The GOP and socialized health care

Maybe the heat in Washington is getting to the politicians this year.  Some Republicans are starting to support populist policies that just a few years ago they would have ridiculed then–Senate majority leader Harry Reid for even considering.  The Left has decided that almost their whole party is going to run for the office of president.  With the Left controlling the House and the right controlling the Senate, frustration seems to be everywhere — which means that the perfect storm for a liberty-stealing compromise also seems to be brewing.  The faster that August break can get here, the safer will be our liberty, health, and pocketbooks.

One of the possible compromises is taking shape with an issue referred to as "Surprise Medical Billing."  Back in May, President Trump called on Congress to remedy the problem of unexpectedly high charges insured patients can face when a member of a medical team that treats them is not in their insurer's network.  Though it's a relatively rare occurrence, the prospects of it happening to them has consumers frightened out of their wits.  The anecdotal evidence highlights unanticipated bills amounting from thousands to tens of thousands of dollars for which the patient is held liable.  That's a scary proposition for most, and, as we all are too well aware, humans are hardwired to fear the improbable.  Though the majority of Americans polled on this worry they'll get a surprise bill, only three percent ever have.

But populist demands often result in populist solutions, and members of both parties have obliged, releasing several bipartisan proposals and discussion drafts.  As is often the case when both parties agree on a solution, the result is a blunt-force effort, ill conceived and crafted without sufficient regard to downstream consequences. 

The leading Senate proposal, put out by Health, Labor, and Pensions Committee chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.), states that out-of-network providers are to simply receive no more compensation than in-network providers do for their services.  For all intents and purposes, this is a simple price-capping scheme and should be opposed.

But this is Washington — so the sponsors have attempted to finesse their price-capping scheme.

Lawmakers have tried to avoid the problems of traditional price-setting plans by pegging allowable fees to an index of what would be a "market" rate or some average of what is being charged locally for the same services.  A singular problem with this approach is that whatever stated price exists isn't connected to what people actually pay.  The effects of hidden rebates, volume discounts, and simple favoritism will be folded into yet another layer of complexity for unsavory actors to exploit, and patients will not likely be on the winning side of this equation.

Statutorily capping reimbursements is a blunt-force intervention into markets.  Republicans and those who recognize the benefits of price competition ought not to be defending this option.  Plus, any new problems cropping up in this fragile health care ecosystem will only help clear the decks for a policy objective Republicans otherwise oppose: Medicare for All.

They didn't do a very good job of finessing their scheme.

So what should Congress do, and what could a Republican support?  First, before taking up the broad brush of regulation, Congress should step back and gather more data on this problem.  Why doesn't the health care market work like other markets?  Why do these bills exist, and who are the players?

The statistical evidence shows that relatively few Americans are at risk for this type of billing, and it may even be happening in just a handful of localized jurisdictions.  States, charged with regulating insurance carrier rules, are already acting to address it, and Congress should consider what remains after analyzing the result of those efforts.  Then Congress should address what the base issues are in the market — the payer of health care bills is rarely the patient.  That means that transparency at the point of service isn't as important to the service providers as it is in other markets — as in buying a car.

Federal interventions in health care insurance markets have been largely a disaster, and great caution should be exercised in trying to remedy problems of their own creation.  Right-thinking Republicans should do what they've always done: support initiatives that allow more consumer choice, more transparency, and more market competition.

Peter Russo is a Republican political consultant and strategist.

Maybe the heat in Washington is getting to the politicians this year.  Some Republicans are starting to support populist policies that just a few years ago they would have ridiculed then–Senate majority leader Harry Reid for even considering.  The Left has decided that almost their whole party is going to run for the office of president.  With the Left controlling the House and the right controlling the Senate, frustration seems to be everywhere — which means that the perfect storm for a liberty-stealing compromise also seems to be brewing.  The faster that August break can get here, the safer will be our liberty, health, and pocketbooks.

One of the possible compromises is taking shape with an issue referred to as "Surprise Medical Billing."  Back in May, President Trump called on Congress to remedy the problem of unexpectedly high charges insured patients can face when a member of a medical team that treats them is not in their insurer's network.  Though it's a relatively rare occurrence, the prospects of it happening to them has consumers frightened out of their wits.  The anecdotal evidence highlights unanticipated bills amounting from thousands to tens of thousands of dollars for which the patient is held liable.  That's a scary proposition for most, and, as we all are too well aware, humans are hardwired to fear the improbable.  Though the majority of Americans polled on this worry they'll get a surprise bill, only three percent ever have.

But populist demands often result in populist solutions, and members of both parties have obliged, releasing several bipartisan proposals and discussion drafts.  As is often the case when both parties agree on a solution, the result is a blunt-force effort, ill conceived and crafted without sufficient regard to downstream consequences. 

The leading Senate proposal, put out by Health, Labor, and Pensions Committee chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.), states that out-of-network providers are to simply receive no more compensation than in-network providers do for their services.  For all intents and purposes, this is a simple price-capping scheme and should be opposed.

But this is Washington — so the sponsors have attempted to finesse their price-capping scheme.

Lawmakers have tried to avoid the problems of traditional price-setting plans by pegging allowable fees to an index of what would be a "market" rate or some average of what is being charged locally for the same services.  A singular problem with this approach is that whatever stated price exists isn't connected to what people actually pay.  The effects of hidden rebates, volume discounts, and simple favoritism will be folded into yet another layer of complexity for unsavory actors to exploit, and patients will not likely be on the winning side of this equation.

Statutorily capping reimbursements is a blunt-force intervention into markets.  Republicans and those who recognize the benefits of price competition ought not to be defending this option.  Plus, any new problems cropping up in this fragile health care ecosystem will only help clear the decks for a policy objective Republicans otherwise oppose: Medicare for All.

They didn't do a very good job of finessing their scheme.

So what should Congress do, and what could a Republican support?  First, before taking up the broad brush of regulation, Congress should step back and gather more data on this problem.  Why doesn't the health care market work like other markets?  Why do these bills exist, and who are the players?

The statistical evidence shows that relatively few Americans are at risk for this type of billing, and it may even be happening in just a handful of localized jurisdictions.  States, charged with regulating insurance carrier rules, are already acting to address it, and Congress should consider what remains after analyzing the result of those efforts.  Then Congress should address what the base issues are in the market — the payer of health care bills is rarely the patient.  That means that transparency at the point of service isn't as important to the service providers as it is in other markets — as in buying a car.

Federal interventions in health care insurance markets have been largely a disaster, and great caution should be exercised in trying to remedy problems of their own creation.  Right-thinking Republicans should do what they've always done: support initiatives that allow more consumer choice, more transparency, and more market competition.

Peter Russo is a Republican political consultant and strategist.