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Why Most People Do Not Have to Pay Their Medical Bills

If you want to understand why medical care expenses are so expensive today and want to be able to explain it to others, read this post.

If you know someone faced with huge medical bills they cannot afford, read this post.

I am in favor of paying bills. I am in favor of paying medical bills - REASONABLE medical bills. Most medical bills today are NOT reasonable. The prices charged are far too high (as compared with a free market system), and they are (most of them) what are known as "adhesion contracts." I'll explain what that is, but first some history.

The reason medical care costs today are so expensive is because the government has become more and more involved in the industry, and this has raised the cost for everyone.

Before WWII and for all of American history before that, people could pay their own medical bills with no problem. There was no "crisis." There will always be poor people in society, especially when "poor" is defined as the bottom X% of the population. By that definition, there will always be poor people, and they can and should turn to charity for help.

Back then, there was no such thing as health insurance. People could pay their doctor bills. Health insurance came about as a way for people NOT to pay their doctor bills but to recover LOST WAGES during times they were sick. Lost time from work was a bigger financial problem than the bills themselves. Originally, "health insurance" was more like what today would be called disability insurance.

During WWII, the federal government instituted price and wage controls. This meant that employers could not increase salaries. So, employers started offering "fringe benefits" as a way to attract the best people. This is when employers started paying for health insurance for employees.

In the 1950's, the tax code was changed so that employers could deduct health care insurance paid on behalf of employees. Tax deductions are good, but it should have been at the individual level. Since so many employers were now paying these costs (because of the previous government meddling), this was very popular.

In 1965, Medicare was passed, making the federal government a huge "payor" of health care costs. In 1973, Congress passed the HMO Act, requiring larger employers to provide HMO's for employees.

Since then, there have been numerous other ways the federal government has pushed its way in (unconstitutionally) to the health care industry.

Today, even before Odumbacare, the federal government is by far the largest payor of health care expenses, and HMO's are next largest. Together, they dominate the terms of what they will pay for health care expenses.

Since the individual usually does not pay for their medical expenses, doctors make more money doing multiple tests. They get paid more for that, too. But the government and HMO's often refuse to pay the full price. So, doctors get paid less than they expected on the procedures they do, and so they look to everybody else to make up the slack.

The slack is paid for by individuals with their own health insurance and those who pay cash. Since doctors are so used to doing every test and procedure they can think of (because they benefit from that by charging more to the government and HMO's), they do this with individuals, too. It is estimated that people paying cash pay 3 times the amount that the federal government does for the same things.

This is why health care costs are so high.

But, if you get a doctor or hospital bill, you usually do NOT have to pay it.

That's because almost all such bills are adhesion contracts. An adhesion contract is a "take it or leave it" contract. One side dictates the terms, and the other side must take it or leave it. But the terms are not known up front. So, the person taking it has no idea what they are taking.

In fact, most such bills are not contracts at all. A contract requires a "meeting of the minds." If a doctor does not tell a patient (a) what will be done or (b) how much it will cost, then there is no meeting of the minds. Further, even if it is a contract, it is an adhesion contract.

Adhesion contracts are VOIDABLE by the party who did not create the contract. So, a person with a huge medical bill can REFUSE to pay it by declaring it VOID.

Having said that, I do not recommend actually voiding it. Better is to notify the doctor or hospital that you MIGHT declare it void and instead work out a reasonable fee that you will pay in a reasonable amount of time.

Today, there are more and more clinics actually publishing their rates. A person could use those prices as a good faith method of determining a fair price to pay (and doing business with such doctors are NOT adhesion contracts because the amounts are known up front, unlike 99% of the industry). One doctor running such a clinic stated that he originally thought his costs would be 1/2 of what other doctors were charging. He really had no idea because he never had control over costs. What he found was that his costs are actually 1/6 to 1/8 of the costs of doctors who get paid by traditional means. So, the health care industry is costing 6-8 times what would be the case in a free market.

So, the government has created this mess with more and more intrusion into the health care industry over several decades. The solution, of course, is to REPEAL such laws (including the prohibition of selling insurance across state lines). Let the FREE MARKET return to the health care industry and the problems will be solved.

In the meantime, any large medical bills can be NEGOTIATED down to a reasonable amount and, if necessary, declared VOID.

