What does “self-pay” or “pay in cash” mean in healthcare?
In healthcare, most patients use health insurance to cover some of the costs of their medical needs. Despite having health insurance, you may be required to pay for portions of your healthcare depending on your insurance coverage. For example, a copay, which means you may be responsible to pay for a fixed fee for a service (e.g., $75) or you may have a deductible, which means you’re responsible for paying for most of your care until you meet your deductible (e.g., $5,000). The remaining portion of the care is paid by your health insurance. That “portion” could end up being hundreds or thousands of dollars
A self-pay patient or someone who pays in cash, on the other hand, is a patient who directly pays the provider for the full cost of their visit or procedure. You don’t go through your insurance company at all when you’re self-pay.
Why might paying in cash be a better choice?
In the past, it was only patients who visited doctors without insurance who would pay in cash.
Today, though, if you have insurance, you may pay less out of pocket if you pay in cash compared to using your insurance.
In particular, people who have not met their deductible can often save money by paying cash. If you have a high deductible for your insurance plan, paying for typical medical care through insurance could cost you thousands that you don’t have to spare. Even if you have good insurance, it can still be cheaper to pay cash!
Health insurance was originally designed to protect against catastrophic health issues (i.e., expenses in the hundreds of thousands of dollars).
Today most people use their insurance card like a credit card, not realizing the actual overall cost to themselves, and how broken the insurance system has become. When you add up the monthly premiums, deductible expenses and co-pays, the average insured person can pay out over $10,000 before insurance pays a dime for their medical bills.
We’re not advocating to not have healthcare insurance. Having some form of insurance that fits your budget is important to protect yourself from financial ruin unforeseen medical bills can create.
To keep it simple, many healthcare providers charge less to self-pay patients compared to patients who use insurance because it’s cheaper for them to not deal with the administrative burden of insurance companies. Most healthcare facilities have multiple staff members dedicated to the insurance billing process increasing their overhead significantly.
Choosing to be a cash patient
The idea of being a self-pay patient when you have insurance may seem foreign to some, but in truth, you’ll often pay less out of pocket this way.
At the end of the day, if you’re trying to save money, you should ultimately choose the most affordable option for you, which may be paying cash. Once you decide to act as a self-pay patient, you’ll find even more affordable care if you take the time to shop around.
That’s where SimpleCare can help. Our providers charge a transparent, fair and reasonable fee for their services, when a SimpleCare patient member agrees to pay in full at the time of services, or shortly after.