Another Lurking Obamacare Problem: Balance Billing

One of the proofs that Obamacare is really about helping insurers and Big Pharma rather than ordinary Americans is its failure to do much about the seamy practice known as balance billing.

Say you have a scheduled procedure, like getting a stent. Like most Americans who have health insurance, you are in an HMO or a PPO. Your doctor, who is in your network, schedules you for the operation at a hospital in your network. You assume the only thing you need to worry about is a fairly minor co-pay and recovery.

But weeks later, you find that the anesthesiologist wasn’t in your network, and you are hit with a $12,000 bill for his services. And this sort of scamming (hospitals knowingly putting people on a surgical team that they can bill at huge premiums to negotiated rates) is routine. And of course, if the ambulance takes you to an emergency room that is not in your network, the outcome can be catastrophic. Some examples of typical bad outcomes, the first from Families USAm (hat tip Dromius):

A 2010 report by America’s Health Insurance Plans said out-of-network providers often charge exorbitant rates, as high as 70 times the Medicare reimbursement for a similar service. A report issued by New York State in March cited the case of a patient who went to an in-network hospital emergency room after severing his finger in a table saw accident. The finger was reattached by a nonparticipating plastic surgeon, and the bill was $83,000. The insurer estimated the going rate for the procedure was only about $21,000.

A story in the New York Times from October shows how vulnerable patients are in emergency situations, even in in-network hospitals:

Once the cardiologist figured out why Raquel and Michael D’Andrea’s 9-week-old daughter was so frail and unable to eat, he immediately sent her to the hospital for heart surgery…

Ms. D’Andrea knew she had already selected a comprehensive plan a few years earlier. She gave her insurance card to the hospital staff, but her daughter, Sienna, was ultimately treated by several doctors who were not in their plan’s network.

“We assumed that because we showed them our insurance card and nobody had any objections, we were covered,” said Ms. D’Andrea, 35, of Farmingdale, N.Y.

The bills were so numerous and complex that the New York Times story didn’t provide a total. Ms. Andrea’s mother, Ms. Cooper, who ran a boutique with her daughter, had to shutter it to help with the baby’s care and decypher the bills and fight the hospital (the daughter had to go back for 17 days in the hospital):

Ms. Cooper spent countless hours poring over the bills, trying to make sense of it all. “It was so overwhelming,” said Ms. Cooper.. “We received department bills and there could be 60 invoices on one printout. You would have a bill for $8,100 from one department or $6,500 from another department. It was hard to figure out what was covered, what wasn’t covered and what was balance-billed.”

Very persistent effort enabled them to get the out-of-pocket payments down to $10,000.

When we’ve described some of the problems with Obamacare, some readers have piped up and insisted, “Oh, but you forget, those costly plans are still really valuable! The most you can pay in 2014 is $6,350 if you are an individual and $12,700 for a family of two or larger.”

That is just not true. Those limits apply ONLY to in-network services. All Obamacare does is nibble around the edges of the balance billing abuse. Families USA summarizes the relevant parts of the ACA Patient’s Bill of Rights:

Although the new law does not completely solve this problem (balance billing), it does make some changes that are designed to minimize your bills for emergency care: It sets some standards for what health plans must pay out-of-network emergency providers, and when providers are paid adequately, they are less likely to balance bill.

Your plan must pay the emergency providers the greatest of these three amounts:

1. The amount it pays in-network providers;
2. A payment based on the same methods the plan uses to pay for other out-of-network services (for example, a percentage of usual and customary fees charged by other providers in your area); or
3. The amount Medicare would pay for that service.

Say get in an accident out of state. You will be hit with a large emergency room bill, and your insurance will pay only a comparatively small portion.

Buried in the New York Times article was a terse assessment:

Still, there’s nothing in the law that stops health care providers from billing consumers for the balance, which is what often happens — and exactly what the D’Andrea family experienced. “This is not an issue that the Affordable Care Act fixes,” said Timothy S. Jost, a professor at the Washington and Lee University School of Law and expert on health care laws. “It is conceivable that the problem gets worse for some people if the Affordable Care Act encourages narrower networks, which some people think it might do.”

Remember, Romneycare has had only a marginal impact on medical bankruptcies in Massachusetts. And there are reasons to think you could easily have nasty outcomes financial outcomes with Obamacare. I’m getting reports now from parents who are lucky enough to have kids that are under 26 and employed find that their inclusion under their parents’ coverage is not terribly useful if the child’s job isn’t where the parent resides. Similarly, people with existing conditions (particularly if they might need emergency care or surgeries) may simply assume, as some readers have, that they aren’t exposed to costs above their policy maximum and thus won’t be aggressive about making sure that professionals that attend to them are really covered under their policy. As the inevitable horror stories get publicized, that problem will become less prevalent. But the initial billing victims will, using Geithner’s HAMP metaphor, foam the runway for hospitals rather nicely.

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88 comments

  1. financial matters

    Thanks for your continued efforts in this area. I think the best part of ACA is how it has focused so much in depth analysis of the medical system as it is. It’s interesting that some people consider the ACA disaster as a feature meant to lead to single payer. I think the insurance companies were worried about ACA but more for this spotlight that is being focused on them. Big time rentiers like to live in the darkness as if they don’t really exist. Single payer wouldn’t be perfect but it would get rid of a lot of the expensive and burdensome obstacles and help focus on actual medical costs.

    1. Banger

      Interesting comment–I like the way you think. Indeed one of the chief problems with the U.S. health-care system is the scant attention the mainstream media pays to it. It’s as if they were directly employed by them. But what’s to stop the mainstream from ignoring the issues raised on this blog?

      1. diptherio

        “It’s as if they were directly employed by them.”

        You’re not suggesting that all those ad-buys by pharmaceutical companies are having an effect on the way the MSM covers healthcare are you? Perish the thought…

    2. Cynthia

      I fully agree. Single payer will also help hospitals shift their focus back on providing actual medical care. No industry that’s heavily subsidized by the federal government should be allowed to run itself like a Disney World or a posh ski resort in the Rocky Mountains. But apparently, the hospital industry is allowed to do this, and it’s getting more extreme with each passing day.

      Hospitals when run like an amusement park or luxury resort hotel spend beaucoups of money on newer and more expensive bells and whistles to attract patients. They build fancy birthing suites, fancy lobbies with piano players, marble and teak waiting rooms, etc. What people really need are well-qualified physicians and nurses to accurately diagnose and treat their medical problems. This is not the sexy part of health care, but it is the one that is lost in the ridiculously frivolous and nebulous world of advertising and marketing, rooted on the popular myth that medicine is market based.

      The public is woefully unable to sort out what is good medical care and what is just putting lipstick on a pig. Why are hospitals allowed to spend precious healthcare dollars on hiring masseuses and gourmet chiefs when their contribution to improving patient outcomes and reducing hospital stays are minuscule at best?

      1. bluntobj

        I always find it fascinating when people think of medical professionals as robots or things made to serve them.

        Professional and skilled medical staff are wonderful. But what kind of person wants to do their utmost in a profession that is rapidly become one of effective martyrdom?

        Under a single payer system, what happens with a doctor or nurse practitioner that does not want to work under the official reimbursment rate? What if they don’t want to struggle under the exponentially increasing rules? What’s going to happen to their malpractice risk if there are far more grounds to sue?

        If the hemmorage of practitioners continues, will we see “mandatory” service from doctors or nurses in order to maintain their medical licenses? Will it be illegal thereafter to practice medicine without seeing OSP (Obamacare Single Payer) clients?

        For those readers that dismiss, scoff, or mock these questions, may I point out the following:

        If you believed that you could keep your doctor, you were wrong.
        If you believed that you could keep an existing plan you wanted, you were wrong.
        If you believed that your healthcare would become more affordable, you were wrong.
        If you believed that the government could provide better healthcare that was affordable or free to you, you were, are, and will be wrong.
        If you believed that the additional layers of regulations and controls on everything from medical practice to finances would fix allt he problems the last regulations created, you were, are, and will continue to be wrong.