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Forced at Gunpoint to Support The Beast

Thanks for the comments on adhesion contracts. I will look into them in more detail, since they are not usually discussed in the normal day. We must have the power to nullify this government imposed over-drugging of society because it has destroyed the standard of living, the general health, and the freedom to be healthy of most Americans.

Based on the information that I've found from local hospitals, only about 30% of the inmates in hospitals are there for bone cracking type emergencies (such as bullet wounds, falling off buildings, or getting run over by cars).

I've concluded that most people go to doctors for metabolic type conditions, the non-emergency type that can be prevented with a proper living style (diet, exercise, sleep). Even when patients need treatment for metabolic problems, there are usually solutions that do not require overpriced drugs, dangerous surgery, or inefficient health administration.

In short, we are forced - at gunpoint - to use a big chunk of our productivity to support an industry that imposes pain, sickness, and premature death on everyone.

I will look into the adhesion concept with interest and am especially interested in what the judges are ruling on that issue.

Gene Louis
Supporting a Needed Tool for Government Feedback:
A Citizen-Operated Legal System.

I ain't accepting Chickens and Grain no more

I ain't accepting Chickens and Grain for my Surrey puller no more, I want your whole farm for my professional medical services.

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

DJP333's picture

Doctors/hospitals never expect 100% of their price

Ever since medicare and medicaid got involved in healthcare the costs have sky rocketed. One of the reasons is because the government have always disputed and wanted a discount on the services they are paying for. As such over the years the costs have just been inflated to compensate for that discount. Hospitals usually record revenue each month, not based on collections or by the amount they charge the patients. They record Gross Revenue (the sticker price they have set) and then they subtract the Contractual Allowance (the discount) to come up with their Net Revenue. The contractual allowance (or discount) percentage changes based on the revenue source, which could be governmental (medicare or medicaid), managed care (HMO or PPO), or other sources (private pay or insurance). These discounts can range anywhere from 30-55%, and are determined days or weeks after the procedure/visit. Because of these discounts all prices are heavily inflated, because the hospital can never expect what they will collect. A ridiculous system.

"It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different." ~CW

and if you don't want to use conventional . . .

medical 'services'?

You have to pay a fine under obamacare--

we don't have insurance, because we don't use conventional medical services--

and because it is exorbitant.

Most people who declare bankruptcy for medical expenses actually are insured--

I know several people who are burdened with medical debt who have great insurance plans--

in other words, it's a huge scam--

doctors blame the government--

so they can't be blamed (doctors)--

but it has become an expectation for medical doctors to live 'high'--

to have huge homes, nice cars, send their children to the best schools and travel the world--

I remember when doctors lived in decent, but modest, homes and struggled to make ends meet--

before insurance--

and, yes, even people with modest incomes could pay their doctor bills back then--

and the doctors were family friends--

it's hard to be awake; it's easier to dream--

Most doctors and hospitals in the past few decades

have been practicing usury, plain and simple.

Also, a professional nurse told me that hospital bills are inflated because the hospital actually expects you to negotiate the price, not just accept the bill as is. Good to know about voiding adhesion contracts...

My grandfather was a doctor during the depression. He regularly treated people without being paid and without expecting to be paid. If a person could pay, they would, the fees were not exorbitant and people had honor, so would pay according to their true ability to pay. My grandfather did not pursue non-payers. He wrote it off and was well-respected in the community. Farmers would often pay him with a bag of potatoes or similar. Back then, medicine was considered a NOBLE profession and a calling, not a for-profiteering business model. I would not call it noble now. Exploitative is a better descriptor now.

I remember doctors like your grandfather--

they weren't poor, but they certainly were not rich--

it WAS a noble profession back then!!!!!!!!!!!!

it's hard to be awake; it's easier to dream--

$19,320. Two 1 liter bags of saline per week, total 8 a month.

$19,320 per month. This is a bill I received last month for my mother's twice a week saline infusion treatment. Some blood tests are included (nothing unusual, just to see the treatments are working).

My mother's insurance is terrific. In general, we have had minor out of pocket bills to pay for her care.

Our part to pay is $550 a month. This will be difficult to manage, but we will do it. But isn't this excessive (never mind the $19.3K) for 8 1 liter bags of salt water a month?

Why are medical cost so high?

