I was shocked when I learned of that as well. How can that be legal?

It's my understanding that the health care provider & insurance companies establish 'contracted prices' for specific procedures. Since the cost of the same procedure will vary, depending on geographical region (think of NY v's middle of nowhere), they establish these contracted prices to keep the health care provider somewhat honest, and to reduce paperwork in reviewing every single case. Also, the cost of identical procedures at the same location can vary, depending on the time taken & any apparent anomolies observed during the procedure.
So, the 'contracted price' between the insurance company & provider is frequently more than the cash price between Joe Public & provider

Seriously?

So the insurance company submits a contract with prices that are double the cash price? And it magically happens that each insurance company submits the same price?

Sorry but something fishy about that. A visit is a visit and the price should be the same, whether cash or insurance.

Such a scheme disadvantages the consumer, who will reach a lifetime maximum in their coverage before they should, being charged twice the price, had the insurance company just given them the money to pay in cash.

Unfortunately not so. The contracts are negotiated between the insurance company and service provider. Once contracted the service provider is considered "in network" so if you have coverage through insurance company ABC, for example, you can go to any "in-network" provider and be guaranteed coverage (payment) from ABC. If you elect to go to an "out of network" provider, ABC will likely not cover all of the costs, and there is no guarantee that the out of network provider will charge you less.
I'm pretty sure there is some history to why it's done this way. My guess is it has something to do with providers and/or insurance companies, sticking it to patients in the past.

The letter writer needs to realize that "Big Pharma" has absolutely nothing to do with his complaint. It's "Big Health Insurance" that he needs to air his grievance with. Big Pharma does not perform health exams.

This has been the practice for years.Where have you been for the past 10 years or more?

Unless there as been a change, I asked Doctors Hospital if I paid CASH for a surgery
would they give me the same price they give the insurance companies? Yes guess it.,
Not one cent reduction.

Both businesses are in it for a profit and they seem to dance tomgether for self inrichment.