“Reference pricing” another way that ObamaCare will bite into wallets

posted at 2:41 pm on May 16, 2014 by Ed Morrissey

Consumers who bought into the “ObamaCare will bend the cost curve downward” promise have had a tough year or so. First premiums shot upward, and deductibles did the same. Next, insurers sharply narrowed provider networks, forcing many consumers to pay out of pocket if they want to “keep their doctor,” as Barack Obama promised. Today, the Associated Press reports on another part of ObamaCare policy that may render insurance inadequate altogether — and consumers won’t know it until the bill hits:

You just might want to pay attention to the latest health insurance jargon. It could mean thousands of dollars out of your pocket.

The Obama administration has given the go-ahead for a new cost-control strategy called “reference pricing.” It lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements.

Some experts worry that patients could be surprised with big medical bills they must pay themselves, undercutting financial protections in the new health care law. That would happen if patients picked a more expensive hospital — even if it’s part of the insurer’s network.

The administration’s decision affects most job-based plans as well as the new insurance exchanges.

Other experts say reference pricing will help check rising premiums.

How does “reference pricing” work? It treats anything above the flat-rate limit covered by insurers as out-of-network costs, even if a patient is seeing a provider inside the network. Before ObamaCare, insurers would negotiate in-network prices for these procedures, and providers were forced to accept them as payment in full. Now providers will have much less incentive to agree to that kind of pricing structure, and instead go after the patients for the balance.

As if to rub salt in the wounds, the overage won’t count as out-of-pocket expenses. The Obama administration loudly insisted on such caps to protect consumers, and used those caps as proof that the ACA would keep Americans from facing bankruptcy over an illness. Reference pricing all but buries the caps, though. If a patient needed a $40,000 operation but the insurer only had a $30K reference price on it, the patient would have to cough up the other $10,000 plus all of the deductibles and out-of-pocket expenses otherwise under the cap. The AP notes this with some concern:

That’s crucial because under the health care law, most plans have to pick up the entire cost of care after a patient hits the annual out-of-pocket limit, currently $6,350 for single coverage and $12,700 for a family plan. Before the May 2 administration ruling, it was unclear whether reference pricing violated this key financial protection for consumers.

Some experts are concerned.

“The problem … from the patient’s perspective is that at the end of the day, that is who gets left holding the bag,” said Karen Pollitz of the nonpartisan Kaiser Family Foundation.

Yes, this is such an improvement over the system we had before.

Update: I literally had to stop what I was doing when I saw this on Twitter from Gabriel Malor:

Er … yeah. I edited the paragraph in question.


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In essence, getting sick is an expense no one can afford.

Bitter Clinger on May 16, 2014 at 2:47 PM

Bull Hockey on this one. Way back in 1976 I had to pay the amount over what the insurance company decided was a ‘reasonable and customary’ doctors fee for service. Same thing different name.

meci on May 16, 2014 at 2:48 PM

Expensive procedures shall be available only to the very rich (and high government officials who get taxpayers to cover it). Nice how Obamacare help ‘equalize’ things.

Of course, some people are “more equal than others”.

s1im on May 16, 2014 at 2:49 PM

If a patient needed a $40,000 operation but the insurer only had a $30K reference price on it, the patient would have to cough up the other $10,000 plus all of the deductibles and out-of-pocket expenses otherwise under the cap.

LOL. BOHICA, Obamacare “insureds.” Try very hard not to get sick or injured, because if you do — and you want to be treated by a competent doctor — it’s going to cost you big time.

AZCoyote on May 16, 2014 at 2:49 PM

So, there is no such thing as annual limits…nice to know.

Alternate headline: Unexpected rise in healthcare bankruptcies

Patriot Vet on May 16, 2014 at 2:49 PM

So…

I can write poetry until…
I keel over?

Cool.

Thanks Pelosi…

Electrongod on May 16, 2014 at 2:49 PM

Did anyone seriously think Obamacare was going to do anything other than ration care, increase the direct Health Insurance costs to almost everyone who actually pays for their Insurance and limit what will be covered under Obamacare? If you did, raise your hand.