        For those who mock or scoff the idea of forced medical practice, your beliefs have been quite wrong in the past. The world is not as you think it is.

        Please think about these ideas when you discuss OSP.

        1. OIFVet

          You are quite disingenuous trying to imply that Obamacare=single payer. You dangle so many red herrings that the fishy smell is unbearable and the troll factor is off the scales. I will give you the benefit of the doubt though. Assuming you are not trolling, may I suggest that you look up north for answers to your questions. Oh the horror! The horror!

          1. Kevin Laffner

            HE is not suggesting that ObamaCare = Single Payer. He is properly anticipating the coming FIX from the left. So when people start to carry on about Single payer and all the claims of how great it will be come from Obama and his minions, his credible suggestion is that no one should believe them.

            1. Lambert Strether

              Obama and his minions fought single payer tooth and nail; I was there in the health care debate, and was censored and banned by those same minions, as were many of us. It is true that nothing that Obama or his minions say is to believed without checking, but sometimes, when they say “It’s raining,” and you look out the window, it actually is raining.

              1. bluntobj

                Lambert,

                Given where we are with ACA now, I think I would have preferred single payer.

                In discussing the future, though, It is evident we cannot go back. If the “no disqualification for previous condition” rule was reversed, I could see torches and pitchforks. Likewise, old policies cannot be written or cost the same with that rule in place. That is not even touching on all the back end rulemaking, payments, networks, taxes, etc.

                So, knowing our government, the phrase will be “Forward!”

                What direction will “Forward!” take us? My analysis is that it will be a NHS style single payer (OSP) with private insurance for the top 10%.

                I am pointing out that such a change must be treated with far more caution and scrutiny than the passage of ACA, which I think you will do.

            2. OIFVet

              I didn’t say he SUGGESTED it, I said he IMPLIED it. It is not targeted at those whose reading comprehension is at a fifth grade level. It is targeted at the “keep your gubmint hands off my medicare” crowd. You remember those folks, dontcha? Those folks are easily confused by language and driven to frothy rage by dog-whistles, and his post is a great combination of both. Granted, he is attempting this on the wrong crowd but my point remains valid. So, what’s your Canadian Medicare horror story, or are you dealing in “credible suggestions” only?

              1. bluntobj

                I must modify my previous statement about being fascinated about people thinking that medical professionals are there to serve them.

                I should have said that I’m always fascinated that there are people who think that other people are there to serve them, and that those people are beneath their contempt.

                My answer, OIFVet, was actually geared to people such as you; People that maintain a mindset even when all evidence is to the contrary.

                I created the acronym OSP simply because whatever name Single Payer will take, it will still be known as Obamacare.

                The administration’s attempts to move away from the “Obamacare” branded name for ACA will not work, and it’s transparently evident except to those that refuse to believe, as I mentioned.

                1. OIFVet

                  “I should have said that I’m always fascinated that there are people who think that other people are there to serve them, and that those people are beneath their contempt.”
                  Congratulations, you have described the 1% and their political lackeys perfectly. I still don’t understand though, what is that mindset that people like me maintain? Where did I say I support obama care? For that matter, why do you even continue to imply that Obamacare is the same as government care somehow? And tell me, why do you even think that physicians are happy to be forced to accept the rates the HMOs impose to them? Oh, riiiight, for libertarians government regulations are slavery and corporate exploitation is freedom. Well, I have news for you bud, none of the physicians I know are happy to be told how to practice medicine and how much they will be paid for it by the HMO bean counters. Two of them even up and left to go work for the VA, finding it to be a less stressful and more satisfying work environment. The horror of single payer! The horror!

                  Look the bottom line is that we will get exactly what we deserve. And your libertarian fear mongering is quite cynical given how much of our current mess can be traced to Ayn Rand acolytes and their puppetmasters. If your post was meant for people like me, as you say it was, you are wasting your time here. We know just how bad a law the government can pass when it does the corporations’ bidding, that’s the reason why I and people like me were never ever behind Obamacare, we always knew it was done in the name of corporate profits and not in the name of We the People. Nonetheless thank you for bringing it to our attention just in case we forgot about it while we took our evening naps.

                  1. bluntobj

                    Ah, OIFvet, I was not talking to you about equating single payer and Obamacare. I was responding to the post above that extolled the wonder of single payer.

                    It was you who took my branding of OSP and said “implying Obamacare = single payer.”

                    As a fun idea experiment, perhaps re-reading Rand’s fictional works may reveal that the fictional actions of the fictional government could not possibly have any real life counterparts, right?

                    And as anyone who has read my posts on this forum knows, I fully endorse opting out and not buying a ticket to the BvR game in the stadium.

                    Attempting to group classify, strawman, and ad hom is so much halftime cheerleading in the big game.

                    1. OIFVet

                      Sorry, didn’t realize that calling someone a libertarian is considered an ad-hominem. Perhaps that’s because some libertarians are deep down ashamed of what has been wrought in the name of their religion. I mean, deregulation and such policies which were holding our business ubermenschen down were supposed to result in universal freedom and free enterprise goodness turned out to have resulted in a dictatorship of the corporations and the rentiers… It’s a major bummer. Don’t be too down about it though, at least your capacity to experience shame means that you are a good person. And I mean that.

                      That being said, how do you propose to bring about a VA-like system for everyone while bypassing government?

                    2. Bluntobj

                      OIFVet,

                      I do not think a transformation from Sickcare to a benevolent VA style care system is possible.

                      The basis for that thought is that the modern VA is the deserved compensation for service. It’s moral and ethical.

                      There is not a moral basis for doing so for the rest of us who have not served, put their bodies, health, and life on the line. Attempts will fail.

                      But my idea to do so relies on eliminating all forms of insurance, move to a cash basis system, eliminate the cartel of the AMA, change IP rights in regards to health services, eliminate all legal awards for malpractice and require lifetime care by the offending party instead, emphasize hospice over prolonging end of life, develop public self treatment guides, etc.

                      Oh, and eliminate the corporation from personhood.

        2. JGordon

          As an experiential reality on my part, I have to say that I get great, timely service from the doctors and nurses at the VA care facility I go to, and there’s plenty of them working there despite the fact that they could be out working in the private market. And since I signed up for VA care 7 years ago, I have not had to fill out one form or worry about whether or not I could get a procedure done because of cost or what some insurance company might or might not be willing to do.

          In other words, whether by purpose or accident I think that you’re position is completely insane, just based on what I’ve experienced in my actual life I mean.

          1. bluntobj

            I wish healthcare was like the new VA (not like the 70’s or 80’s, that’s certain). The doctors that practice at the VA are not coerced into doing so, and the care has definitely improved according to my army buddies.

            That’s what you get when you have a completely vertically integrated system that is not paid for by crony capitalist insurers and is now bolstered by a moral mandate of “care after service,” driven by the proper elevation of the soldier’s service. That alone is a great change from historical practice.

            That is not what happens with medicare, ACA, or any private citizen’s healthcare without large gobs of money, nor will it be the outcome of OSP.

            It is not insane to question the development of ACA based on what was promised, nor is it insane to think that OSP will function any better.

            1. OIFVet

              So what exactly do you think people like me are talking about when we say single payer? I am a very happy and satisfied to be in the VA system, and when I say single payer this is what I envision. Not something masquerading as “single payer” but a true single payer which is equitable to the patient and the provider and does not serve the special interests of some parasitic industry or another.

              1. bluntobj

                Now you are talking! I wholeheartedly agree with you, OIFVet, VA care would be what I would want for healthcare.

                So, doing some quick data comparisons (not on healthcare.gov, obviously ;D ), there are about 22.8m veterans (as of 2009), and about 8.76 million were enrolled in the VA. VA healthcare expenditures at that point were about $40 billion.

                That works out to about $4,566 per person enrolled.

                Using a population figure for the US of about 313.9 million I can do a simple math bit (using excel, since the 10 key goes all sientific notation on me) and come out with 1.43 trillion dollars. Annually.

                Naturally not everyone is receiving care at the same time, but the staff and facilities must be there for everyone to access at any particular time, and it’s as good as any other number anyway.

