Paying cash for healthcare: Can it save you money?

Paying cash for healthcare: Can it save you money?

You don’t need health insurance to access healthcare. In fact, you can pay out of pocket for healthcare even if you have insurance. Sometimes, doing this will cost less.

GoodRx, a platform for medication savings, explains more about what’s known as cash-pay healthcare.

Key takeaways:

• Cash-pay healthcare means accessing medical treatment, preventive medicine, and wellness services without insurance. This is also known as paying out of pocket or self-pay healthcare.
• You can use cash-pay healthcare even when you have insurance. This is more common if you have high copays, have not met your deductible, or are underinsured.
• In some cases, skipping insurance and using self-pay can mean lower prices for services.

What is cash-pay healthcare?

Cash-pay healthcare means paying for medical services without involving insurance. It’s also known as out-of-pocket healthcare or self-pay healthcare. This just means you’ll use your own financial resources for care. Cash-pay healthcare doesn’t require currency, however. You could pay with a debit or credit card — or even a medical credit card.

What are the benefits of cash-pay healthcare?

Self-pay healthcare can help you reduce your expenses for medical services. Cash-pay healthcare can benefit you by:

• Letting you bypass using health insurance if you have coverage.
• Helping you avoid insurance claim denials or delays, such as prior authorization or step therapy, when you access care.
• Offering a lower-cost option for accessing care if you haven’t met your deductible.
• Offering a lower-cost option for filling a prescription if you haven’t met your deductible.
• Offering an alternative that costs less than your copay.
• Offering a lower-cost option for care than your share of the insurance plan’s negotiated rate.
• Letting you choose a healthcare professional who’s outside of your plan’s network.
• Giving you some comfort if you skip health insurance and pay directly for only the services you use.
• Giving you healthcare cost literacy, which clarifies pricing through healthcare price transparency.

What kinds of healthcare practices accept cash pay?

Here are some healthcare options you might access by paying cash:

• Concierge care: Concierge care is a membership-based model, often with an annual fee, which gives you direct access to a physician. Same-day appointments are usually available. Concierge care offices usually limit the number of patients and offer longer appointments. Concierge care tends to attract higher-income consumers. This type of care is also called concierge medicine, retainer-based medicine, platinum practice, and boutique medicine.
• Convenience care: Typically, in high-traffic areas, these healthcare facilities have transparent and flat-free pricing. Locations include retail clinics — often in pharmacies and grocery stores — and urgent care centers.
• Direct primary care (DPC): DPC is an alternative model for accessing medical care without insurance. You make the care arrangements with a healthcare professional and pay out of pocket. DPC may be offered by a physician, a physician assistant, or an advanced practice nurse. DPC typically covers routine care, chronic condition management, acute care, and care coordination. Emergency and hospital services aren’t included.
• Sliding scale care: Care at community clinics tends to cost less, but it’s not free. There are also other free and low-cost healthcare options available nationwide.
• Traditional healthcare with self-pay options: If you’re not using insurance to pay for medical services, you are entitled to a good faith estimate (GFE), which is an itemized list of expected costs for a scheduled service. If your bill is $400 or higher than the GFE, you can dispute the charges. In many cases, the self-pay price is lower as a discounted cash price than the standard hospital charges and negotiated insurance rates. The same can be true in other traditional healthcare settings.

When should you use cash pay instead of insurance?

Cash pay is an option, whether you have insurance or not. In some cases, healthcare can cost you less out of pocket when you skip your insurance. Here are reasons you might choose self-pay instead of accessing your coverage:

• You are underinsured and your health plan doesn’t cover the service, item, or care you need.
• You are underinsured and your prescription plan doesn’t cover your medication.
• You want to avoid prescription coverage restrictions, such as prior authorization or step therapy.
• You want to choose a healthcare professional who is not in your insurance plan’s network. 

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What are alternatives to cash-pay healthcare?

If you don’t have insurance, you might not be able to afford medical services out of pocket. But you may qualify for options that make your healthcare free or low cost. These alternatives include:

• Medicaid: If you qualify, your healthcare typically has very low out-of-pocket costs. Your expenses can be even less if you are dually eligible for Medicaid and Medicare.
• Sliding-scale care: Care at community clinics can be among the free and low-cost healthcare options. These locations are available nationwide.
• Patient assistance programs: If you don’t have insurance, you may qualify for free healthcare and prescription medications from patient assistance programs.
• Charity care: This is also known as indigent care. You may qualify if you are medically indigent. This means medical bills and medical debt threaten your financial stability. You’re financially indigent if you’re uninsured or underinsured and your household income is below a certain threshold. Nonprofit hospitals are legally required to offer this type of financial assistance. Some for-profit hospitals do too.

What are the drawbacks of cash-pay healthcare?

If you have health insurance, the main drawback of cash-pay healthcare is that your spending typically doesn’t count toward your deductible. Sometimes it’s more strategic to self-pay if you don’t expect to meet your deductible. But be mindful that meeting your deductible is typically the only way someone with insurance gets cost-sharing relief before the year ends.

Another drawback is the unexpected cost of care that’s not coordinated and negotiated. This is particularly common for a complex procedure without a bundled price because you will receive bills for physician services, the care of other medical professionals, facility fees, and, potentially, other charges. If you have health insurance, always weigh the costs, benefits, and drawbacks when choosing to pay on your own.

Frequently asked questions

Is self-pay the same as cash-pay healthcare?

Yes, self-pay healthcare is the same as cash-pay healthcare. You are responsible for the costs and will not be using insurance.

Can you cash pay even if you have insurance?

Yes. People do this all the time for different reasons.

Do cash-pay transactions count toward your deductible?

Cash-pay services typically don’t count toward your deductible. But you can ask your insurance plan about your spending outside coverage to see if your expenses can be considered.

The bottom line

Cash-pay healthcare — also called self-pay healthcare — means accessing medical services and paying the bill without involving insurance. It’s also known as out-of-pocket healthcare. Benefits include bypassing health insurance and coverage limits that delay care and may involve more out-of-pocket spending. You may also be able to access care for a lower price than your share of negotiated insurance rates, which tend to be higher than cash prices. It’s important to note that if you have insurance and pay on your own, what you spend typically doesn’t apply to your deductible.

This story was produced by GoodRx and reviewed and distributed by Stacker.