There is one good thing to come out of this, my wife and I are close to 60 and we are covered for maternity care and get free birth control!

Johnnyreb on May 16, 2014 at 2:50 PM

I remember hearing that we needed Obamacare because of all the people having to declare bankruptcy because of medical expenses.

Ditkaca on May 16, 2014 at 2:50 PM

Bite after bite. Before long no one will have a wallet.

Hey, but who needs one.

Obama gonna pay for our health care, gas, mortgage, phone, etc.

He got us covered.

/SNARK

hawkeye54 on May 16, 2014 at 2:51 PM

Anyone know the number to 9-1-1?

I want to complain to the White House about my bill….

Electrongod on May 16, 2014 at 2:52 PM

What was it that Palin said:

Statement on the Current Health Care Debate
.
August 7, 2009 at 3:26pm

As more Americans delve into the disturbing details of the nationalized health care plan that the current administration is rushing through Congress, our collective jaw is dropping, and we’re saying not just no, but hell no!

The Democrats promise that a government health care system will reduce the cost of health care, but as the economist Thomas Sowell has pointed out, government health care will not reduce the cost; it will simply refuse to pay the cost. And who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course. The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s “death panel” so his bureaucrats can decide, based on a subjective judgment of their “level of productivity in society,” whether they are worthy of health care. Such a system is downright evil.

Health care by definition involves life and death decisions. Human rights and human dignity must be at the center of any health care discussion.

Rep. Michele Bachmann highlighted the Orwellian thinking of the president’s health care advisor, Dr. Ezekiel Emanuel, the brother of the White House chief of staff, in a floor speech to the House of Representatives. I commend her for being a voice for the most precious members of our society, our children and our seniors.

We must step up and engage in this most crucial debate. Nationalizing our health care system is a point of no return for government interference in the lives of its citizens. If we go down this path, there will be no turning back. Ronald Reagan once wrote, “Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.” Let’s stop and think and make our voices heard before it’s too late.

- Sarah Palin

The woman was absolutely clairvoyant.

WisRich on May 16, 2014 at 2:53 PM

When does this “reference pricing” start? Nov 5, 2014? (Guy Fawkes Day.)

catsandbooks on May 16, 2014 at 2:53 PM

The Obama administration has given the go-ahead for a new cost-control strategy called “reference pricing.”

I don’t think that means what they think it means.

It lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements.

Un-F@cking believable! That’s a great idea, let insurers set the price they want to pay first. And what constitutes “expensive”? Who decides that? The insurance companies?

Yeah, I don’t see anything wrong with this approach./

Patriot Vet on May 16, 2014 at 2:56 PM

Hussein wants to kill Americans he doesn’t need,
becuz he is black.

burrata on May 16, 2014 at 3:00 PM

I want to complain to the White House about my bill….

Electrongod on May 16, 2014 at 2:52 PM

That’ll be the day…..all operators will be unavailable, and don’t even think about email. WH site is down.

hawkeye54 on May 16, 2014 at 3:05 PM

Because progressives believe that Americans are too healthy, too wealthy, too free, too strong, too educated, too well fed, too industrious, too individualist, too well housed, and too long lived.

How to remedy these conditions? Make them lose everything they have when they fall ill.

Lose you job because you’re ill. Lose you home to pay for care your insurance won’t cover. Lose your peace of mind because you’ve been systematically stripped of your dignity as a human being. Lose you independence because you’re poverty stricken and can’t work and now need welfare to survive. Lose you life because you can’t afford the health care you desperately need.

But didn’t Obamacare do a great job of redistributing your wealth?

thatsafactjack on May 16, 2014 at 3:11 PM

And who sets the reference price???…

PatriotRider on May 16, 2014 at 3:12 PM

I have Blue Cross and it already works this way.

Aplombed on May 16, 2014 at 3:12 PM

I want to complain to the White House about my bill….

Electrongod on May 16, 2014 at 2:52 PM

Let us wait for a troll to explain the process to do that
:D

burrata on May 16, 2014 at 3:13 PM

government health care will not reduce the cost; it will simply refuse to pay the cost.

