According to Sarah:
Under an insurance plan, there is a negotiated cost for every service - shots, physicals, face-lifts, everything.When there is no insurance, there is only a "whole-sale" cost.So what happens to the difference, you ask?Well, depends on the insurance carrier; some doctors will charge $50 and get paid $50 by the insurance company. Most will charge $50 and get paid $10 or $11 (the negotiated cost of the shot).The excessive costs are often from the physicians, not the insurance companies. When the cost is higher than the "wholesale", it is usually the result of a combination of the doctor over-charging and the insurance company agreeing to over-pay it to keep the dollars coming in and out of both sides of the industry up at an inflated level.
And we wonder why health insurance costs are so high.
Addendum: Hit Coffee had the following insight:
I can't speak on vaccines, but in other areas of medicine it actually makes sense for doctors to charge insurance companies more than they charge patients. If you pay cash then they know that they're going to get their money right then and there. When the insurance company involves, at best their payment will be delayed. Often the insurance companies will find ways not to pay and then time and effort have to be expended getting the money from the patient.
For example, I visited the doctor a while back about persistent headaches. Persistent headaches are covered, but I was trying to quit smoking at the time, and both my doctor and I found out later that anything due to drug-cessation (including tobacco) were not covered. There are enough technicalities that except for the most routine stuff, a doctor doesn't know for sure whether the insurance company will cover it. When they don't, they have to go through collecting procedures that cost money.
And no matter who ends up paying, payment is both delayed and costs more in man-hours and paperwork to collect. It's all a very inefficient way of going about it. My wife is a medical resident, I have good benefits, but I still pay cash whenever I can.