The coronavirus has exposed deep inequalities in how Americans pay for health care

The way most health care is paid for in America – through employer-based insurance plans, Medicare, the exchanges and Medicaid – has always created inequities. These differences, along with gaps in the U.S. safety net, have never been starker than right now.

Even before the coronavirus crisis, 59 percent of Americans said they lived paycheck to paycheck. Now millions of our fellow citizens have no income at all and are getting kicked off of their health care plans.

In the ongoing debate about how to increase access to quality health care – ranging from former Vice President Biden’s proposal to lower the age for Medicare eligibility to additional states signing up for Medicaid expansion – it will be critical to achieve greater affordability in our health care system. More Americans die for the lack of preventable treatment even though we spend about twice per capita what other countries spend on health care.

Congress and some states have taken steps to partially cover citizens for COVID-19-specific testing and treatment and focused on policies to get through the current crisis (through grace periods on premiums due and freezing people’s insurance status until the crisis is over). But when this has passed, policymakers will need to strengthen health care protections for those without employer-based insurance and reduce the cost of care for everybody. 

The massive rise in unemployment that will result from COVID-19 will yield a similarly massive crisis in the financing of health care for millions of Americans.

When people lose employer-based care, they will move to a) Medicaid, where they will lose access to many providers who are unwilling to accept low reimbursement rates, b) ObamaCare exchanges or c) the ranks of the uninsured. Because of the cost of care in the U.S., all of these choices are expensive for both individual and health care consumers and taxpayers, who bear a huge cost burden. 

As a governor during the Great Recession and in its aftermath, I saw firsthand the difficulty of rapidly increasing budgets for Medicaid as well as the toll that lack of access to affordable care took on so many of my constituents. 

Those experiences revealed one of the biggest ethical and financial dilemmas in American health care: Doctors, hospitals and other providers are paid vastly different amounts of money for providing exactly the same service depending on the economic status of the patient. Other countries – including those who don’t practice “socialized medicine” in any form – avoid price discrimination through all-payer systems, featuring negotiations between regional associations of insurers and providers. Unfortunately, in our current system, uninsured middle-class Americans, who have the least bargaining power, pay exorbitant prices. In any other industry, the price discrimination that exists in health care based on the economic status of the customer would not be tolerated.

In addition to addressing the clear unfairness of different fees for the same service, Congress must also begin to fix:

1. The market forces that tend to rein in prices in other markets don’t exist in health care. When hospitals create a monopoly by buying up competitors as well as physician practices, insurers lose their negotiating power. Anti-trust authorities must be used aggressively.

2. Although pharmaceutical companies argue that drug prices account for a small share of health care spending, American consumers should no longer be expected to pay on average four times more than their peers around the world for prescription drugs. In her book,” An American Sickness,” Elisabeth Rosenthal offers several practical suggestions about how to reduce drug prices, including allowing importation, facilitating the entry of generics into the marketplace and forcing new drugs to be compared to alternatives and not only to placebos. 

3. The current fee-for-service model leads to too little treatment for some patients and too much care for others, depending on the financial rewards to providers, rather than the medical necessity to the patient. Combined with too many surprise charges by out of network providers, facility fees that differ markedly even for the same services and rapidly growing costs for administrative rather than medical care, Congress should double down on investments that move toward paying providers for quality rather than volume of care. 

Changing the way we pay for health care and making it more affordable is the single most complicated public policy challenge we face, because it entails changing how an entire industry gets paid. Though the issue of cost has always been important, the economic and resulting health care crisis forced on all of us by COVID-19 adds a level of urgency to the debate that can no longer be ignored.

Jack Markell served as the Democratic governor of Delaware from 2009-17.