How health insurance billing works?

[seanpic]

Hospital billed $1040.06, insurance paid only $416.02, letter states I owe $0. Who paid for the remaining $624?

[DayByDay]

The hospital likely has a contract with the insurance company to accept a reduced rate, leaving you owing nothing.

[Folio Explorer]

Following DayByDay, I've heard the phrase "contract rate" to describe the lower prices insurance companies negotiate with health care providers & facilities. The 60% savings highlight an often overlooked benefit of health insurance - access to lower "contract rates", not full sticker prices.