The list of problems caused or made worse by Obamacare continues to lengthen; higher health insurance premiums and loss of options for consumers top many of the lists of such ills compiled by health care experts. One of the lesser known problematic consequences of the former president’s prime legacy, however, has been thrust into both public policy and budget debates in this election year: “Surprise Medical Billing.”
A “Surprise Medical Billing” is a charge for a medical procedure performed on a patient by a physician or other health care provider who happens not to be a member of the provider network covered by the patient’s insurance policy (in other words, the doctor is “out of network”). These medical procedures often are related to emergencies, in which the patient requires care but in circumstances in which he or she has no control over who actually performs the medical services. Because the physician is not “in-network” with the patient’s insurance plan, the fees for services are not covered by the insurance company, and the patient receives a bill — sometimes a very hefty bill that was not anticipated (hence, “surprise”).
At its core, the problem of surprise medical billings results from the manner by which insurance companies define the “network” of health care facilities and providers which they will cover for individuals who are members of their plans. This necessarily directs individuals covered by a company’s plan to use the facilities and providers that are “in network,” so that the insurer pays for such charges (at rates they negotiated), and not the individual consumer. Such insurance gerrymandering is not really a new problem but has been exacerbated in the half dozen years since Obamacare went fully operational in 2014.
Many of the circumstances in which Surprise Medical Billings occur are those in which neither the patient nor the physician (called on to perform serious, perhaps life-saving services) is at fault. In a sense, both patient and doctor are “victims” of being gerrymandered out of the market-based process in which a patient contracts with a doctor knowing that the costs will be covered by their insurance or, if not, expressly agreeing to pay the resulting charges.
Not surprising, many Surprise Medical Billing horror stories have come to the attention of lawmakers in Washington, who are more likely to jump to a knee-jerk response in an election year than in odd-numbered years.
It is here, in the nation’s capital, where the heavy hand of price controls threatens to seriously disrupt the health care sector and move us ever closer to the “single payer” model favored by Democrat presidential candidates Bernie Sanders and Elizabeth Warren. Helping to push that door even wider is the fact that a number of Republican lawmakers in both houses of Congress are supporting such legislation.
Bills now being considered by key House and Senate committees would give the federal government the power to decide how much a “Surprise Medical Bill” should be and who should pay it. Whether such calculation is based on “benchmarking” or averaging charges for the out-of-network procedures, or by forced arbitration, the results further skew health care costs that are already overly complex and detached from market forces. Any resolution of the problem must be undertaken far more deliberately than by sticking a proposed “solution” into a must-pass budget bill in the thick of a national election, with little if any consideration of the ultimate cost or of the precedent being set.
Moreover, it is not as if individual states are sitting back and doing nothing with regard to this problem for patients and doctors within their borders. The legislature in my home state of Georgia, for example, right now is working to set parameters for resolving such billing disputes at the state level. Other states are proceeding similarly.
While there are limits to how far state-level solution can go (states cannot on their own, for example, amend policies covered by federal “ERISA” laws), it is better for them to address the problem as far as possible; and then and only then — free from the political hazards of a looming national election, and bearing in mind that federal price controls never have worked out well — turn to the Congress to address any essential remaining federal problems.
Bob Barr represented Georgia’s Seventh District in the U.S. House of Representatives from 1995 to 2003 and currently serves as President and CEO of the Law Enforcement Education Foundation.