                I imagine that the $1.43 trillion dolalrs will increase as the costs of scale exert themselves.

                All this is assuming the quality of care of the VA can be maintained with a client base of 313.9 million individuals, instead of 8.76 million as it had in 2009.

                So yes, the VA is great! It’s great for the 8.76 million people that use it, and they absolutely deserve it for their service.

                But is the version of OSP that is going to come out of Washington going to be the modern VA? I don’t know that you believe that it will be, given your comments on corporatist goverments.

                For both JGordon, and OIFVet, is it insane to question that the output of .gov’s version of single payer might not be what they will try to sell it as? Is it insane to look at the results of .gov’s work over the last 10 years and be terrified?

                Or is it insane to still believe in the benevolence of .gov? That’s what I am pointing out.

                1. OIFVet

                  No, it is not insane to question the benevolence of .gov in its present form. I agree with that. But it is up to us to decide who the government works for, We the People or the corporate overlords. How do we take the government back, I have only generalized ideas. All I know is that we can. I strongly suspect that the first steps must involve getting unlimited corporate money out of politics and breaking up the current political duopoly. Yes, perhaps I am guilty of broad-brushing you, but it has been mutual. I am not a democrat, I am a leftist. There is a difference, you know.

                  1. bluntobj

                    Thank you for your words. There is indeed a difference between a D robot and a leftist, and I can respect that.

                    I do not know how the government can be taken back. At this point I advocate an opt-out strategy, which means eliminating (insomuch as it is possible) the participation in the corporate and government aspects of our lives. That means downsizing life, occupation, etc. That requires a good bit of civil disobedience as simple as not following or funding local ordinances, to growing/consuming your own or local food, to developing community networks that accomplish goals without relying on government’s grants of competitive advantage. What form that takes is undetermined, but it’s usually always local.

                    I advocate opt-out because, in the original reply that sparks all of this discussion, I think that nay attempt to use the government to accomplish a goal will be co-opted by corporatists and elites to further their own power ends. I would rather not provide the cash or support to do so while they lie to me about what is going to happen.

              2. bluntobj

                As another thought, who here has attempted to file a lawsuit against the VA for medical negligence?

                That’d be another consequence of VA style healthcare. All doctors would be USG employees, and medical lawsuits would be against the United States. That should be an interesting aspect worthy of a couple research papers right there.

        3. Dana

          Funny …. I had a conversation with my doctor just last week about how the insurance companies and big medical corporations are forcing her and her colleagues to practice medicine as though they were robots.

          1. bluntobj

            Another aspect of Citizens United that is disgusting.

            “people who think medical professionals are robots” is a group that also includes corporations.

    3. lowfiron

      Insurance companies worried? Why they were in it before the beginning and then Obama talked to them (insurance~ pharma) before congress got into the act. Am I right? I’m beginning to think even if single payer happens we are screwed. I don’t think the politicians are even going to begin negotiating with big pharma.. On top of that the Democrats have f*cked themselves big time and Obama just made it worse. They are both tactical idiots. The only solution will be to take it to the streets.

  2. Balance biller

    Balance billing these days is generally not a problem, aside from the NY times story,or those with awful insurance plans. The balance billers are the out-of network doctors who are basically scam artists. They know that 95% of doctors are in network. but they scam and take a lower payment from the ins. co. so they can chase additional payment from the patient hence out of network. It’s so dumb.

    However, Balance billing will be a problem under ACA because the bronze plans have been created with so few doctors in the network that it will be difficult to stay in network all the time. Most doctors, probably 95% of doctors! won’t even take out of network patients because they don’t want to chase down the balance from the usually broke patient.

    1. Yves Smith Post author

      Boy, do you have that wrong.

      Who controls who is put on a surgical team? Do you think these out of network doctors hang out on street corners or in the waiting area of emergency rooms and say, “Hey, let me treat you! See, I have a license and I’m board certified too!”

      It is the HOSPITALS who are primarily responsible for the scheduling (the lead surgeon may have some input, as in he wants an assistant surgeon on that he likes, and couldn’t care less if that guy is on the patient’s plan or not, he just wants someone he likes who is up for duty the hour the surgery is scheduled) and the HOSPITALS who determine the rates for these out of network doctors and send the bills.

      Don’t spread disinformation on this blog.

    2. redleg

      Not a problem? It already IS a problem. I got smoked by this very thing (anesthesiologist out of network – oops!) after having a major orthopedic repair effected on myself in 2012. I had the luxury of time, so I checked to make sure the doctor, hopsital, rehab etc. was in network and covered by the plan. I missed some of the details and the amout I set aside was a mere fraction of what I actually paid.
      “Insurance” is a scam. If you are covered you aren’t, and the ACA makes things worse.

      All of the issues with ACA are not flaws – they are features. The insurance bankers wrote the law and it serves their interests perfectly. Experiences like mine were the pilot projects for bigger scams, and we’re now starting to see the results of scaling this up to a national level.

  3. McKillop

    Yowza!,
    Here in Ontario, Canada, I’m a beneficiary of single payer medical care.
    I’d give the surgeon the finger.

  4. Jim Haygood

    ‘There’s nothing in the law that stops health care providers from billing consumers for the balance, which is what often happens.’

    This is a symptom of a Sovietized health system with opaque pricing, in which some ‘consumers’ pay exorbitant markups while others (e.g. Medicaid patients) pay below cost.

    Big Gov loves this system, since it can exploit its clout (as roughly half of total healthcare spending) to extort low reimbursement rates for itself, while knowingly throwing insurers and individuals under the bus to face extortionate price discrimination.

    Commissars Obama and Pelosi were a bit too dim in their grasp of economics to understand that when Big Gov takes over the whole market, such squalid shell games don’t work no more — there’s no sucker behind the tree to stick with the bill, except US. And boy, are we pissed …

    1. scraping_by

      Er, no.

      Medicare pays the real cost plus a small markup. If you mean the real cost is whatever can be extorted from people in need, you’re upgrading extortion. Lots of vocabulary to make extortion sound better than it is.

      Individuals and insurance companies aren’t on the same side in this. Insurance wants to avoid paying any money, individuals need health care. Insurance and healthcare actually stand on the same side of the transaction (patient pays, they receive) so their interest is against the individual. Talking about the real world, not the advertising photographs.

      When the government is the agent for the health care consumers, assuming continued honest representation, the real cost will become more apparent and the extortionate model of pricing will disappear.

      1. Jim Haygood

        Medicaid (expanded under Obamacare) has been described as a ‘hunting license;’ surveys bear this out:

        On average, almost half of physicians’ practice revenue was derived from public sources—about 31 percent from Medicare and 17 percent from Medicaid.

        Practices’ acceptance of new patients varied by patient insurance type and physician and practice characteristics (see Tables 4a, 4b and 4c). Generally, practices were much less likely to accept new Medicaid patients than new Medicare or privately insured patients.

        Slightly more than half of physicians (53%) reported their practices were accepting all or most new Medicaid patients; 28 percent reported accepting no new Medicaid patients. Almost nine in 10 physicians (87%) reported their practices were accepting all or most new privately insured patients, and almost three-quarters (74%) reported their practices accept all or most new Medicare patients.

        http://www.hschange.com/CONTENT/1078/

        Then there’s the annual drama of waiving the SGR (Sustainable Growth Rate), which calls for a 24.4% cut in Medicare reiumbursements come Jan. 1st:

        http://money.cnn.com/2013/11/01/news/economy/medicare-doctor-payments/

        How would you feel about working in a profession with such gross uncertainties, that depend on the ever-shifting whims of politicians?

        I used to feel sorry for banana republics. But at least they’ve got bananas.

