One of the major criticisms of Obamacare has been that it does little to address the soaring costs of health care. A new report helps explain why those costs are so hard to pull down -- and offers a glimpse of what we might do about it.
Why should we care about the exorbitant costs being charged by out-of-network health providers? Because the charges drive up the cost of care for the rest of us. They're a major reason health care companies continue to raise premiums.
Just because Congress passed the Affordable Care Act in an acrimonious debate in 2010, and the U.S. Supreme Court upheld a key tenet last year, doesn't mean the work on health care is over. Costs and affordability demand much more action from Congress.
The national survey, released Friday by America's Health Insurance Plans, a trade association, found that charges billed by some out-of-network providers are several hundred to several thousand percent higher than what Medicare would pay for the same services. And Medicare would have covered all or portions of the costs under their plan rules.
For example, the report cited a $12,000 charge for a tissue examination for which the usual Medicare fee is $128. It cited a $115,000 bill for a lumbar spine infusion; Medicare usually pays less than $2,000 for the same procedure. The Los Angeles Times reported last week that a surgery center in Southern California tried to charge $87,500 for a routine, 20-minute knee surgery that normally costs $3,000. In that case, the patient, a retired school teacher, sounded the alarm and notified the state Attorney General's office. The surgery center eventually lowered the bill by more than $60,000, to $15,000.
Doctors and other providers have disputed the report, contending that out-of-network care comprises a small percentage of total health care costs. The vast majority of care is usually provided in-network. But that hardly suffices as an excuse given the swift rise in health care spending in the past decade. Every little bit counts. And when the prices being charged are so outrageous, it's hard to ignore. Comparing costs to typical Medicare payments for certain procedures isn't completely fair: Medicare rates are notoriously low. But many of the bills charged by these out-of-network health providers dwarf even normal rates paid by commercial insurers.
More recently, many insurers have started pushing back on insanely high out-of-network charges, with some success, negotiating to pay lower rates. However, insurance companies are also coping with the high costs in other ways, including forcing consumers to pick up more of the tab for out-of-network services. This has left some insured patients on the hook for tens of thousands of dollars in medical expenses. And in some cases, consumers don't even know beforehand that a provider is out-of-network. For example, the customer goes to an in-network hospital for care but is treated by an out-of-network surgeon. Surprise!
The practice of foisting these costly mark-ups on consumers seems to have been missed by health care reformers. It's never too late to inject a bit of logic and fair play into existing law. There's no justification for the ongoing gouging of health insurance companies and their customers. If members of Congress truly care about bringing down the cost of health care, they should act to address this problem.