Health & Social Policy Politics and Governance

Consumer Protection in Healthcare is the Next Wave After King v. Burwell

The partisan divide on many aspects of healthcare reform is often obvious, particularly in Texas. This was yet again on clear display during the October 17 panel “After King v. Burwell, Now What?” at the fifth annual Texas Tribune Festival. And yet, even as panelists engaged in predictable topics of debate, some signs of bipartisanship ultimately emerged. This was all the more impressive considering the diverse makeup of the panel, which included Michael Burgess of the US House of Representatives; Spencer Berthelsen, formerly of the Texas Medical Association; Anne Dunkleberg of the Center for Public Policy Priorities; and Arlene Wohlgemuth of the Texas Public Policy Foundation.

There is perhaps no more tense a disagreement between political parties than the debate over Medicaid expansion. Republicans in the Texas legislature agree with Democrats that there is a need for increased access to healthcare among low-income individuals, but they chafe at the notion of accepting federal funding through Medicaid expansion. Instead, they argue the state should be entitled to federal block grants – a kind of “no strings attached” set-up that allows lawmakers to use would-be Medicaid funds to create alternative avenues to healthcare. In particular, Republican lawmakers in the state want to use this money to subsidize privately purchased insurance for the poor, effectively pushing the Medicaid population into the marketplaces set up by the Affordable Care Act (ACA). Sliding scale fees promote accountable use of healthcare, they argue, and the privatized system adds flexibility for consumer choice. For their part, Democrats like to point out the missed opportunity for significant economic stimulus that Medicaid expansion as outlined under the ACA would have provided to the state. And even sliding scales, they claim, can be unduly burdensome for the poorest.

However, perhaps it goes without saying that Medicaid expansion, or any of its plausible variants, is hardly the next big thing for Texas (at least in the near term). Tired disagreements aside, one growing issue seems to produce a rare and satisfying unity: the need for increased consumer protection in healthcare.

Anecdotes abound surrounding the opacity of the American healthcare system. One issue is that it can be perplexingly difficult to find out which doctors are in a given insurance network, particularly when it comes to major hospitals. For example, an insured person might seek treatment at an in-network hospital, justifiably assuming they will be billed at in-network rates, only to be treated by a professional who is – unbeknownst to them – an out-of-network doctor. The result is an unpleasant surprise when the patient receives a bill. These consumers did their best to play by the insurer’s rules, only to be blindsided with steep, out-of-network medical costs.

Fortunately, consumers recently received a notable victory in this regard. Last session, the legislature capitalized on bipartisan support to pass SB 481. With the passage of this law, patients with medical bills in excess of $500 that result from surprise out-of-network treatment can request mediation on the charges.

But an incredible amount of work remains to increase the transparency of the American healthcare system at large. Several audience members at the panel served as unfortunate illustrations of the inscrutable medical billing practices so many patients face. One audience member lamented that, despite her best efforts and training as an attorney, she could not discern the costs associated with her mother’s ongoing hospital care. “I can’t find out how much a day in the hospital costs,” she said. “How hard is it to force providers to offer price transparency?” Another woman told the story of her trip to the emergency room following a motorcycle accident. In the eight months since her treatment she had not received a single bill, leaving her to continually wonder about the cost of her care and the possibility of impending financial woe.

Consumers are right to be outraged by a system that, whether intentionally or not, obfuscates pricing. Without transparency, hospitals have the ability to charge high rates without justification, and they can do so only after services necessary to save a consumer’s life have been rendered. This absurd system is the topic of a recent book called America’s Bitter Pill by journalist and Yale Professor Steven Brill. In the book, Brill conducts a remarkable interview with the CEO of United Healthcare, Stephen Hemsley. When Brill confronts Hemsley with a single medical bill, the CEO admits he can’t explain it. Apparently, even the highest-ranking officials in the health insurance industry don’t understand how medical pricing works.

Congressman Michael Burgess responded to the stories told by the audience members by pointing out that the ACA was a missed opportunity for consumer protection. According to the Congressman, the ACA originally had more consumer protection reform embedded within the law before these provisions were ultimately stripped out. “There is an enormous amount of value in opacity”, he added, “and there are powerful interests aligned against efforts to make healthcare more transparent.”

Spencer Berthelson agreed with the Congressman, pointing out that demand from consumers will be critical if the status quos of the healthcare industry are to be overcome. “Healthcare won’t change on its own. We need demand from the people,” he said.

Edited by Mariam Ahmed

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