        1. Legendary Bigfoot

          Haygood you swindling nitwit tool of the oligarchs, the fact that you won’t straight up admit to the fact that certain medical professionals and many administrators are simply parasites who got into the biz for the bucks are the biggest part of the con. There is an entire circle of swine in the medical industry from the AMA through Pharma to “religious” hospitals dodging taxes, down to administrators and lawyers for collections agencies.
          Obama giving insurance companies their wet dream is simply the first phase of the inevitable downward spiral of oligarch corruption. The medical industry is already a welfare queen protected from markets and competition, subsidized with student loans and tax cuts, research paid for by taxpayer moneys and turned into spigots of money and absurd to outrageous pricing structures and intentional misrepresentations, all balled up into a giant protection racket. It is past time for a change up.
          On the other hand, the only place I have ever seen a Lotus convertible in Alaska is at the neonatal perinatologist, which only cost me a few thousand dollars for the privilege.

  5. TarheelDem

    A large proportion of people who will be on Obamacare have had employer-based insurance at some time in the past. And most know either directly or from acquaintances about balance billing. Where it will finally hit is (1) the credit ratings of the patients and (2) the unpaid bills that providers factor to bill collectors. There is no change in process from the current system except in the aggregate there will be a smaller number of unpaid bills in the system. Providers will either capture that as retained earnings or pass some savings on to insurers and patients.

    There is enough of the old system left in the new system to keep you in columns for years. Which is why there will not be a long delay before people are pushing health care reform again. The two options are to expand Medicare extension until the affordability issue is handled by federal subsidies of bloated provider and insurance industries or to move to a single-payer system that combines Medicare, Medicaid, and more long-term care coverage and applies to all. The sticking point on the second option is shifting payments from premiums to private insurers and direct payments to providers to taxes to the government. How do you get any action through Congress on taxes? Which taxes get raised to fund single-payer health care?

    It is at that point that smart policy would get rid of deductibles, co-pays, and balance billing because you would have a monopsonistic system in which compensation for providers would be set by politics in the Congress instead of by their own market power.

    1. splashoil

      What basis do you have for your contention that the balanced billed amounts will be less under Obamacare? The narrow lists of plan providers, excluded hospitals and specialty providers, and various other loopholes would suggest balance billing will go on a steroid diet. Remember Liz Fowler and Max Baucus are not fools they are tools. They knew who they worked for: POTUS Obama.

      1. TarheelDem

        What I said was the balance billing amounts would be less if providers and insurers pass on their savings to patients.

        Bringing more healthy people into the pool and covering a larger number of people will reduce somewhat the number of uninsured people seeking care and the size of the bills that are unpaid. That should permit providers to lower that part of their fees that seek to offset unpaid accounts. And in turn that should allow insurers to in the next annual cycle become more generous on their co-pays or deductibles.

        Whether it does depends on the providers and insurers. The logic of Obamacare sold as market competition means that people will expect balance billing to go down and when it doesn’t it won’t be Obamacare that is seen as the problem, which would drive momentum for repeal, but the fact that it did not rein in providers and insurers enough.

        1. splashoil

          The providers, specialty out of network hospitals, and others who will balance bill are not part of the Obamacare insurance plan networks by design. Think of Jon Gruber and the Dartmouth assholes. If you buy one of these plans, you should not expect to receive any help paying for services and providers that were excluded BY DESIGN. Those fluffing this pos with heart warming anecdotes will soon by overwhelmed by real stories of medical bankruptcy as these plans are rolled out. Remember this was sold as an improvement. Some will get free healthcare. Some will just get a collateral loan if they are over 55 and poor. When Democrats run on this plan as the best they could do, they will go down in flames.

        2. Yves Smith Post author

          What alternative universe do you live in? You are seriously suggesting private businesses will “pass on savings”?

          The rule of business is charge what the market will bear. What mitigates against that is competition. Maggie Mahar wrote an entire book on why that doesn’t work in medicine.

          And the ACA will most assuredly make the balance billing worse via narrow networks. Requiring the insurer to pay the in network or Medicaid rate only slightly mitigates the damage (oh, and for emergency care only, not if you have a regular surgery and the hospital puts a full rack rate radiologist on your case).

          AND doctors will be forced to sell practices to hospitals (the new ACO rules pretty much guarantee that) increasing the hospitals’ pricing power.

  6. fresno dan

    All the deductibles are annoying enough – when you know about them, but than there are people involved (what next, dancing sterilizer technicians) working on your surgery at the hospital, and OH, there not part of the coverage. Do you need to get a God*amn certificate from every one in and about the surgical suite that your insurance reimburses them???

    HONESTY – can you image this happening with car insurance???????????????? Oh, the chief mechanic was covered, but the wrench assistant was not. And the bumper was covered, but the fasteners are not…

    And to me what is so annoying in this “medical insurance” reform, is that it is touted as better, more complete coverage. its just a scam of even more things not covered – probably next will be oxygen…(this is our out of network oxygen, with citrus fragrance…10K a canister)

    There should be an immediate reform that insurance covers the cost of surgery and that if your in that surgical suite, that is the amount your getting. If the amount isn’t enough for you, than don’t agree to be the anesthesiologist.

    1. mk

      “Do you need to get a God*amn certificate from every one in and about the surgical suite that your insurance reimburses them???”
      ~~~~~~~~~~~~~~~
      sounds like the beginning of a monty python riff…

      1. susan the other

        I was thinkin’ monty Python too. That is how absurd this ACA free-market boondoggle is. Unless we say enough and demand single payer, sick people are going to get tossed on the black-death cart whether they are dead or not. It’s the expedient thing to do if you are an independent contractor.

  7. Edward Lowe

    But captain, look how NICELY we have arranged the deck chairs. I just can’t believe people are complaining still. This is the best deck chair arrangement that … glub … people … glub … can …. glub … glub ….

  8. run75441

    Hi Yves:

    Within a period of 3 months, the truck ran over me and then backed up over me with endoscopy, gall bladder, and bypass surgery. I was faced with what you are discussing with radiology, the surgeon, etc. Since none of these were in network, I was paid and then had to reimburse them with the money the insurance company sent me. The clause is such that through no-fault of your own you are faced with out-of-network costs. The insurance company did pay a negotiated rate. United Healthcare was the insurance company

  9. Eureka Springs

    “The most you can pay in 2014 is $6,350 if you are an individual and $12,700 for a family of two or larger.”

    Well I don’t think the State of Arkansas got the memo/law. When I checked the State exchange site for rates a couple weeks ago, plans quoted about 300 a month with a 6,000 deductible. Seems like AR is set up under ACA to charge up to 9600 per year (or much more as Yves points out) for this individual.

    Why the heck would anyone buy into this before they are in dire straights is beyond me. Every single person I talk with agrees with me… they are not buying into this.

    As Ian Welsh said in re ACA and American politics in general recently:

    When you are dealing with bad people, you must assume bad faith; bad behavior.  You must plan for it. – Ian Welsh

    1. marym

      There are at least two reasons why the deductible can be more than the supposed annual limit. Some insurance companies received a one-year waiver for the limit (they said they couldn’t get their systems programmed in time).
      And insurance companies don’t have to count the deductible (among other things) toward the cap, so there really is no cap.

      https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/

      Out-of-pocket maximum/limit
      The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100% of the allowed amount. This limit never includes your premium, balance-billed charges, or health care your health insurance or plan doesn’t cover. Some health insurance or plans don’t count your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses toward this limit.

      1. OIFVet

        Indeed. And just looking at the plans on the healthcare.gov site will not tell you whether this particular company counts the deductible toward the out-of-pocket limit or not. One has to dig very deep into the insurance company site to find the PDF with the small print which states what does and does not count toward the limit. At least that was my experience while shopping for insurance for my mom. Anther bonus headache: most of the insurance companies’ CS representatives could not answer the question of what does and does not count toward the limit.

  10. kenneth alonso

    What is described is not balance billing.
    What is described is billing by an out of network provider.
    Balance billing is billing for the difference between the government approved charge and the amount paid to the provider.

    1. OIFVet

      This makes no sense whatsoever. I know what you are trying to say, but first of all your writing is jumbled and second of all you are still way wrong. Just go to any state’s insurance commissioner website and look for the definition of valance billing before you post such ludicrous nonsense.

  11. washunate

    “You assume the only thing you need to worry about is a fairly minor co-pay and recovery.”