The current "medical/sickcare" business model is based on the precept that people are worth more sick than they are well. It has very virtually nothing to do with health, and everything to do with locking people, providers ,and stakeholders into a controlled system for life.
1. FDA oversees the systematic poisoning of people necessitating the need of insurance & therapies
2. AMA owns the Codes, (diagnostic & therapy), by which medical providers bill for their services, and are reimbursed for their service by the insurance companies.
3. Insurance companies decide what codes they will accept, and how much they will reimburse the medical providers.
4. Medical providers, choose which codes will generate revenues, and then test and treat patients accordingly.
5. Patients are treated according to which codes will generate revenues for the medical providers.
6. If a potential lawsuit is possible then, tests are done to support the suit, and therapies are chosen as to not jeopardize the suit.

1. Patients pay insurance premiums, and medical provider co-payments.
2. Medical providers collect co-payments, and insurance reimbursements for specific codes billed.
3. Insurance companies collect insurance premiums, and reimburse medical providers according to codes billed. (They decide what percentage of the allowed amount they will pay, and have up to 5 years to demand repayment of reimbursements from medical providers should they deem an unjustified reimbursement).
4. AMA leases the codes (diagnostic and therapy) to medical providers, and insurance companies for about $10 million each year.
5. FDA oversees, and approves all food, drugs, and therapies allowed to participate in the market place.

"A vote for the lesser of two evils is a vote to keep things the same", Buckminster Fuller..
A choice for liberty is always a choice for liberty.

Good Reply


Gene Louis
Supporting a Needed Tool for Government Feedback:
A Citizen-Operated Legal System.

Many thanks for the concise

Many thanks for the concise explanation. Do you have more links on Negotiating and Voiding medical bills? That sure looks like mandatory knowledge for everyone.


good article. I have not had health insurance until I turned 65 last year and felt forced to buy medicare mainly because obamacare was coming and everyone would be forced to purchase health insurance.

I remember when it was no problem to go to a doctor, or dentist, and be able to afford the bill. Actually, most doctors have a different, lower price for cash patients than insurance patients. That is what I found until I moved to Asheville, NC, where there are actually doctors who refuse cash patients (go figure that one).

Also, if you have no insurance one tends to not go to doctors as much; only emergencies, which in my case might be a broken bone. And, I am healthier than most people my age because of that...no medications, I use nutritional supplements, organic food, and exercise.

I can never understand who people are talking about when they say there are people getting free medical care because they do not have insurance. No one ever offered me free healthcare; you always have to pay, even if you set up a payment plan. I don't know anyone who has ever not had to pay for their health care other than, I assume, illegal immigrants. I have a friend in San Diego who worked in a hospital and she got disgusted by the illegals coming into the hospital with fake social security numbers and addresses and thus getting "free" healthcare because there was no way to bill them. Let the big businesses who hire them pay the bill; why should you or I?

Why are the medical bills so high?

Thanks for doing a topic on out of control prices of hospital procedures and how they got that way. The reason why insurance is so high is because the prices charged by doctors and hospitals are so high.

In the thousands of hours the news does on Obamacare insurance, not one minute is spent on the price tag of the lab tests, medication, hospital charges, and doctor bills.

Only half the equation

Rockefeller Rothschild eugenics cause millions of deaths per year


The part you left out.

KNOWING that many claim lines are denied or net pay per claim line is reduced, the medical associations stack their "protocols" or normal procedures, tests and services that should be performed for a given condition or indication.

For example, if you show "flu symptoms", rather than just giving you and aspirin, vit c and d and patting you on the head and sending you home for a $20 copay + $20 for the visit paid by insurance, the stacked protocol is to:
-perform a physical
-draw blood
-perform labs
-standard ofc visit charge
-possible x-ray if age > 50

It's the "accepted" association's way to stack the bill to the insurance company. In response, the company negotiates tighter contracts with providers whose associations then reassess the protocol and stack higher, ending up in a feedback loop spiral.

It's to the point where, for example, were a parent to disagree with a protocol a doctor is performing on the child, the doctor could threaten calling child protection to ensure that a physician or facility can complete the protocol and bill all the protocol services, labs etc on the claim.

Very well done

This is a very comprehensive explanation of the legal facts and inner workings of the industry. I have seen much of this at work myself. Thank you.

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.