Currently, there’s a piece of legislation working its way through the halls of Congress that has the potential to alter the entire American health care system. The bill is guided by the best of intentions — the desire to save unwitting victims from the crushing devastation of unexpected health care expenses. But as it so often happens, good intentions don’t translate to good policy. And such is the case with the Lower Health Care Cost Act (LHCC). It’s a well-intentioned law but,if enacted, would pose a threat to seniors everywhere.
Like much of the legislation out of Washington, the LHCC is a knee-jerk reaction to the surprise medical billing crisis. Recently brought to the forefront of the public consciousness by the White House and a bipartisan coalition in Congress, surprise medical bills occur when insured patients receive emergency care from hospitals outside of their network of providers. These sufferers are frequently not in a state to choose the care center themselves. And yet, insurers will often refuse to pay, saddling the patient with bills that can total hundreds of thousands of dollars.
Surprise medical bills can drain a lifetime of retirement savings or force a mortgage default. They can launch a financially stable family into the throes of bankruptcy. All too often, there is no recourse for the victims. And perhaps most terrifyingly, it can happen to anyone.
This crisis is severe, and Congress is right to address it head-on. But rather than fix the issue of surprise medical billing, Congress’ current solution—the LHCC—would only replace one problem with another. And in this instance, the cure is worse than the disease, especially for America’s senior citizens.
As it stands, seniors are already getting a raw deal when it comes to health care. According to one study, the elderly encounter a number of barriers to receiving proper care. Whether it be a doctor’s lack of responsiveness, limited transportation options, inadequate insurance or astronomical premiums, there are plenty of obstacles preventing seniors from getting the treatment they need. Despite having withdrawn an estimated $22 billion from long-term savings to pay for health care, 7.5 million senior citizens are unable to pay for the medicine their doctors prescribe.
Seniors, it seems, have lost faith in the system designed to protect them. More than nine in 10 believe that their health care situation will get worse. And they’ll be right if we allow our government to pass the LHCC.
If enacted, the LHCC would establish a system in which health care providers are paid a “median-in-network rate” for all out-of-network services they provide. The median-in-network rate, of course, would be substantially less than the comparable out-of-network rate. Effectively, the legislation would impose a price control scheme over the entire health care industry, a proposition that will assuredly and predictably backfire.
As is always the case with price controls, the LHCC will create a shortage of medical care. Hospitals, strapped for cash, would be forced to either ration care or increase their fees elsewhere to make up the difference. Either way, seniors would be hit the hardest by the change.
Despite accounting for only 13 percent of the population, seniors represent 34 percent of the nation’s total health care spending. They rely on the services of doctors and hospitals more than any other group in the United States. And as a consequence, older Americans typically report more difficulty affording care than other demographics. By 2029, there will be 14.4 million middle-income seniors, with 20 percent requiring high levels of care. Make no mistake, when health care scarcity strikes, it is seniors who will be left holding the bag.
Despite the bill’s noble intentions, LHCC would bring about that very scarcity. Health care centers, crushed under the weight of the price controls, will be forced to close. The number of available doctors will plummet, and insurance companies will adjust to their lower profit margins by increasing premiums. Seniors — who already struggle more than most with accessibility to care centers — will face not only higher health insurance costs, but less availability as well.
In an attempt to solve one crisis, Congress’ current proposal would create an entirely new one, devastating seniors’ access to health care in the process. But there is good news: there are alternative solutions that don’t harm the most vulnerable among us. Establishing a system of market negotiation and arbitration may be the key to solving this crisis. While America must find a solution to the problem of surprise medical billing, the LHCC certainly isn’t it. The cost is simply too high.
ABOUT THE WRITER
James L. Martin is the founder and chairman of 60 Plus.