    “When we’ve described some of the problems with Obamacare, some readers have piped up and insisted, “Oh, but you forget, those costly plans are still really valuable! The most you can pay in 2014 is $6,350 if you are an individual and $12,700 for a family of two or larger.””

    It’s almost quaint hearing these kinds of descriptions.

    The bubbles of liberal affluence in academia and law and medicine and so forth have shrunk so small that it’s almost comical trying to capture that perspective and then describe it to the world outside.

  12. Cynthia

    Here’s some more bad news in ObamaCare-land…

    “New York Won’t Make Obamacare ‘Fix’”

    http://www.nationalreview.com/corner/364310/new-york-wont-make-obamacare-fix-andrew-johnson

    The basis of modern insurance is called the law of large numbers. You cannot add millions of people to insurance company rolls who will create huge debits for the companies without adding 3 to 4 times more who are healthy. The companies will go bankrupt. Yes, people should have insurance, but the government should have stopped fraud in Medicare and Medicaid and cut reimbursements to hospitals that are run like luxury hotels.

    1. Jim Haygood

      ‘The companies will go bankrupt.’

      For sure, something has to give. Everything we’ve read indicates that adverse selection is eating Obamacare alive. The robustly healthy young bros who were supposed to be the cash cows have already sussed out that O-care is for the curmudgeonly, shriveled-up old Boomers who yell at them when they zoom their skateboards down the sidewalk. Totally uncool, in other words.

      Don’t worry about the insurers. Next year, they’ll simply crank their premiums by whatever percentage necessary to cover the losses. And continue merging into two or three oligopolistic, TBTF giants, with enhanced lobbying firepower. They’re alright, Jack.

      Our mission, here at NC, is to figure out the path of least resistance for a cornered rat like Obama. Probably he would like to start peddling Medicare on the exchanges. But politically, that ain’t gonna happen. CHECKMATE.

  13. DamnYankees

    While the issue you raise is a problem, it has absolutely nothing to do with Obamacare. It’s just a general problem with the medical industry. Should we fix it? Sure. But “Obamacare failed to fix this pre-existing issue which was already broken” isn’t much of an argument; Obamacare isn’t a panacea meant to fix every single problem with the medical industry. Attributing this particular issue as an ‘Obamacare problem’ is very misleading.

    1. Lambert Strether

      ObamaCare claims to (1) provide universal coverage (it doesn’t and won’t), and (2) bend the cost curve (which the collapsed real economy, not ObamaCare is doing, to the extent it is done). Since those claims are large enough to encompass most of the health care system, I’d be happy to say that ObamaCare presents itself as a panacea, yes. Especially after “If you like your care, you can keep it,” which implied to some that there would be no losers.

      1. Lune

        Your argument is that since Obama misled us about Obamacare, it’s okay for you to mislead us about Obamacare as well. With all due respect, you’re better than that.

        The truth is that this is one of the issues of the current insurance market that Obama has failed to address with Obamacare. There *may* also be an argument that Obamacare exacerbates the pre-existing problem because Obamacare plans will have smaller panels of in-network doctors meaning more patients will be forced to see out-of-network doctors. In contrast, Obamacare supporters argue that Obamacare will reduce this pre-existing problem because it forces insurers to pay more for out-of-network providers (reducing the amount that’s balance billed) and it has caps on out-of-pocket maximums.

        The article would be much stronger if it focused on whether Obamacare will worsen or improve the situation with balance billing, rather than simply pinning the blame for balance billing on Obamacare.

        1. Lambert Strether

          I’ve noticed that the “you’re better than that” trope is often preceded by a strawman or a mis-statement of whatever it is one is supposedly better than, and so it is in your case.

          A panacea purport to solve everything, falsely. I argue that Obama’s false claims are so broad that it might as well be a panacea.

          Further, ACA’s definition of what out of pocket expenses count towards an annual maximum seems to allow insurers to NOT count any of the out of pocket expenses one expects to pay as a policy-holder (e.g., copays, coinsurance, etc.) — who knows if balance billing counts towards it.

        2. Yves Smith Post author

          How pray tell, is this “misleading”?

          Obamacare defenders are pointing to the policy maximums as if they are actual maximums on what you’ll pay in a year. I’m not seeing that only in comments; I’m seeing that in a lot of articles on Obamacare. This is a significant error that needs to be pointed out.

          1. Lune

            I agree that not addressing balance billing is an omission from Obamacare. An important one that you’re right to point out. But the title makes it sound like this is a problem with Obamacare, when it’s really a problem with the current insurance industry that Obamacare has failed to address. IMHO, that’s not the same. That doesn’t excuse the problem, it just seems unfair to trash Obamacare because it doesn’t fix everything about private insurance.

            Make no mistake: I hate Obamacare. I agreed with Howard Dean that it was better to kill this and start over than pass the so-called “half a loaf” and then try to improve it later. But it seems that every ill about private insurance is now being pinned on Obamacare.

            Take this whole outrage about people losing their insurance. Obama lost the messaging on this, but quite frankly, Obamacare wasn’t wrong. The insurance plans that are being cancelled are ones that don’t comply with new Obamacare regulations that ensure that whatever insurance you have will be there for you when you actually need it.

            The truth about many current insurance plans is that they’re insurance plans only on paper while you don’t need it. The minute you get sick, you will either be dropped, or the coverage you have will be so spotty that you’ll go bankrupt anyway, at which point, it really doesn’t matter. Most medical bankruptcies occur among people who are nominally insured. Obamacare, by banning insurance companies from considering pre-existing conditions and from having lifetime maximum limits, will inevitably mean that healthy people will see a rise in premiums and a cancelling of plans that cater strictly to healthy people (like low-cost high-deductible plans). But at least you have a fighting chance that the new health insurance will actually cover you and keep you from bankruptcy when you get sick. And that’s the point of insurance.

            Obama surely lied when he said everyone would be able to keep their current plans, because I’m sure he knew that lots of plans don’t currently comply with his new regulations. He shouldn’t have said it. But if I was Obama, I would have turned the tables and say people should be happy that these insurance policies are going away because they wouldn’t have actually provided coverage when it mattered (i.e. when you actually get sick). That was the purpose of the Obamacare regulations.

            To end this diatribe, since Obamacare at best is an attempt to reform the private insurance market, and not an attempt to replace it with a public system, we should stop comparing it to public systems; that battle was lost (maybe we can fight it again later…). Obamacare needs to be judged on whether the ultimate private insurance system it fosters is better than our current monstrosity. Based on that admittedly low bar, Obamacare *might* actually be better.

            1. hunkerdown

              “The battle is lost”

              Why are Americans so eager to give up and change topics as soon as some rich asshole tells them to?

  14. Laocoon

    While the lack of transparency is atrocious, as a practical matter it can help to review each bill with the insurance company and the provider. I realize this takes a lot of time. The example of the anesthesiologist happened to me. After reviewing the 50% out of network with the higher in network percentage with the referring physician, I was told that typically the insurers consider the anesthesiologist as ‘in plan’ even though very few of them are actually in plan. I resubmitted to the insurance company who promptly paid the difference to the provider, wiping my balance. It is overwhelming in a major illness to have to ride herd on reimbursement in this way. I have no idea what people do who are not able, either intellectually or because they are ill.

    1. Lambert Strether

      And it bugs me that the many hours we must spend straightening out the insurance companies’ work is not counted as a cost. How come we can’t bill them? And not at the slave labor wages they their cube dwellers and off-shore back office operation, but at the inflated rate they pass on to the rest of us? I’d go for $100 an hour.

  15. Ed S.

    Oh, the chief mechanic was covered, but the wrench assistant was not. And the bumper was covered, but the fasteners are not…

    True story: spouse was referred by GP to cardiologist for an exam. Contacted cardiologist’s practice in advance to confirm coverage. Yup, we take your insurance (and it’s GOOD insurance).

    Few weeks later get the Explanation of Benefits from the insurance company. Nothing covered. Call insurance company — come to learn that EVERY DOCTOR in the Practice is in their network for all of the plans that they offer EXCEPT this particular doctor for my particular plan (which has the best coverage that the company offers).

