Senate-House Deal on Surprise Medical Bills is a Handout to Insurers, But There’s a Better Way

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Congress may soon give the insurance industry its biggest bailout since Obamacare. A few weeks ago, a handful of Republican and Democratic House and Senate lawmakers made a deal on how to address surprise medical bills, which are high out-of-network hospital charges that insurance companies don’t cover and pass onto patients. Insurers, the primary culprits behind surprise bills, spent $50 million on lobbying Congress for a deal like this, which, if passed, would allow them to help the government dictate fixed prices on medical services. In other words, this is a government giveaway to the insurance industry.

Big Insurance lobbyists know that the deal would hurt hospitals and exacerbate doctor shortages, making it harder for many patients to access nearby medical care. In fact, government price-fixing is behind the current doctor shortage. Through Medicare, the government sets below market-value prices for healthcare services, making it difficult for doctors, hospitals, and other medical care providers to stay in business. A 2017 study found that for every dollar hospitals spent on patients, Medicare reimbursed them only 87 cents. This has led to the closure of several medical facilities that couldn’t even break even and has put us on track to be short 120,000 doctors by the next decade.

The latest Senate-House deal on surprise medical bills would expand the government’s power to set medical prices for people who are not even on Medicare. This would worsen America’s doctor shortage and make it even harder for more patients to find accessible, quality health care. States like Ohio, Arizona, and Colorado, which are already facing serious doctor shortages, may find themselves with even fewer doctors.

But there is a way to end surprise bills without government price-fixing, and, at the same time, prevent a massive handout to the insurance industry. Representative Richard Neal has proposed implementing a solution called independent dispute resolution, or IDR, which would protect patients and medical care providers. If a patient receives care from an out-of-network doctor, the insurer wouldn’t be able to dodge the bill and leave patients with the tab. Instead, doctors and insurers can negotiate a fair price, so that patients are covered. Both red and blue states, like Texas and New York, have successfully implemented IDR systems, which have prevented surprise medical bills and stopped insurers from using the government to set favorable medical prices. IDR puts patients, not profits, first.

I was surprised when I saw Republicans—who are skeptical of government intervention—supporting a Democrat-led agreement to expand the already troubling power and role of bureaucrats. Democrats have masked this deal as a solution to surprise medical bills, but Republicans can see that this gives senators like Bernie Sanders and Elizabeth Warren the levers to implement Medicare-for-All and to have the government take over healthcare.

However, I am confident that Senators Mitch McConnell, Cory Gardner, Martha McSally, and other principled conservatives in the Senate, will stop this deal from passing Congress and will prevent the government from further interfering in the free market. Congressman Neal has already made it clear that Big Insurance doesn’t get to decide our nation’s healthcare policy—and I am optimistic that Republicans will stand with him to avoid a healthcare nightmare from becoming a reality.

Ted Alexander is a member of the North Carolina State Senate.