I wonder if the local county this school district is in, also provides only a "self-funded" plan to their employees. Are all the government employees getting screwed or just the teachers? It's a quaint ethical puzzle which is worse.
So the last line, "less than half what Aetna paid", does that ostensibly mean the hospital is definitely charging an unreasonable price, and by having been paid twice what is reasonable by Aetna that ostensibly this teacher shouldn't have to pay a dime? It's just a contractual reason he owes this money?
It's useful to understand what a "self-funded" plan means.
People in the US are used to their employers purchasing group health plans from insurance companies. In that model, a premium (often part paid by the employer, part by the employee) is paid to an insurance company in return for coverage. When there's a claim, the insurance company pays, out of its own money, and the insurance company's profit comes from taking in more money in premiums than it pays out in claims.
In a self-funded plan, the employer and employees still pay premiums, and all that money goes into a pool which is used to pay the claims. Typically a company is hired to administer the plan, but that company is not an insurer, and that company does not pay claims; the money to pay off claims comes directly out of that pool of premiums.
What this means is that the administrator just pays whatever it's told to pay by the company that hired them to run the plan. It's not the administrator's money being spent, and their profit is in the fees they charge to run the plan, not in denying or underpaying claims.
My very first real job out of school, years and years ago, was a place that did administration for self-funded plans. About once a month we'd get a call from one of our client companies saying "yeah, we know our plan's rules say not to pay that claim, but we want to pay that claim". And we'd say "OK, it's your plan and your money, you make the rules".
The downside is that if the company gets into financial trouble, its contributions to the pool of money that pays claims are often one of the first things to stop happening. I remember pretty clearly one client company that went bankrupt and just stopped paying into its plan, and once the money in the plan's pool ran out there were no more claims paid.
> does that ostensibly mean the hospital is definitely charging an unreasonable price
Not ostensibly, but actually.
The article goes on to identify some concrete charges that independent auditors felt were ridiculous, including charging $19k for stents that the hospital most likely purchased for about $2K.
> It's just a contractual reason he owes this money?
The hospital just straight up dropped all but $800 of the charges when they got PR heat.
So the last line, "less than half what Aetna paid", does that ostensibly mean the hospital is definitely charging an unreasonable price, and by having been paid twice what is reasonable by Aetna that ostensibly this teacher shouldn't have to pay a dime? It's just a contractual reason he owes this money?