    Got it straightened out, but the “not this Dr. and not this Plan” is another disaster waiting to be sprung on the public.
    How exactly is a typical consumer supposed to know that Dr. Jones accepts MegaSurance plans A123, B123, D123, but not C123? The dead weight loss is probably sufficient to cover most of the uninsured population in the US.

  16. jfleni

    RE: balance billing. This is the same thing insurance (any kind, always and forever a scam) has always done. GIMME! Ruin is your problem Bubba, we have Barry on our side!

  17. aletheia33

    i’d like to see a piece lining up, in light of the obamacare fiasco being blamed on merely “big gov’t,” some of the biggest/worst examples of gov’t AND private sector monstrosities side by side, point out the similarities, and investigate/analyze why we now have so much of both, instead of focusing on one or the other. and spelling out the connections between them as well as the similarities–how this is what happens not from bloated gov’t preying on taxpayers but from bloated capitalists preying on gov’t/taxpayers. work that is done here at NC all the time, but in the fresh light of this new fail unprecedented in magnitude/type.

    i am sure book contracts have already been signed for telling the “true” “whole” obamacare story. some should be out as early as february if not sooner. the first books won’t be very good but there will be more, deep studies over time. i wonder who the reporters will be, what insiders will be talking to them, and if any of these authors will have been paying anywhere near the attention lambert did from the start.

    here’s a proposal: obamacare needs to be occupied, just like hurricane sandy and the mortgage ripoff have been. this could be in form of occupiers offering free guidance/info in various forms like websites, perhaps a manual, even pop-up tables advising people on the whole scenario they are facing with the signup, mandate, poor coverage, medicaid clawback, co-pays, high deductibles, balance billing, etc. to help them fully grasp their risks and options. since you cannot trust the “guidance” any other source will give you. i’m sure there are all kinds of reasons why this could not fly (there’s probably plenty of laws against doing it), but i love the idea.

  18. bcl1

    Yes, I have run into this problem several times — even when an operation is planned ahead of time (my wife’s non-emergency gallbladder removal). You can’t get a good-faith estimate of costs, what is covered by insurance, etc. up-front. This makes it impossible for consumers to be able to properly weigh their options and removes the idea of competition from the equation. Such practices should be illegal.

  19. ep3

    ” I’m getting reports now from parents who are lucky enough to have kids that are under 26 and employed find that their inclusion under their parents’ coverage is not terribly useful if the child’s job isn’t where the parent resides”

    Yves, what about kids that go away to school? Wasn’t that supposed to be the point of helping young adults (they are not kids) stay on their parents until 26? So they could attend school and not have to worry about health care? For example Yves, you could live here in Lansing Michigan and attend U of M in Ann Arbor (a top school only 70 minutes away) and be out of your parents network. So poor kids better not attend good schools. They should stay close to the parents health insurance network and attend the hillbilly university, with less opportunity.

  20. Richard Thompson

    The “my doctor-my network ” comments remind me of the old Harry and Louise adds funded by the health insurance industry and put out during the Clinton years in order to scare people.It worked then and in its new form ,seems to be working again. One of the big problems with healthcare going foreword is the developing shortage of primary care physicians.This was happening before the ACA. It just hasn’t reached those clustered in high income areas yet. The ACA has several provisions which try to remedy this situation by offering incentives to those medical students willing to specialize in primary care.There is also an attempt to make physician payments more equitable. A primary care physician might make $200K per year where a dermatologist or anesthesiologist will make twice that much.

    When I was much younger and got sick, a doctor would come to our house with a little black bag.I got to know him and he chatted with my parents.When the sixties hit and the population surged this home based practice ended. I survived . Over the next few years due to limited medical school enrollments,the “my doctor-my network” arrangement will disappear.You will survive.

    1. OIFVet

      In most cases we may survive, physically. We may not survive financially the balance billing of the out-of-network providers though. That’s the point. And correct me if I am wrong but the problem lies not with the shortage of PCPs but with the out-of-network specialists who may be involved in your care without your knowledge.

      1. Richard Thompson

        The problem lies in both areas.There aren’t enough primary care doctors.These doctors are the first line of defense against a condition worsening.Enough doctors working at this level would take a huge load off the healthcare system.

        The in network structure has existed for decades and is a result of “business” deals which doctors have made with insurance companies in order to guarantee them the “right kind” and numbers of patients.An important point to remember here is that most” out of network “situations involve emergency room care .The ACA sets limits on ER charges(see the original article).

        We’ve almost come to the point in this discussion where it is just assumed that “out of network” care and the resultant balanced billing of services is the norm.It is not close to the norm.It is the exception. That’s not to say that it doesn’t exist. My daughter,who has a well paid job in L.A. with good insurance ;fell and fractured both of her elbows.She had to go to an ER which was close to her home but out of her network.Then for further treatment she had to drive across town(45 min.), holding the wheel with her elbows, in order to get “in network” treatment. This is another twist.”In network” may not be what it seems. After she protested the ER charges; the insurance company agreed to pay them.

        Overall, I am glad to see the discussion drifting to where it should have been in the first place….those scummy insurance companies.The ACA and all the resultant fear generated by crazy Ted and his friends in the senate, has gotten the middle class voter thinking about healthcare and how it’s provided. Nobody much was thinking about that pre ACA except those of us who had to take out and pay for our own insurance policies.We welcome your company but remember where the real problem lies…..insurance companies and their long standing stranglehold on the healthcare system…..not the ACA. And the political winners and losers debate is much more important to beltway pundits than it will ever be to the rest of us.

        1. OIFVet

          Nice try but I ain’t buying it. First, PCPs will never be in the business of performing multi thousand dollar procedures. True, their involvement in the care can prevent or postpone the need for these procedures, but the costs of seeing a PCP are relatively negligible for a majority of the population even pre-ACA. Second, you state that the problem is the insurance companies and not the ACA. I agree with the first part, however I would like you to explain how is it that the ACA is not a problem when it not only serves to perpetuate the existence of these leaches but actively rewards their past, present, and future misdeeds by forcing even more people to be their customers, thus ensuring ever larger profits for these parasites? Last, with all due respect emergency care is hardly the only or even the main culprit when it comes to balance billing. I am glad that you welcome our company, but even the benevolent condescension of your welcome doesn’t change the fact that many of us have long and sordid experiences with these parasites. Its very much personal in my case as it led to the early death of my father. So if you expect those of us who have had to live with the consequences of insurance companies’ greed to embrace the very ACA which throws them a lifeline and guarantees their continued parasitism I am sad to inform you that you are wasting your time and bandwidth.

          1. Richard Thompson

            I am sorry about your loss.I should tell you that I worked in hospitals for 25 years and saw many patients, including cancer patients, die as a result of their insurance company denying coverage. I have had cancer twice…once with private insurance and once with MediCare and I’ll take MediCare anytime.

            About PCP doctors;you say their cost is”negligible “.You’re right and this is exactly why they are disappearing.They can spot things like Melanoma or pre diabetic conditions sooner and ultimately save the patient a lot of grief.Also,having worked in hospitals,I can tell you that there are quite a few “multi thousand dollar procedures”(back surgery for example) which are ineffective .

            I agree that the ACA has thrown a life line to the private insurers and I was not happy about it when they virtually wrote the bill in congress. But…it does give people that were not able to have insurance of any kind a chance to be insured.This is what it was supposed to do. In my view,pushing out the insurance companies comes later.And it will come.

            For some reason,it’s always easier to blame government for everything and not to focus on the private sector as much. Of course the private sector is imperfect.. they have to make a profit..they are subject to free market forces etc.etc.It is the government and it’s programs which have to be perfect and it is toward the government that most of us focus our anger.

            In closing ,I think you and I basically agree as to where the problem is…..we just disagree on how to approach that problem.

