Of the many problem areas that patients face as they navigate the health care system, the issue of unexpectedly high medical bills has been gaining more attention as more patients and their families are impacted. The practice of “surprise medical billing” by the health care industry can be as devastating to many American families as the injury or illness that affected them to begin with.
When individuals unexpectedly visit the emergency room, for example, they tend to be under the impression that any tests, treatments, medications or doctor services will be covered by their insurance company. But the truth is different. Some of these costs can fall into the cracks of a policy’s coverage and result in “out of network” billing. As a result. patients could be hit with large, even massive, medical charges. In some cases, the expenses and the time missed from work because of the condition combined can lead to foreclosed homes, predatory lending services and, especially for some younger patients, student loans that may never be repaid.
The problem is a health insurance market with a fundamental problem: The patient isn’t really the payer. That results in prices that are not constrained by normal market forces. Now, more patients are demanding answers, but the proposed “solution” offered by insurance companies, in cooperation with some politicians, promote changes that would further break our health care system by giving all of the pricing power to insurance companies themselves. That could result in fewer doctors and less access.
A prime example is the Murray-Alexander bill, introduced by Sens. Patty Murray (D-Wash.) and Lamar Alexander (R-Tenn.), which was almost was included in the end-of-year budget deal. The legislation, as it stands, would force doctors to accept in-network prices whether or not the policy qualifies. It is a “fix” that only the insurance companies love.
Everyone seems to agree that patients should not face unexpected bills. But giving insurance companies all of the negotiation power would cause a doctor-payment death spiral. Insurance companies would have no incentive to renew contracts for doctors being paid above in-network rates. And as the process continued, prices would continue to decrease. Insurance profits wouldn’t face the same pressures, though, so patients would have no guarantee of realizing any of the savings. But as doctors are paid less — and, therefore, work less — patients definitely would have less access.
A scenario with a shortage of doctors and costs that, at best, are likely to remain the same would lead to the worst possible outcome for the sick and injured.
The Murray-Alexander bill would allow insurance carriers to pay the “median in-network rate” to out-of-network doctors, further taking control away from patients and their doctors and putting it into the hands of politicians and insurance companies, which have record-breaking profits.
What would be much more constructive is a focus on reliable free-market practices to eliminate the “surprise” in medical billing. This could include a direct-pay method involving charges that patients already expect to see, while any unexpected billing expenses are sent to arbitration to be determined by a third party.
This method also promotes a more careful approach of geographical considerations involved in the billing process. It would drop the percentage of “out-of-network” cases and actually attack the root of the problem that causes this controversy. Doctors and insurance companies still would be compensated and, more importantly, patients would get the degree and quality of care they deserve.
That certainly is more constructive than forcing vulnerable patients — especially seniors, families with children, and those living in underserved communities — into a situation that can devastate their entire family’s financial stability.
It is good that Congress punted during the budget debate, but now they need to work on coming to an agreement that actually helps patients and moves the health care system in the right direction before this issue comes up again, which likely will be very soon.
Mario H. Lopez is president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity and prosperity for all Americans. Follow him on Twitter @MarioHLopez.