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Opinion

Surprise Medical Bills can be Solved by Competition - Not Federal Fiat

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Posted: Mar 22, 2019 12:01 AM
The opinions expressed by columnists are their own and do not represent the views of Townhall.com.
Surprise Medical Bills can be Solved by Competition - Not Federal Fiat

Source: AP Photo/Rick Bowmer

The issue of surprise billing may be driving a wedge between healthcare stakeholders, as reported earlier this week - but as battle lines harden, voters are counting on Congress not to rush in for a quick fix that’s proven ineffective in the past.

Payers and providers alike, everyone’s been tasked with finding a solution. A top White House policy adviser recently warned hospitals that they need to address the issue of surprise medical bills if they don’t want Congress to do it for them. The White House official stated that, “You have to come up with a solution, or bad things could happen because you’ll have policymaking being made by people that don’t understand the system nearly as well as you.” Americans across the country should take this as a warning as well; the threat of government rate setting for the private health care market is real and growing.

The practice of balance billing, or "surprise billing" as its recently been framed in the media, is nothing new. When you receive care at a hospital, the hospital sends the bill to your insurance company and then sends you a bill for the remaining amount that your insurance company refuses to cover. That has been the process for decades, but with the passage of the Affordable Care Act, the insurance market has drastically changed.

Just yesterday, a coalition of health insurers urged Congress to act before the hospitals have a chance to answer the call for a solution. In a letter to congressional leadership, the group representing insurance interests asked congress to intervene and set reimbursement rates for certain types of care before the end of the year. If the insurance companies get their way, it would open the door to a level of government price-setting never proposed before, while doing little to solve the surprise billing problem.

In spite of ever-increasing premiums, insurance companies are raising deductibles, requiring patients to pay more out of pocket and cherry-picking covered services, doctors, and locations when defining what is considered your in-network options for care – sometimes even deciding that a hospital qualifies as in-network but its emergency physicians do not. As health plan networks have grown increasingly narrow, limiting patient access to in-network providers, the end result is a fractured healthcare system that has caused the incidents of balanced billing to skyrocket, and along with them – calls for action in Congress.

There are several legislative solutions being considered. All of the proposals would cap the amount that patients have to pay, but the key question then is how much the insurer has to pay the doctor or hospital, and who will have the power to determine the rate. The GOP-led surprise billing proposal may leave conservatives in Congress with a sense of Obamacare déjà vu.

Sens. Bill Cassidy (R-La.), Michael Bennet (D-Co.), and Maggie Hassan (D-N.H.) believe the federal government should be granted rate-setting power and are expected to release legislation designed to curb “surprising billing” by federal fiat later this month. The bill, which will take significant language from Sen. Cassidy’s “Protecting Patients from Surprise Medical Bills Act” from the previous Congress, would do nothing of the sort, and only succeed in keeping prices appear temporarily low on paper in the short term, but with significant costs cropping up elsewhere.

The lawmakers have gathered feedback from industry groups and are now figuring out the details of a revised bill, but they need look no further than the Obamacare exchange market to see the old idea of government-set rates won’t work. Placing government in the middle of payment negotiations between the health care providers and the insurance companies did not work to curb health care costs on the Obamacare exchange and every American is suffering the consequences – increased premiums and deductibles, surprise medical bills from narrow insurance networks, decreased patient choice, and limited access to care.

In 2017, 68 percent of healthcare plans in the exchange market offered restrictive networks, compared with 48 percent in 2014 and the average ACA exchange market premiums increased 28percent from 2014 to 2017.

Government forcing this failed approach in the private market will further distort the market and do little to protect Americans from rising health care costs or the limited coverage networks driving the increase in surprise medical bills. Instead of pursuing half-measures rife with unintended consequences, policymakers should look toward genuine, market reforms that would hold insurers accountable to consumers.

As lawmakers work to finalize their surprise billing proposal, Republicans shouldn't wait for a bill introduction to begin protecting what little liberty remains in the private healthcare market - the time is now to declare any bill that gives government rate-setting power dead on arrival.