Why do I need to know the negotiated price of services?


The price of health care services varies considerably, depending on your insurance and health care provider. Health insurance companies rarely pay the charge for a service; instead, they negotiate the price they will pay for health care services ahead of time. Each insurance company negotiates with health care providers to establish the prices that their customers will pay to receive care and services.  NHHealthcost.org is a useful tool to look at the cost of care for consumers under different health plans, some providers may be more affordable under one health insurance company's plan than another's.

The prices negotiated by health insurance companies are greatly discounted from the list price, or charge rate, for the service. In many cases, the discounted price negotiated by the insurance company may be less than 40% of the list price, or charge rate, for the service. When you purchase health insurance, you obtain the right to pay for services covered by your insurance policy at the discounted rate negotiated by your insurance carrier.

Knowing the negotiated price of services gives you a better idea of what you will be expected to pay. If your policy has a high deductible or requires that you pay a certain percentage of the cost of a health care service, you will pay for the services that are covered by your policy at the discounted rate. If you don't have insurance, the price of the service may be a lot higher.