Rep. Phil Roe (TN-01), sworn public enemy of the Affordable Care Act, has emphasized his goal of eliminating requirements that insurance cover certain minimum required services. Instead of a system of standardized plans and minimum benefits, Roe trumpets the rhetoric of “freedom of choice” and insists that, above all, people should be able to “shop for coverage.”
In truth, Roe’s high-sounding “freedom of choice” is an illusion, another economic magic show. As a physician, Roe should know that healthcare does not operate as a fair or rational marketplace. Sellers of medical care generally have the upper hand. Indeed, I have been told by those with first-hand knowledge that in Roe’s own past medical practice, prospective patients did not get an initial appointment until their financial bona fides had been proven in advance to his satisfaction.
Roe also misunderstands the nature of insurance, which operates by spreading and generalizing risks, not by carving policy coverages into personalized tranches based on idiosyncratic individual choices.
Moreover, if Roe got his way, it wouldn’t help much because the current system still makes it very hard for ordinary people to get information needed to be intelligent medical care shoppers.
Unless you have a top-shelf gold-plated insurance plan:
- you are at risk from inflated fees for healthcare services;
- you are at risk from the financial secrecy that prevents you from knowing the prices of care in advance; and,
- you are at risk from the costs of what is not covered pursuant to your plan’s fine print and idiosyncratic list of exclusions, all of which which you may not be able to understand until it is too late — after you have submitted a claim and it has been denied.
Consider, for example, this recently reported case of a $5000 ice pack:
On October 19, 2016, Jessica Pell fainted and hit her head on a nearby table, cutting her ear. She went to the emergency room at Hoboken University Medical Center, where she was given an ice pack. She received no other treatment. She never received any diagnosis. But a bill arrived in the mail for $5,751.…..
Pell left the ER when she discovered the plastic surgeon who would see her was out of network for her insurance. She decided to go to an in-network facility instead. She thought this was a smart way to avoid the costly fees that came with seeing a provider that wasn’t included in her health plan.
“I decided to decline treatment because I can’t really afford any surprise bills right now,” she said. “The bill I’d probably incur would not be worth saving my ear, which was sad but a choice I had to make.”
Pell’s health insurance plan paid the hospital $862, what it deemed a “reasonable and appropriate” fee ... that left Pell with a $4,989 bill … “There was no way for me to have avoided this bill, to have known what I would have been charged,” Pell says.
Or consider the case of Kentucky resident Brittany Cloyd, who had a similar unpleasant surprise when she found herself on the hook for a $12,596 emergency room bill because her insurance company decided, after the fact, that her acute abdominal pain didn’t meet criteria for coverage:
Cloyd came in [to the ER] after a night of worsening fever and a increasing pain on the right side of her stomach. She called her mother, a former nurse, who thought it sounded like appendicitis and told Cloyd to go to the hospital immediately …
The doctors in the emergency room did multiple tests including a CT scan and ultrasound. They determined that Cloyd had ovarian cysts, not appendicitis. They gave her pain medications that helped her feel better, and an order to follow up with a gynecologist.
Cloyd has her health insurance coverage through her husband’s job. His company uses Anthem, one of the country’s largest health insurance plans. In recent years, Anthem has begun denying coverage for emergency room visits that it deems “inappropriate” because they aren’t, in the insurance plan’s view, true emergencies.
The problem: These denials are made after patients visit the ER, sometimes based on the diagnosis after seeing a doctor, not on the symptoms that sent them, like in Cloyd’s case.
Or — imagine the California family of three-year-old Elodie Fowler that had insurance and tried to research and predict prices for an imaging procedure, but was still slammed with an astonishing and financially crushing medical bill. On September 28, 2016, Elodie underwent an MRI scan at Lucile Packard Children’s Hospital in Palo Alto, California. The test took about 30 minutes.
Fowler’s parents knew the scan might cost them a few thousand dollars, based on their research into typical pediatric MRI scans. Even though they had one of the most generous Obamacare exchange plans available in California, they decided to go out of network to a clinic that specialized in their daughter’s rare genetic condition. That meant their plan would cover half of a “fair price” MRI.
They were shocked a few months later when a bill arrived with a startling price tag: $25,000. The bill included $4,016 for the anesthesia, $2,703 for a recovery room, and $16,632 for the scan itself plus doctor fees. The insurance picked up only $1,547.23, leaving the family responsible for the difference: $23,795.47.
“I honestly thought it was a mistake,” Elodie’s mother, Annie Nilsson, says of receiving the bill. “There is no possible way anyone could be charged that much for one scan that took 30 minutes.”
Nilsson’s instinct — that these scans should cost a couple thousand dollars — was right. The cost of the same image at other California hospitals is significantly lower. And there was a huge gulf between what the insurance company thought was a “fair price” and what the hospital thought was a “fair price.”
Several years ago, I avoided what could have been a similar experience. I was covered by Blue Cross/Blue Shield of Tennessee under a medical insurance contract that promised to pay 80% of “usual and customary charges.” When a potentially expensive outpatient test came up for discussion I called the hospital and asked what the price would be, so that I could calculate my 20% portion of the cost. I was told to have the procedure first, and then the hospital would send me a bill. When I insisted on knowing cost in advance, and reiterated my request up the administrative hierarchy, the same answer was repeated until I eventually reached a supervisor who confessed that the price information I sought was proprietary data that was confidential pursuant to the hospital’s contract with Blue Cross/Blue Shield.
Frustrated, I then called Blue Cross/Blue Shield, identified myself as a policyholder, and asked for the maximum allowable “usual and customary” charge for the medical procedure in question. Blue Cross initially tried to tell me they didn’t know. I knew this could not be true, and again starting working my way up the supervisory food chain, I eventually — and incredibly — got the same answer. The amount I would have to pay as my responsibility for the procedure was confidential proprietary information until I actually had the procedure and a bill was submitted and either approved or denied.
In any other line of business, people would laugh at the absurdity of keeping a key financial metric of a contract secret from a party to the contract. But in health care, such ridiculous nonsense may not even raise an eyebrow because it has become just business as usual.
Interestingly, if I had Medicare, the cost would have been clear and transparent, because Medicare-approved prices are posted on-line.
If Rep. Roe has his way, we will have something that he calls “freedom of choice.” But, we will continue to obtain healthcare at our financial peril in a tyrannical and one-sided economic system that makes a mockery of the idea of “marketplace.”
Roe fails to understand that the cost of insurance is not the problem — the real underlying issue is the insane pricing of medical care, which some researchers have identified as the leading cause of bankruptcy in the U.S.
Roe’s proposed freedom to “shop” for insurance ignores the root problems that keep too many families just one medical bill away from financial disaster. Until he sees that his proposed fix doesn’t address what is really broken, this Congressman will continue to be just one more Healthcare Emperor Without Clothes.
If you agree that it’s time to help Rep. Roe keep his original term limit promise and retire, you can make your views count by sharing and following this ongoing blog and by supporting Dr. Marty Olsen, a refreshing Democratic alternative, here: Responsible Change.
Update:
Oh yeah, and don’t forget to vote.