Donald Trump has nominated Tom Price, a “Tea Party" Republican Congressman from Georgia, as Director of the Department of Health and Human Services, the Federal agency that oversees Medicare, the nation’s largest and longest surviving health insurance program, serving those over 65 years of age, and those with disabilities.
Like nearly all of Trump’s nominees, Price is overtly hostile to the agency he has been designated to lead. His nomination was supported by the American Medical Association (AMA) because, contrary to what many Americans may believe, the AMA is traditionally a Republican- leaning organization made up of nearly a quarter of a million physicians whose financial interests are one of its primary motivators. In particular, both Price and the AMA are on the same page when it comes to a practice known as “balance billing."
It's the practice of billing the patient for the difference between the sticker price and what insurance will pay. So if a hospital visit costs $1,000, but your insurance will only cover $300, some providers will "balance bill" you for $700.
“Balance billing” is commonly seen in private employer-based insurance plans when a patient uses an “out of network" provider. The practice, however, is partially restricted under the Affordable Care Act (which both Price and Trump have vowed to eliminate), and is essentially illegal under Medicare:
Under current law, Medicare has several financial protections in place that are designed to safeguard Medicare beneficiaries—seniors and people with permanent disabilities—from unexpected and confusing charges when they seek care from doctors and other practitioners. These protections include the participating provider program, limitations on balance billing, and conditions on private contracting.
A Kaiser study showed that one-third of people reporting difficulty paying their medical bills had been blindsided by the “out of network" charges imposed by hospitals and physicians. An overwhelming majority of those people had no idea they were being treated by an “out of network” provider. An example is when the hospital employs an “out of network" surgeon; this commonly occurs in emergency room treatment, for which the patient is essentially required to accept whatever care is available, or go untreated:
In 2011, the New York Department of Financial Services studied more than 2,000 complaints involving surprise medical bills, and found the average out-of-network emergency bill was $7,006. Insurers paid an average of $3,228 leaving consumers, on average, “to pay $3,778 for an emergency in which they had no choice.”
Tom Price wants to “reform” Medicare by allowing “balance billing” of Medicare-eligible patients by doctors without requiring them to exit the Medicare program entirely, the practical effect of which, as Ryan Cooper, writing for The Week explains, would “[allow] doctors and hospitals to devour the nest eggs of thousands of American seniors:”
Permanently obliterating the financial security of helpless families with no or bad insurance as a loved one dies slowly and painfully of a chronic illness is a nice little profit center for providers. But it pales in comparison to the gravy train they might get if they can bring balance billing to Medicare.
Physicians For a National Health Care Program describes the practical implications of the Price proposal:
Even though we often hear threats that physicians will stop seeing Medicare patients, most really can’t afford to give up their Medicare revenues, and, besides, too many Medicare beneficiaries do not have adequate resources to pay large medical bills in full. The current law provides leverage to ensure that physicians will be there when Medicare patients need them.
The [Price] legislation would no longer require physicians to exit the Medicare program entirely should they enter agreements to independently bill the patients for the balance of their fees. Also Medicare would still have to pay the allowed charges. As a further insult, the physician can require the patient to do their own Medicare billing. The physician gets the full fee, in cash, including the disallowed charges, and the patient has to do the paperwork.
PNHP also notes there would be no limit on prices medical providers choose to “negotiate” with otherwise Medicare-eligible patients under the Price plan.
Cooper observes that 55 million Seniors, many with significant retirement savings, provide a perfect target for medical providers to exploit. In 2011, Tom Price, Trump’s now-designated overseer of Medicare introduced a “Medicare reform" package designed to do just that. It received the AMA’s imprimatur of approval, since it allowed physicians to require their patients to pay the full balance of their unrestricted fees, even if far in excess of Medicare allowable charges, thus benefitting the physicians and providers that organization represents.
In 2011 we had a President Obama to assure such a plan to bankrupt Seniors through onerous medical bills would go nowhere. And many physicians, even some within the ranks of the AMA, are vehemently opposed to it.
But with Trump’s hand-picked man at the helm of HHS and a willing Republican Congress eager to dismantle Americans’ so-called “entitlement" to medical care, there is no reason to believe this scheme will not be enacted. While physicians would be constrained by the fee agreements they made with patients, the gross disparity of bargaining power between a sick elderly patient and one of the most powerful lobbies in the country is plain. As Cooper notes:
[T]hose contract prices are guaranteed to be vastly higher than what Medicare pays now. It will be akin to seeing an out-of-network provider on private insurance now, something that causes thousands of bankruptcies today.
“Balance billing” would be the first step toward the destruction of Medicare as we know it. It's not “health insurance" if obtaining appropriate medical care ends up risking your entire net worth, your retirement hopes, and anything you might want to leave to your children.
A practical guide to resisting Trump, his appointees, and his agenda, authored by former Congressional staffers, can be found here.