Price controls are still the wrong fix for surprise medical bills

With a fourth COVID-19 federal relief package apparently on the horizon, there appears to be significant movement from the White House on adopting a proposal mostly backed by Democrats and the country’s largest and wealthiest insurers to establish government-enforced price controls in response to surprise medical bills. 

This comes despite earlier statements from President Trump’s chief of staff, Mark Meadows, that rightly criticized price controls as the wrong fix for surprise medical bills. In a Feb. 10 letter to House Speaker Nancy Pelosi (D-Calif.), then-Rep. Meadows affirmed:

“As Congress considers the issue of surprise medical billing, we urge you to reject proposals that offer government-dictated price controls as a solution to the problem. Specifically, surprise medical billing proposals that give the federal government the power to set rates between two private entities — insurers and health care providers — could have a devastating impact on our constituents.”

As I’ve written, surprise medical bills are charges that patients receive for unscheduled or emergency services from out-of-network providers that insurance companies choose not to pay or negotiate away ahead of time. Often, patients receive the treatment but are unaware that these services will be handled differently until the bill comes to them later — thus the “surprise.”

Meadows’s previous criticism was spot on. Government price controls have a history of negative results, even if unintended. Regarding surprise bills, the impact on patient access to medical services would hurt all patients, and especially the most vulnerable populations. This would be bad in normal circumstances, but it is even worse given the coronavirus pandemic.

Price controls, like ObamaCare, would again tip the law in favor of big insurance companies. Insurers would have no incentive to renew contracts for doctors who are paid above in-network rates. And as the process continues, payments to doctors would keep decreasing. Insurance profits would not 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 could lose access to medical providers.

Underserved communities — reeling from COVID-19 in terms of both health concerns and the related economic damage — would be especially hurt by government price controls. 

The Harvard Center for Population and Development Studies reports that Latinos ages 35 to 44 have a COVID-19 mortality rate nearly eight times higher than Caucasians in that age group. Latinos ages 25 to 34 and those 45 to 54 have a mortality rate from the virus at least five times higher than non-Hispanic whites. Similarly, the Centers for Disease Control and Prevention found that Blacks and Latinos with the virus are hospitalized at nearly five times the rate of non-Hispanic whites.

If this were not enough, Hispanics, like all Americans, almost certainly will see their health insurance premiums rise yet again next year. Incredibly, one analysis predicts premiums could spike 40 percent in 2021.

Even Al Sharpton, usually no fan of free-market policies, singled out the threat that price controls would have on the Black community, saying in a recent speech that this such legislation “needs to be defeated and replaced with something that would protect the underinsured and those with no insurance at all.” 

None of this takes away from the need to address surprise medical bills, to be sure. There is broad consensus in the health care space that surprise medical bills are an issue that must be dealt with. 

But with such major implications for health care delivery and patient access, surprise medical bills need to be addressed by and debated in Congress, preferably as a stand-alone issue through regular order, and after our health care system at least turns the corner in dealing with the pandemic. The issue should not be tied to COVID-19 relief when there are so many pressing priorities that lawmakers evidently want to bundle together in another relief bill. 

Such an approach at least would provide for a robust debate about how to address such a crucial need in ways that are constructive and would keep the best interests of patients in mind. Any attempt by Congress before its August recess to sneak in a phony “fix” for surprise medical bills that uses price controls must be resoundingly rejected.

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.