[nonfamous]

One thing that's hard to understand from the outside is that almost nobody actually pays those mind-blowing $200K hospital bills. US hospitals charge on a sliding scale based on the applicants' families' ability to pay.

(I don’t mean to belittle your comment about universities which is factual and helpful. I’m just pointing out that US education system is just as fucked up as the US healthcare system the OP is talking about.)

[Aurornis]

Also very true, and a good point.

Even people in the US don't understand why those $200K hospital bills aren't real.

Insurance providers (including government programs) have a fixed limit for what they pay for procedures. They pay min(billed_amount, allowed_amount) so providers don't want to risk leaving money on the table by having billed_amount < allowed_amount. To ensure this doesn't happen, they bill an arbitrarily high number with the expectation that insurance will lower it down to some much smaller number.

So every time you see posts on the internet where people talk about their "$200K hospital bill" they're always talking about that arbitrarily high value. If you have to pay cash for some reason, they will reduce the value to the cash pay amount which is in line with the insurance paid numbers.

Nobody ever pays those high hospital bill amounts.

[throwway120385]

That depends a lot on your insurance. For example, our out of pocket for my son's birth was somewhere in the neighborhood of $10k after insurance. I've met tons of people who would be bankrupted by that amount. What you're describing isn't true for people on High Deductible Health Plans, and those plans are a bit of a racket because they're frequently paired with HSAs where the employer gets to pocket anything left in the account at the end of the year. My son was essentially unplanned, in the sense that we gave up on trying to have a kid but weren't using birth control because over the previous 3 years we had not had a successful pregnancy. So an HSA would have been no help for us.

[TheOtherHobbes]

If the bills aren't real, why are there half a million medical bankruptcies every year?

Why do 41% of Americans have some form of medical debt?

https://www.kff.org/health-costs/kff-health-care-debt-survey...

[mindslight]

Note that another word that straightforwardly describes this behavior is "fraud". Medical bills aren't like a bill from a car mechanic where there is a contract (either written or at least implied because the mechanic will readily give you estimates and quotes).

In the medical context, the only contract in the picture is possibly between the medical provider and the healthcare management organization. It would be fine if providers only sent the fake bills to them as they're both willingly playing this perverse game.

But the problem is when they send their fake numbers to patients as if they're some kind of legitimate bill. Medical bills to patients are presented on a "cost reimbursement" basis - helping you cost them this much, so you are responsible for reimbursing them. By inflating the numbers 3-5x they are straight up lying about the costs they incurred. That's fraud.