            1. OIFVet

              I am by any means blaming the government because it is the easy thing to do. That it is, but that’s not why I do it. I do it because rather than serving We the People the government has become nothing more than the underwriting and compliance departments of USA Inc. Both the elected and un-elected officials are on the corporate payroll or will be once through the revolving door. And I have special contempt for liars and hypocrites, which is precisely what Obama and the democrat party are. I will not give these neoliberal f***s the benefit of the doubt ever again because even if they are the lesser evil they are also the more effective evil. They have done and will continue to do far more to de-fang any meaningful reform than republicans could in their wettest dreams. They are the reason why I no longer call myself progressive as the term has lost all meaning when attached to anything Obama and the democrat party have done since the 1970s. Yes, you and I do disagree on how to approach the problem. How could we not when you seem to equate the presence of insurance with access to care? Only the right to care can guarantee access to care. And as an Iraq war vet I can tell you that, despite some shortcomings, VA care is of equal quality but far more humane than the care I used to get at the University of Chicago Hospitals (motto: “At the Forefront of Medicine”). Yes, that would be single payer VA I am talking about. I can’t agree that the ACA will lead to single payer, it was expressly designed to head off single payer. And why? You already answered that, it is easier to blame the government. Particularly for the substantial part of the population which comprises the “keep your gubmint hands off my medicare” crowd. And it is already working. Gallup: “For the first time in Gallup trends since 2000, a majority of Americans say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage. Prior to 2009, a majority always felt the government should ensure healthcare coverage for all, though Americans’ views have become more divided in recent years.” http://www.gallup.com/poll/158966/majority-against-gov-healthcare-guarantee.aspx. Good luck getting single payer out of that wreckage.

              1. Richard Thompson

                A few thoughts in response:

                The VA system is a very good system and more to the point,the VistA computer system they use is the envy of private hospitals and is currently being sourced by these hospitals for their own use. All of this was developed by the government over time and out of the public spotlight. The MediCare healthcare delivery system developed over time now works quite well and with a very low cost to administrate, So the government can do healthcare.

                As for being a “progressive”;you either are or you aren’t. I haven’t changed my views because Obama didn’t turn out to be the agent of change I had hoped for.The presidency in this country has become a ceremonial position without much power except in the military adventures department.What really counts is commitment to what’s right and individual action in that direction. We fail when as progressives we tear each other apart over policy setbacks. We do this constantly, to the delight of our conservative brothers who have learned to shut up about their failures and the shortcomings of their leaders.

                I support the ACA because I am a small businessman who is willing to take risks.When I examined the law and it’s costs,I discovered that I could provide health insurance to all 42 of my employees for what I was currently paying for 6 employees. I don’t have to do this…I am losing money by doing this…..I will pay more taxes because of the ACA. If you’re right, their insurance may turn out to be like a mortgage from Countrywide in 2007. But…these are mostly low income single mothers…some with children… who want to have insurance and want to pay what they can for it. These are the people the ACA was supposed to help.They don’t care whether or not the insurance companies got their dirty little hands in the mix. They don’t know what “out of network “means. They don’t understand how tough the young,healthy middle class employee has it.They work hard but are just making it themselves.I guess you could say it will be a learning experience for all of us.I believe that taking a positive approach to your real-world options is more productive than waiting for Santa Claus. And please forget about those polls and thank you for some very heartfelt responses.

                1. OIFVet

                  Richard, I apologize in advance if what I am about to say comes out as a personal attack, I don’t mean it to be. To state that your employees don’t know what out of network is and they might learn but that’s ok because the ACA was meant to help them is a rather cavalier and cynical attitude. You state that you can cover all of your 42 employees now for the cost of 6. It sounds to me that the plan you have selected is high deductible and a very small network, and even so it still appears to be implausible. How I know? I am a small businessman also, inherited my dad’s business (who was a risk taker also, took a risk by foregoing insurance for himself when he started the business and lost by developing a preexisting condition while uninsured, and is now dead because of that. But hey, playing russian roulette is part and parcel of the free enterprise system). I have 12 skilled employees and I have to provide them with quality insurance if I am to be able to keep them. That means small deductibles and large PPO network. My costs are about to shoot up about 38% to retain the current plan, or 63% to go to a similar plan through the exchange. This math simply does not work for me. It sounds like it works for you but I can’t see how unless you have gone to а high deductible-small network plan. Your employees might be ok with that by mine are not, and by virtue of them being highly employable I have to provide them with a quality plan. So in this respect the ACA is no better tahn what came before it as far as small business goes. Same for the individual market based on my shopping for insurance for my mother. And very soon, I suspect it will affect large companies as well, or at least their employees. Any which way you look at it the insurance system that we have is an anchor weight for businesses, large and small. I suspect you already know that.

                  As far as waiting for Santa, please… I try to make lemonade out of lemons, same as everyone else. But that is getting even harder and more expensive now. I am not going to provide “progressive” validation of this very cynical law. Perhaps it may help some (until they actually have a major medical need), but at the end it just kicks the can down the road and sets us up for an even bigger problem later. You tell me to disregard the poll, to “move along, nothing to see here.” Not bloody likely, this poll confirms what I have believed since 2009: that the whole point of the ACA was to try to block single payer forever. It has succeeded before it has even begun. Very “progressive”, no doubt, to ensure that the only workable alternative that is good for individuals and businesses alike is blocked. Instead the ACA sticks it to the small entrepreneur even more than the current system. SoI don’t call myself a progressive, big deal. Apparently it is not very “progressive” to insist that everyone has access to the very nice single payer system where I receive my care. It might even mean that I am “fucking retarded” as my mayor Rahm puts it. So be it, at least I can say that I am not a hypocrite. That’s more than the “progressive” congress critters who are covered by the same plan I am can say.

                  1. Richard Thompson

                    I don’t take your comments as personal attacks.You’re not calling me names as some of the other commenters have previously.

                    My position towards my employees is different from yours for sure. I am completely paying the premiums for people who don’t have ANY insurance.
                    I could take the position that because I favor single payer I will teach the bastards in Washington a lesson by not paying for any insurance for my rural , low income employees.I think THIS position would be “cavalier.” Remember,my employees,unlike yours,are not highly skilled nor highly paid.The plan I was looking at for them is called enhanced silver.The family deductible is $3000.00 , total out of pocket is $10,400.00 for a family. The premiums are between $84.00 per month to $323.00 per month.The benefits of the plan are the same as I was previously providing for an average cost of $700.00 per month.These are young ,healthy people and so the maximum out of pocket cost is not as big a factor.Preventative care,which they definitely use, is at no cost.Because we are located in a rural environment out of network is not a problem.

                    I worked in a hospital ER for 25 years.When young and otherwise healthy people come in, it is almost always because of a serious medical situation which will cost them some bucks.A 21 year old female employee of ours had a burst appendix 2 years ago and had to have emergency surgery. Her bill was $32,000. She talked them down to $16,000 and gradually started paying them off.She still owes them.For her, under the enhanced silver plan, her maximum out-of -pocket would be $5,200.00. She tells me she would rather have insurance. She is signing up for the plan through the CoveredCalifornia exchange.Rather than me deciding for her because my own political beliefs..she is making the decision.

                    A 30 year old acquaintance of mine who opposed the ACA on the grouds that he was healthy and shouldn’t be forced to pay in order to subsidize other people,was, last week, diagnosed with stage 2 melanoma.Because of his income and home ownership he is not eligible for MediCal.So far he is having difficulty getting treatment.If I asked him if a$5,200.00 deductible would be Ok, I think we all know what his answer would be.

                    I know these examples are anecdotal but as far as I can tell, almost all of the commentary surrounding the ACA is anecdotal. One problem I do have is understanding why the state-to-state rates are so different.I asked a doctor friend who told me that it was because California had such a large population,there was more competion ( 38 million vs 12 million in your state).Hooray for America and the “free market.”This doctor,by the way,very much favors the ACA because it will help hospitals defray the cost of treating people who don’t sign up. This kind of complicates the issue of exactly who who is getting subsidized.

                    The results of polling depend on how you ask the question.If the pollster asked “Do you think a portion of the taxes you pay the government should come back to you in the form of subsidized health care.I am sure the answer would be different from the polling you cited.

