It was 2 in the morning when Annette Alexander rushed her daughter Cherie to Abington-Lansdale Hospital with throbbing head pain.
The 24-year-old's two-hour visit for what turned out to be a migraine headache led to a bill of $1,642.
But in her haste, Alexander had left the family's new insurance card at home. The Montgomery County hospital discounted the bill under its uninsured patient program, to $821.
Realizing the error, Alexander called the hospital to provide the insurance information and soon got a new bill. The $1,642 charge had again been reduced, but this time to the insurer's negotiated rate: $1,214.
So in this case, being covered by insurance cost the Alexanders an extra $393.
"I wanted to go back and ask if I could pretend I didn't have insurance anymore," said Alexander, 48, of Lansdale.
No wonder. The Alexanders, like a growing number of Americans, have a high-deductible health plan. And until their expenses exceed that deductible, they are paying health bills out of pocket.
What's more, those who read their insurance statements – which prominently display negotiated rates as far less than the hospital's charges – would think they're getting the best possible deal.
Alexander would by no means be better off without insurance. A serious medical situation, such as cancer or a car accident, could bankrupt the family. And once the deductible is met, her out-of-pocket costs will be far lower than an uninsured patient would face.
But high-deductible health plans are exposing what used to be a well-kept health-care secret: An insurance card – and your insurer's negotiating clout — are not necessarily a ticket to the best price. That's one reason why more insured people, as well as the uninsured, need to know cash prices, which is the focus of Philly Health Costs, the Inquirer's project aimed at making medical billing more transparent.
"With these high-deductible plans, the curtain is pulled back and you see some of these nonsensical calculations going on," said Ron Peck, a health-benefits lawyer with the Phia Group, a health-cost consulting firm based near Boston.
Prices for hospital services, including an emergency department visit, vary widely, depending on which hospital you go to, and which insurance plan you have. Health systems commonly charge more to private insurers in order to make up for lower payments from Medicare and Medicaid, as well as charity care.
The practice is not new, but largely went unnoticed when insurance plans and employers covered a greater share of patients' health expenses, Peck said.
Patients are increasingly catching on, as they take on responsibility for a growing share of their health expenses under high-deductible plans.
Cherie and Alexander's husband, Jeff, are covered by a high-deductible Aetna health plan through his employer. Alexander has a separate policy through her employer. Aetna spokeswoman Shelly Bendit said the company could not speak to this case because of patient confidentiality rules. In general, she said, while the company "works with hospitals to negotiate the best rates for our members, there are many factors which contribute to a member's ultimate cost," such as plan type and how costs are shared.
"Additionally, Aetna has no control over a hospital's billing policies and whether they're determined by coding, charitable missions, or any other policy that the hospital may apply," Bendit said in a statement.
Nonprofit hospitals are required to have financial-assistance programs to cover care for uninsured patients who are unable to pay. In an effort to curtail unpaid bills, hospitals will often include a discount in uninsured patients' initial bills. Some offer discounts for prompt payment and may even knock down the price for those who pay in cash up front, or promptly after the service.
"If you're not going to be compensated at all or it's going to be administratively burdensome to recoup that, it's far more advantageous to resolve the issue with the patient as timely as possible," said Paula Bussard, chief policy officer for the Hospital and Healthsystem Association of Pennsylvania.
Abington-Lansdale Hospital, which is part of the Jefferson Health System, discounts emergency department bills by 50 percent when the patient is uninsured, with a maximum charge to the patient of $1,600. Patients may qualify for additional discounts based on financial need.
"Abington-Jefferson Health's financial assistance policy is an institutional effort not to overburden our uninsured or underinsured patients and to encourage everyone — regardless of their ability to pay — to access quality health care in their time of need," John Brand, a spokesman for Jefferson Health, said in a statement.
Brand also cited patient confidentiality rules to explain why he couldn't speak about Alexander's case specifically.
It's not just hospital services that may cost more with insurance. Price-tracking tools, such as website and mobile app GoodRx, have exposed wide variation in prescription drug costs, with the cheapest prices frequently available to customers paying without using insurance.
That's not what most people assume, said Jeff Kullgren, an assistant professor of internal medicine at the University of Michigan.
"The conventional wisdom most people understand is that when a large insurance company has a lot of members, they have more power to negotiate lower prices," Kullgren said. "Most people would expect that the price would be less than what an individual without any insurance at all would pay."
It's true that private insurance companies use their heft to negotiate on behalf of their members in a way individual patients can't.
But insurance doesn't exist to get members better rates on routine services. Rather, it exists to protect members from crippling expenses in the instance of an emergency, Peck said.
What's changed, Peck said, is that more of the routine expenses, such as doctor's visits, are coming out of members' wallets.
As a result, he said, "you care what the price is."
Patient advocates advise shopping around for services, asking about cash prices and understanding the details of what your health plan covers.
Alexander and her husband received that advice when they switched to high-deductible plans a couple years ago, and have tried to follow it.
"But when someone bangs on your bedroom door at 2 a.m. and says I need to go to the hospital, you're not going to start making calls to see who's most efficient," Alexander said.
Once they had the bill, Alexander saw two options: Fight to pay the $821 she was initially billed outside of her insurance plan or pony up the $1,214 and have it count against her daughter's $2,500 deductible.
She decided to pay the $1,214.
There could have been a third option, Peck said.
Had Alexander taken the $821 bill and paid it, without submitting insurance information to the hospital, she may have been able to submit it to her insurance company for reimbursement and the amount could have applied to her deductible.
Ellen Magenheim, of We Care Advocates in Marlton, helps consumers navigate medical bills. In her experience, hospitals are often willing to negotiate if it means they'll get paid something.
"You have a voice," Magenheim said. "If you feel it's not just, talk to somebody."
Change will come, she said, if patients continue to press the issue.
Alexander didn't think it was right to be charged more for having insurance. But she didn't think it was an argument she'd win.