Details, details.

talkingpoints on May 16, 2014 at 3:13 PM

Don’t forget, you’ve still got to pay that sky high premium at the same time you’re covering the “out of pocket” and the difference of the reference pricing….

and…… In case you missed the obvious, we can probably expect the “reference pricing” to be set close to the Medicare/Medicaid reimbursement rates.

2nd Ammendment Mother on May 16, 2014 at 3:16 PM

Knee,hips,and shoulder replacements are very popular and a real life changer for many people.A real advance in health care.The limit will cause patients to pay almost half for the procedure.Many will just say smack it and live with what they have.Less sales,more layoffs at the manufacturers and less income for docs and hospitals.One more way to get health care cost down.

docflash on May 16, 2014 at 3:16 PM

But at least Obama is taking care of the Vet’s…

PatriotRider on May 16, 2014 at 3:17 PM

Now I see what Nazi Pelosi was talking about when she said that we had to pass the bill to see all those wonderful things in it. They just keep getting more wonderful by the day! sarc/

rjoco1 on May 16, 2014 at 3:18 PM

Just take an aspirin…

PatriotRider on May 16, 2014 at 3:18 PM

Actually, this is something conservatives should find reasonable out of all the crap that is in Obamacare, this actually fits the conservative argument.
Insurance insulates people from the prices of the care they demand. It is one of the big problems with insurance. It is a huge driver of the constant higher than inflation increases in the cost of health care in America. Since people are largely insulated from seeing the price of the care, they rarely ever care about the cost of their care and simply aim to get the most credentialed doctor on the planet to care for them.
This will force people to actually think about what their health care is worth to themselves and if it is really worth spending an extra 50% on getting the one top doctor in the nation to take care of them. This is a conservative principle. Something that is missing in the insurance market for the large part. There is no cost feedback to the people who are insured.

astonerii on May 16, 2014 at 3:27 PM

astonerii on May 16, 2014 at 3:27 PM

You’re right in principle, but wrong on the specifics of this situation and, of course, the politics involved IMO.

Should we tie the cost of procedure to the expense of the premium, etc.? Sure.

In this case, though, the ACA lets the Dems crow about reducing medical bankruptcy, cover more people, etc. while sticking additional costs to the “covered” consumer- and while forcing folks to buy coverage they don’t need (e.g., birth control pills for guys).

We shouldn’t let them get away with trying to have it both ways, which is why their hypocrisy should be pointed out loudly & frequently.

cs89 on May 16, 2014 at 3:33 PM

What determines who in government is given the title ” honorable?”

hopeful on May 16, 2014 at 3:35 PM

So, you know how people who take out student loans to get a degree end up sacrificing the ability to buy a home, or much else, while they’re servicing that debt to the federal government? Sometimes as along as 25 years?

Welcome to the equivalent of owing your soul to the company store for health care.

You’ll receive a bill after your insurer has paid ‘their share’ and that bill will include your deductible, everything within your set caps, and everything over those caps the provider decides was in excess of what they were reimbursed by your insurer.

Welcome to the company store, and if you can’t pay, they’ll seize your assets and garnish your paychecks.

Watch for providers to lobby to get medical expenses listed along with student loans as non-dischargeable debt in bankruptcy.

thatsafactjack on May 16, 2014 at 3:36 PM

The silver lining in Obamacare is it will help lead to the revolution that will put these morons that are ruining our nation in jail or six feet under.

Deano1952 on May 16, 2014 at 3:36 PM

hopeful on May 16, 2014 at 3:35 PM

It’s like the Academy Awards.

They throw their own party, with your money, and then award it to themselves.

thatsafactjack on May 16, 2014 at 3:37 PM

meci on May 16, 2014 at 2:48 PM

You’re partly right- but still mostly wrong. It is possible that it applies this way to you, but it is not the case for many people. Especially if you have coverage through an employer, and get care “in-network,” most of the time there is an agreement that you are not responsible for any “additional” costs after what the insurance has negotiated to pay the provider.