                    By the way,I am cynical….but I’m old enough not to let this disposition affect how I treat others.Thank you again for your thoughtful responses.

        2. Yves Smith Post author

          No, you have your history of HMOs utterly wrong. They were not a doctor invention. They were promoted by Republicans to lower health insurance payments. From Wikipedia:

          Although businesses pursued the HMO model for its alleged cost containment benefits….

          Though some forms of group “managed care” did exist prior to the 1970s, they came about chiefly through the influence of U.S. President Richard Nixon and his friend Edgar Kaiser. In discussion in the White House on February 17, 1971, Nixon expressed his support for the essential philosophy of the HMO, which John Ehrlichman explained thus: “All the incentives are toward less medical care, because the less care they give them, the more money they make.”…

          In 1970, the number of HMOs declined to fewer than 40. Paul M. Ellwood, Jr., often called the “father” of the HMO, began having discussions with what is today the U.S. Department of Health and Human Services that led to the enactment of the Health Maintenance Organization Act of 1973. This act had three main provisions:

          1. Grants and loans were provided to plan, start, or expand an HMO
          2. Certain state-imposed restrictions on HMOs were removed if the HMOs were federally certified
          3. Employers with 25 or more employees were required to offer federally certified HMO options alongside indemnity upon request

          This last provision, called the dual choice provision, was the most important, as it gave HMOs access to the critical employer-based market that had often been blocked in the past. The federal government was slow to issue regulations and certify plans until 1977, when HMOs began to grow rapidly. The dual choice provision expired in 1995.

          http://en.wikipedia.org/wiki/Health_maintenance_organization

          So notice, by 1995, the elimination of dual certification had the effect of killing indemnity plans (you go to any doctor you want to, same copay everywhere, no gatekeeping). They are now only about 2% of the policies in the market.

          I guarantee most Americans would prefer an indemnity plan to an HMO or PPO.

          1. DakotabornKansan

            Recall the movie “As Good As It Gets,” audiences across the nation bursting into cheers and applause – the strongest reaction during the entire movie – when Helen Hunt’s character, the mother of a boy with severe asthma who has been denied the testing and care he needs, declares “Those [blankety-blank-blank] HMOs!” And the doctor sent to make a house call by Jack Nicholson’s character responds, “Actually, I think that’s the technical term for them.”

        3. Bridget

          “An important point to remember here is that most out of network “situations involve emergency room care .”

          In the bad old days when networks actually included top notch providers all over the state IN network, you would have been correct. You really need to check out the Obamacare networks in counties outside if urban metropolitan areas. Also the Bronze level networks anywhere. Out of network problems are going to be commonplace in the very near future.

          Worse yet, in the bad old days, on those rare occasions when a patient inadvertently ended up with an out of network provider, the “substandard” plans reimbursed at a rate of 70%. (This was typical on the individual market in my state). With Obamacare, the plans I have seen provide reimbursement to out of network providers for emergencies only. So , if you are a cancer patient in a rural county, and would like to seek treatment in a major research facility out of your county, you are on your own.

  21. LAS

    This is the issue that has persuaded me that Obamacare is not likely going to succeed in the long run for the bulk of the middle class.

  22. Lune

    One other issue that makes this worse is that insurers have significantly reduced their coverage of out-of-network providers, leaving their patients responsible for a larger share of their bill.

    Check out a NY Times article on this issue. In brief, insurance companies used to base their out-of-network payments on a data about the average charges for each procedure. But in an effort to save money, they’re now basing it on Medicare, which is usually significantly less. That means that patients are on the hook for a much higher portion of their ultimate bill than before.

    NB: I’m a physician, and I think it’s exceedingly unfair if I’m forced to provide emergency care to someone who has an insurance plan that then decides to pay me Medicare and with whom I have no ability to negotiate. Just like patients can rightly demand that they know whether all their providers will be in-network, providers should be able to decide whether they will accept the payments offered by a specific plan. Unfortunately, in an emergency, that negotiating leverage disappears, and insurance companies take advantage of that.

    I think the New York State settlement (outlined in the article linked above) was a fair balance: create a database of provider charges, and make insurance companies pay based on that data. That way a provider couldn’t force a huge bill to be paid, while insurance companies couldn’t stiff providers after service was already provided.

    Unfortunately, insurers have disregarded their own database, and as outlined in the article, sometimes pay out-of-network charges at a rate *less* than their negotiated in-network payments. That’s hardly fair. While I also feel bad for patients stuck with the bills, the truth is this is another example of insurers screwing over people on both sides of the healthcare market, and making out like bandits in the middle.

    P.S. Before the inevitable greedy-doctor posts start, let me say I’ve been a vociferous proponent for medicare-for-all ever since I was in high school even though I know full well that will leave me working more, for less money, with higher taxes to boot, simply because it’ll finally prevent my patients from going into bankruptcy when they come down with the type of illnesses I treat. But until we get there, while I’m more than willing to forgive patient charges when they have trouble paying it, I’ll be damned if I give up one red cent to an insurance company… (my fondest wish for insurance company CEOs is that they be forced to go on the worst plan their company offers. We’ll see how quickly strategies like rescision, pre-existing conditions, “mistakes” in EOBs, etc. etc. get fixed).

  23. chicagogal

    It’s not just ER visits and surgeries that have the multiple provider billing, it’s also the doctors whose practices are located within the hospitals.

    My true story:

    I am uninsured and need to see a pain specialist once a quarter. I switched pain centers early this year for various reasons and have to prepay the doctor appointment. My prepayment is not credited to my account and an upcharged bill is sent afterward, requiring me to call them to properly apply the payment and remove the additional cost (and the billing company refuses to send me receipts!). Additionally, the hospital charges “rent” for the 10-20 minutes you use their exam room, and that bill is equal to or greater than the doctor bill.

    I spoke to the Director of Patient Financial Services – Billing and Collections to discuss why the hospital charges patients to rent their exam room when there are no additional charges if they see a doctor whose practice is located in an office building. Very interesting answer: The hospital provides free space and payment of their malpractice insurance so doctors will locate their practices on site.

    My only option to pay for that first appointment was a title loan that risked my losing the car had I not been able to pay their exhorbitant 300+% interest rate. I thankfully paid that off ok, but the whole experience is a very good example of why our healthcare costs the most and is the worst of all the developed countries.

  24. reslez

    At my workplace we recently got the details of our health plan this year. That’s right, it’s “open enrollment” November. Time to learn how little our employer values us. The gruesome details:

    – The PPO plan is gone. The only option now is a “high deductible” plan with an HSA
    – Premiums on the remaining plans have increased by 1/3. According to the employer, the split is unchanged from last year, so the employer is also paying 33% more
    – The max individual contribution to an HSA is a little more than 3k. I think this just about covers the cost of the jello you’re served during a hospital stay
    – The plan pays nothing until you hit your deductible, approx. $5k, only then does “coinsurance” (at 80% or 60%) kick in. An unexpected $5k expense would just about bankrupt the average American, or drive them into ruinous debt for years on end
    – There is NO CAP on balance billing
    – Out of pocket costs are capped at $12k in network, $24k out of network. Remember what I said about an unexpected $5k expense previously? And of course, there are many scenarios in which you can end up with an out of network provider without your knowledge or consent.
    – Prescription drugs are now fully out of pocket until you hit your deductible. There is no separate deductible for them.
    – Domestic partners/civil unions partners are not recognized for the purposes of an HSA
    – The coverage is so crappy they are openly offering what they call a “Hospital Indemnification Policy” that pays you $2k in the event of a hospital stay. This is a separate cost if you choose it. Yet more risk for the employee to assume.

    And this is supposed to be a pretty good plan. Well, I’m sure the executives are doing great with their gold-plated plans.

    1. reslez

      Also, balance billing does not count toward your deductible. Who wants to bet this will become more and more popular?

  25. Kelly

    Also the insurance companies decide which costs and how much will be applied to your deductible and out of pocket limits. So tha6500 cmaybe actually a lot higher. And remember the deductible and out of pocket is just for the calander year. 1/1 you’re back at zero.

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