Americans are struggling with medical bills. This news is from charities that assist patients with medical bills. Critics point to President Trump’s One Big Beautiful Bill as exacerbating the problem. They argue cutting Medicaid eligibility and not extending the enhanced subsidies for Obamacare as raising costs for some Americans. Even with insurance medical bills strain budgets. The following is from Politico:
“Our organization can’t really handle much more demand,” said Michael Sapienza, chief executive of the Colorectal Cancer Alliance, which helps patients pay for colonoscopies, tests and cancer treatment.
Financial assistance from the HealthWell Foundation, one of the largest charities in the country, is already 23 percent higher this year than all of last year. Requests swamped the fund it launched this month to help consumers offset higher Obamacare premiums that are likely if the subsidies expire, prompting it to stop taking new applicants after just two days. The Colorectal Cancer Alliance has seen a 26 percent increase in requests year-over-year, and CancerCare, another charity, has seen a 10 percent increase in year-over-year requests.
It is hard to know whether reports like these are more than political rhetoric, and to what degree the problem has gotten worse (apart from politics). Regardless, medical bills are a severe problem for many Americans and price gouging is common. Kaiser Family Foundation (KFF) reported on a 39-mile ambulance ride that cost one family $9,000. In another example, a woman was charged $21,000 for rabies shots. A few years ago a Texas woman got a $17,000 surprise medical bill from a lab for drug testing that should have cost less than $100. A man in New York got a surprise bill for $117,000 from an assistant surgeon, who Medicare would only have paid $850. None of these price gougers faced any consequences. KFF tracks outrageous medical bills that would be considered fraud in other industries. For example, a tow truck owner in Pennsylvania was recently convicted of fraud for egregious charges for towing:
The owner of a towing company in Pittsburgh pleaded guilty to felony charges after inflating prices to extraordinary levels for customers.
According to the Pennsylvania attorney general, 57-year-old Vincent G. Fannick participated in “predatory” towing practices that involved “astronomical bills” for short tow trips.
Some vehicle owners’ insurance companies were charged between $9,460 and $13,105 for single short-trip tows.
There are numerous other factors that make it difficult for health care consumers. There is no price competition. There is little price transparency. Hospitals go out of their way to obscure prices and when they do display prices it is often in ways that are purposely ineffective.
What can be done to reign in prices? Subsidies are not the answer unless your goal is to raise costs. Considering what is at stake it makes one wonder why Congress does not enforce The Golden Rule. That is, he who has the gold makes the rules. Hospitals routinely engage in anticompetitive behavior but suffer no consequences despite the government paying much of the cost. Law professor Barak Richmond has said an area of contract law, called mutual assent, could be used as a defense against surprise medical bills. Contract law could possibly be used as a defense against price gouging where prices were not transparent. However, lawsuits are costly and consumers often lose. Congress could certainly reinforce consumer protection laws.
One potential method could be to only provide subsidies for health plans that feature consumer tools like reference pricing and / or exclude hospitals that refuse to provide consumer prices. Another suggestion is medical courts with binding arbitration to adjudicate consumer disputes. An overriding problem is that most care is provided for people too sick to shop. About half of medical expenditure is on a mere 5% of people. Probably the biggest reason medical prices rise is because we collectively tolerate it.
Read more at Politico: Americans are buckling under medical bills. It could get worse.
Thanks for including my article friom the Health Care Blog a few years ago!
Nothing much has changed. An essentially irreducible number of Americans will get seriously ill or have a serious accident every year. If they are over 65 or have Medicaid or have good employer coverage, the bills will be paid with a minmum of fuss.
At one of the Republican conventions, Ron Paul was asked what he would do if one of his aides had an expensive illness but no insurance coverage. His response was “Tough bounce, he should have planned better,” or words to that effect.
Maybe Ron was a secret Darwinist, hoping that careless poor people would die out and we would be left with the Amish.
The current Republicans are not wrong to try and reduce our hideous budget deficits. I just think they are starting in the wrong place by cutting ACA subsidies by $35 billion a year. It’s not a huge amount by federal standards, and rural hospitals will feel it immediately.