Samantha Smith from Harrisburg, Pennsylvania, underwent emergency surgery for an ectopic pregnancy and was surprised when her insurer was billed nearly $100,000 for the outpatient procedure. "I'm grateful I didn't die," she said. The hospital that treated her, Penn State's Hershey Medical Center, ultimately received $61,000 from her insurer.
In Albuquerque, New Mexico, Jamie Estrada received two lidocaine injections in his upper spine to determine if a nerve ablation would relieve his chronic neck pain. Each 10-minute procedure resulted in a bill of $28,000 to his insurer. His insurance paid $46,000 per injection to New Mexico Surgery Center Orthopaedics. Estrada’s coinsurance responsibility for each injection was over $5,000 due to his high-deductible plan.
Mark McCullick of Longmont, Colorado, had a PET scan to check for cancer recurrence. Although the scan showed no evidence of cancer, the company administering his insurance received a bill for $77,000 from Intermountain Health. After preauthorization issues surfaced post-procedure and coverage was denied, McCullick was asked to pay either the full amount or a reduced cash rate of $14,259.
Medical inflation has outpaced general inflation in recent years as charges for routine procedures have reached tens of thousands of dollars. These cases draw attention to how health care prices are set and negotiated between insurers and providers. The initial “chargemaster” rates hospitals use often serve as starting points for negotiations with insurers but can be much higher than what is eventually paid. Patients typically owe coinsurance based on these negotiated rates—often 10% to 20%—which can still result in significant out-of-pocket costs.
Insurers may not always negotiate aggressively since they can offset higher payments by raising premiums and deductibles in subsequent years. This practice indirectly affects all insured patients through increased overall costs.
Chris Bond, spokesperson for AHIP—the trade group representing health insurers—said via email: "As the largest single category per premium dollar spent, increases in the cost of hospital-based care have an outsized impact on premiums." He added that plans are "focused on making benefits and coverage as affordable as possible for their members."
Price transparency rules introduced during the first Trump administration required hospitals and insurers to publish machine-readable files showing cash prices and negotiated rates. However, these documents have proved difficult for most patients to interpret without expert help.
Marcus Dorstel from Turquoise Health noted: "When we look at the data, whether it's from a chargemaster or what insurers paid, it's all over the map — it makes no sense." Ge Bai from Johns Hopkins Bloomberg School of Public Health explained that "the price different insurers pay for the same billed charges 'can be three or more times different at the same hospital.'"
Some insurance contracts automatically pay a percentage of hospital charges; others agree on standard case rates but allow extra billing (“carve-outs”) for costly drugs or devices used during treatment. In McCullick’s case with Intermountain Health, about 80% of his PET scan charge came from an expensive drug administered before imaging.
Negotiating power between health systems and insurers influences final pricing significantly. Dorstel commented: "In some markets insurers are price-makers, and in others they are price-takers." Bai pointed out that because regulations require insurers to spend most premium revenue on patient care (80–85%), higher medical prices mean larger overall spending—which can justify higher premiums while maintaining compliance.
Estrada discovered large differences between facilities: at New Mexico Surgery Center Orthopaedics (owned by United Surgical Partners International—a subsidiary of Tenet Healthcare), contracted rates were much higher than those at nearby hospitals or what other insurers paid there for similar procedures.
Neither United Surgical Partners International nor Tenet Healthcare responded to requests for comment regarding their pricing practices.
Smith found she was billed separately for both ectopic pregnancy removal and endometriosis biopsy performed during one operation—each at full contracted rate—even though federal coding guidelines generally prohibit such dual billing under these circumstances. Despite consulting multiple authorities including Penn State hospital officials and her state attorney general’s office without resolution, Smith expects she will need to pay her $5,250 coinsurance obligation.
Scott Gilbert from Penn State Health stated: "Penn State Health recognizes that health care billing can be confusing and often overwhelming for patients. The process involves many factors..."
McCullick continues negotiating payment terms after being offered several self-pay options exceeding $10,000 each time he called Intermountain Health following press inquiries about his bill. Sara Quale from Good Samaritan Hospital wrote: "We sincerely regret the frustration this situation has caused Mr. McCullick... we have been in consistent contact with him."
After facing high bills despite insurance coverage—and disagreements with providers over procedures—Estrada declined further treatment rather than risk additional costs or confrontations with staff who accused him of causing trouble after he questioned charges related to planned nerve ablation.
Americans remain concerned about rising healthcare costs according to public opinion surveys conducted ahead of 2026 legislative sessions; affordability remains a key issue among voters along with access and coverage questions.
