OPINION

Fix Surprise Billing and Make Health Care More Affordable

Employers provide health benefits to over 181 million Americans who overwhelmingly like and want to keep this coverage. We recognize, however, that rising prices – particularly out-of-pocket prices that patients and families pay – are an increasing problem.

With the Federal Reserve Board reporting that 40 percent of Americans don’t have $400 in the bank to cover an emergency expense, it is more critical than ever that business and labor work together to do everything possible to provide affordable and comprehensive coverage, which requires us to tackle the problem of rising health care prices.

We believe a broken bone shouldn’t break the bank, but for too many of our employees and union members, surprise medical bills threaten to do just that. Every time there is a visit to an emergency room or a scheduled surgery, our employees and members are exposed to a potential surprise medical bill that can leave them at the mercy of a debt collector at worst or force them, their families – and often their employers – to invest a lot of time trying to mitigate the financial damage.

The problem has become particularly egregious with the rise of private equity firms buying hospital emergency rooms and air ambulance companies, creating monopolies that take advantage of our employees and members when they’re most vulnerable. A 2018 analysis from researchers at Yale University found that the presence of a private equity-backed firm in hospital emergency rooms results in immediate price increases and a sudden exodus of providers leaving networks. Going out-of-network means more money for hedge funds, even if it puts our families at risk of bankruptcy.

When it comes to surprise medical billing, we can’t afford a solution that raises health care prices, especially when there’s a clear solution that would restrain rising health prices and put an end to this greedy and manipulative billing process once and for all. That is why UNITE HERE and The ERISA Industry Committee have joined forces with other labor unions, employers, health services organizations and health care providers to advocate for federal legislation that ends the exploitation of patients and working families. Our workers and employees are the backbone of our economy, and keeping them healthy, productive and safeguarded from surprise billing is essential for the economic health of the country.

The Senate’s bipartisan Lower Health Care Costs Act would prohibit surprise medical billing and implement a local, market-based benchmark rate to ensure out-of-network providers are fairly reimbursed. Today, out-of-network providers have free rein to invent “list prices” they charge patients in the hopes of getting paid as much as possible. 

This is a market failure that needs to be fixed by sensible intervention. A local, market-based benchmark does that by ensuring that provider reimbursement rates reflect the price of care and local market considerations while promoting affordable access to care and increasing transparency for patients who would otherwise be subjected to exorbitant surprise bills.

This solution addresses the most pressing concern in our health care system today: the rising prices that we all pay in higher premiums and out-of-pocket expenses. With a local benchmark approach, working families will see lower premiums and cost-sharing — and avoid trips to bankruptcy court.

The independent Congressional Budget Office recently estimated that a local benchmark rate would save patients, employers and taxpayers $25 billion over 10 years. Contrast that with a government-mandated arbitration process that would cost the taxpayers $1 billion to administer. We already pay too much for health care; we shouldn’t be tacking on a single dollar to that just to appease private equity special interests.

Employees and working families deserve access to affordable, transparent health care and to be protected from surprise medical bills. A local, market-based benchmark solution is the best path forward to safeguard working families while lowering health care costs overall. Federal protection is long overdue.

Congress needs to pass the Lower Health Care Costs Act so that patients can safely go to a hospital without the threat of private equity firms and hedge funds taking advantage of their medical emergency to line their own pockets.

 

D. Taylor is the international president of one of the fastest-growing unions in America, UNITE HERE — he has served as president of UNITE HERE since 2012.

James Gelfand is senior vice president, health policy, for The ERISA Industry Committee, which advocates exclusively for America’s largest employers on health, retirement and compensation public policies at the state, federal and local levels.

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Correction: An analysis from researchers at Yale University about out-of-network billing was published in 2018. The previous version of this op-ed had the incorrect year of publication.

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