the gays! who paved the way for significant others to be covered on their non-spouse partner's plan). Each time a claim is processed, the insured member gets a copy of the Explanation of Benefits (EoB), which outlines the services rendered and if they were covered (and for how much). I'm the type of person to carefully go over each and every EoB; this is pretty much the only way to figure out what was charged, how much, and what was paid.

In looking over my EoBs, I noticed two things--one of which should be illegal, and the other is just really sneaky.

1. The discrepancy between what the provider attempts to charge and the price the insurance company actually pays is criminal. Case-in-point: Lancets (the little plastic pokey things that go in the lancet device in a blood glucose meter kit) are charged at $75. That's how much an uninsured person is charged. The insurance company has negotiated (strong-armed?) this price down to $5. The real cost of lancets remains obscure, but is probably somewhere around $10 if I had to guess. 
2. The insurance company uses the amount is was charged as the "amount covered." Remember, they didn't pay this amount; it's just what they were charged. Ie: "Amount covered: $75" when really they paid $5 for the thing. Disgusting.

While I think this is very sneaky of the insurance company, I don't think it's such a huge deal, unless they use this amount to calculate toward maximum yearly or lifetime benefits. When I was in graduate school at Brandeis, I had an insurance plan (boo Harvard Pilgrim, you sucky, sucky insurance company) that had a maximum yearly payout of $2,000 toward prescription benefits (then the plan reclassified all kinds of items that are traditionally under Durable Medical Equipment and called them prescriptions). If they used the amount charged--rather than the amount paid--as a way to calculate that maximum amount, then I have a HUGE problem with that.

Let's look at an example, using real amounts, of what this would mean:

Amount charged (and amount paid):

• Lancets: $75 (paid $5)
• Sensors: $1500 (paid $1100)
• Insulin: $768 (paid $485)

Total amount "covered" = $2,343 (leaving me with $343 to pay in addition to the copays for each Rx)
Total amount actually paid = $1590 (leaving me with $0 to pay, except for copays, and some cushion room for other prescriptions, should I need them)

Just to get political for a minute: Is this what Republicans envision for our free market healthcare system? One in which insurance companies and healthcare providers continue to obscure and confound pricing? One in which the uninsured is completely taken advantage of?

When you look at the inflated prices that the uninsured are paying, does requiring people to get health insurance seem so bad? Perhaps when all are insured, these criminal practices will go away.

Done.