by Jim Martin, Chairman
Imagine returning home from China at the height of the coronavirus outbreak, only to face a bone-chilling reality: You’re beginning to fall ill. This terrifying experience is precisely the situation Miami native Osmel Martinez Azcue found himself in just last month. Following a work trip to the illness-riddled region, Azcue started developing flu-like symptoms — many of which are shared between the common flu and COVID-19, better known as the coronavirus.
Azcue had the presence of mind to do the right thing. He checked into Jackson Memorial Hospital and alerted the medical staff that he could potentially be infected with the coronavirus. There, he was quarantined, tested and forced to wait for the results. The blood test, thankfully, provided good news. Azcue didn’t have the coronavirus; he would just have to battle the flu.
But unfortunately, he wasn’t yet out of the woods.
Two weeks following his coronavirus scare, Azcue received more bad news in the form of a surprise medical bill totaling $3,270. His insurance agreed to cover a portion of the cost, but only if he could provide three years of health records to prove his flu didn’t stem from a preexisting condition. Despite already paying a sizable $180 per month for health insurance, Azcue was still on the hook for $1,400 in unexpected medical expenses.
The worst part? Azcue’s run-in with surprise medical billing isn’t unique, and according to reports, soon his coronavirus scare won’t be, either.
Surprise medical bills are a devastating and growing trend in the United States. Most often occurring after an individual inadvertently receives emergency health care from a provider outside their insurance network, they can cripple a person’s finances by saddling them with enormous expenses. Often, these bills total hundreds, if not thousands, of dollars in unexpected liabilities. With the rise of the coronavirus, the situation is only bound to get worse.
On March 10, the White House announced that some insurance companies would waive their co-pays for coronavirus testing; however, many others have failed to make such a pledge. While the executive branch has taken steps to mitigate the situation, only Congress can rectify it entirely.
Just like the coronavirus itself, surprise medical billing is threatening to become a pandemic. But unlike the apparent inevitability of COVID-19, the surprise medical billing crisis can be stopped with the right solution.
The Lower Health Care Costs Act would attempt to solve the crisis by instituting federally mandated price controls at the insurance lobby’s behest. These “benchmarks” would cap all out-of-network rates for health-care services at their comparable median in-network rate — forcing medical facilities to charge insurance companies less.
Price caps might sound like a plausible solution, but there’s a reason why we oppose them: They never work.
Rather than solve the surprise medical billing crisis, the risk is this approach will lead to fewer doctors, fewer hospitals and lower quality of care overall. Many insurers — particularly United Healthcare, the nation’s largest private insurer — have come under fire recently for canceling many of their in-network contracts. Despite this practice already becoming a concerning trend, the Lower Health Care Costs Act would incentivize insurers to continue cutting the pricier doctors from their rolls in order to decrease the “median in-network” rate they’d be forced to pay. As a result, they would make more money, but their customers’ health-care coverage would become increasingly scarce.
Rather than impose price controls that let the insurance lobby dictate the terms, Sens. Chuck Schumer, Kirsten Gillibrand, and the rest of the legislative branch can instead let an independent arbiter look at each case situationally. The arbiter could then determine which entities — hospitals, insurers, and other relevant parties— should be responsible for financing each surprise medical bill on a case-by-case basis.
This solution has worked tremendously well for the state of New York, reducing costs by 34%, per the National Bureau of Economic Research. The federal government would be wise follow suit.
Regardless of what solution it decides on, to prevent the story of Osmel Martinez Azcue from becoming the norm, the United States must address its medical billing crisis — and it must do so in a way that puts consumers first.