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AHIP Criticizes 'Exorbitant' Out-of-Network Charges
Jon Skinner, a healthcare economist at Dartmouth College, says he believes that "some truly high payments are floating around." He noted similar findings in other studies, most recently a July 19 report by Health Reform Watch at Seton Hall University's School of Law, Health Law & Policy Program.
"The question of what providers charge is of course very, very important for the overall costs of healthcare," Skinner says. "However, I do not think that high prices charged by out-of-network providers are a large factor in why healthcare costs are so expensive. It is symptomatic of a more general problem with U.S. healthcare—the lack of information about and attention to prices."
The survey's release comes at a time of high anxiety for the health insurance industry, which has been the focus of sharp criticism from the Obama Administration. The industry strongly opposes Obama's call for a public plan to compete with private insurers, which Obama says is needed to keep private insurers "honest." Private plans, however, say they would be placed at a competitive disadvantage.
On Tuesday, the president blamed reform critics for mischaracterizing the public plan as a government takeover. "This is not about putting the government in charge of your health insurance. I don't believe anyone should be in charge of your health insurance decisions but you and your doctor," he told the crowd. "I don't think government bureaucrats should be meddling, but I also don't think insurance company bureaucrats should be meddling. That's the health care system I believe in."
Sounding like a consumer activist, Obama told the crowd that stronger oversight of the private healthcare sector is needed "just make sure that private insurers are treating you fairly so that you are not buying something where if you failed to read the fine print, next thing you know, when you actually get sick, you have no coverage."
"Under the reform we're proposing, insurance companies will be prohibited from denying coverage because of a person's medical history. Period," the president continued. "They will not be able to drop your coverage if you get sick. They will not be able to water down your coverage when you need it. Your health insurance should be there for you when it counts—not just when you're paying premiums, but when you actually get sick. And it will be when we pass this plan."
John Commins is an editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
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turntostoneblog (8/19/2009 at 11:52 AM)
see also http://www.dailykos.com/storyonly/2009/8/17/768381/-AHIPs-Latest-Insult-to-Our-Intelligence.
Mac McCarthy (8/14/2009 at 10:59 AM)
Mr. Emkes is right that the insurers will only pay what they determine to be the "usual and customary" allowance, which is far less than these amounts. But that simply lays the burden for the balance on the patient! There are often legitimate reasons to use out-of-network providers, such as emergencies or network inadequacies. We have laws that prohibit price gouging for necessary goods and services when individuals are exceptionally vulnerable (for instance, ice and gasoline followng natural disasters). Similar principles should be brought to bear for medical provider fees -- especially since these charges are rarely disclosed up front.
Bernard Emkes (8/13/2009 at 10:56 AM)
Once again, AHIP has stirred up an issue and muddied the waters. Charges are almost irrelevant in today's health care markets. Health plans agree to pay fixed prices for services or some percentage of charges. In the latter case, charges do have some relevance. For out-of-network care, most if not all plans revert to "usual and customary". In my experience, no plan pays the "charges" as described in the example. To compare Medicare allowed payments to physician charges is apples to oranges. What Medicare considers a "fair payment" has NOTHING to do with physician charges. Most physicians feel there is little relation to payment by the government systems and the value added to patients' lives by the provided services. Medicaid payments rarely if ever cover the costs of care for either hospitals and physicians.