Ed covered this well here:

How does “reference pricing” work? It treats anything above the flat-rate limit covered by insurers as out-of-network costs, even if a patient is seeing a provider inside the network. Before ObamaCare, insurers would negotiate in-network prices for these procedures, and providers were forced to accept them as payment in full. Now providers will have much less incentive to agree to that kind of pricing structure, and instead go after the patients for the balance.

And here’s more detail about some of the specifics:

In point of service (POS) and preferred provider organization (PPO) plans, reasonable and customary charges don’t influence your bill if you stay within the plan’s network. When staying in network you’re often only responsible for a co-pay. And depending on the service, a deductible. Otherwise, the insurance company agrees to pay 100 percent of the provider’s bill. The insurance company is willing to do this because when a provider is in an insurance company’s network, he or she has agreed to set fees for a given service. Therefore, an insurance company knows what your service will cost and eliminates the need to apply reasonable and customary charges.
http://health.howstuffworks.com/health-insurance/reasonable-and-customary-charge2.htm

cs89 on May 16, 2014 at 3:40 PM

Wait. Aren’t coverage caps a sure sign of a “junk insurance” policy?

stvnscott on May 16, 2014 at 3:42 PM

C’mon trolls! Tell me I’m wrong! Tell me how it is different now!

stvnscott on May 16, 2014 at 3:43 PM

For his next trick, Gabe Malor will decide out of the blue that Ed Morissey must be a homophobe.

…That’s his thing now, dontchaknow.

Hawkins1701 on May 16, 2014 at 3:45 PM

Jack
I’d be liking if it wasn’t such a serious issue. Okay, I do lol.

Meci
We had a plan like that years ago but two things make this reference pricing different. I could go to any doctor I wanted anywhere, I could shop around. And an office visit was a lot less expensive then than now. That was before HMOs became such a big thing.

hopeful on May 16, 2014 at 3:50 PM

Ok, I *LITERALLY* want some people dragged out of their DC offices into the streets, then tarred and feathered.

This is not just “oh, I don’t like this, so annoying” behavior, this is *life and economy ruining* behavior on the part of f*cking *tyrants*.

I don’t know why there hasn’t already been violence and bloodshed. The founders would’ve declared war, won it, and been home again already.

This will force people to actually think about what their health care is worth to themselves and if it is really worth spending an extra 50% on getting the one top doctor in the nation to take care of them. This is a conservative principle. Something that is missing in the insurance market for the large part. There is no cost feedback to the people who are insured.

astonerii on May 16, 2014 at 3:27 PM

For what it’s worth, virtually no one looks around to ensure they’re going to “the one top doctor in the nation to take care of them”. Effectively no one does, and effectively never have. Sure, an insignificant statistically non-existent minority may have, but that’s not the problem. That’s a bit of a crappy strawman example to support a pretty decent point that people are removed from the cost.

But *this* is *not* the way to put people in touch with cost; *this* is a way to utterly destroy individuals and families economically, or force them to be unable to get the care they need. Once again, f*cking over *everyone*, ruining *everyone’s* finances, in the name of helping those that didn’t have coverage, and who for the most part STILL DON’T F*CKING HAVE COVERAGE even after all of the f*cking people over, jacking their taxes, wasting countless billions of dollars, etc.

Holy f*ck, I want to hurt some people right now.

Midas on May 16, 2014 at 3:51 PM

astonerii on May 16, 2014 at 3:27 PM

The problem when shopping for health care is the wrong decision can kill you. There is quite a wide spread between hospitals and doctors with good outcomes on various procedures. Sometimes it’s so wide you would think the hospitals involved were deliberately killing their patients. When the reference price gets set too low without regards to outcomes then the medical consumer with these policies may have to decide between the affordable and rolling the dice and the not as affordable and living or at least having a better outcome. With a lot of policies, especially those through the job and particularly my job, docs and hospitals have already agreed to the price.

JohnnyL on May 16, 2014 at 3:58 PM

And who sets the reference price???…

PatriotRider on May 16, 2014 at 3:12 PM

The Secretary shall determine…

The Schaef on May 16, 2014 at 4:08 PM

For what it’s worth, virtually no one looks around to ensure they’re going to “the one top doctor in the nation to take care of them”. Effectively no one does, and effectively never have. Sure, an insignificant statistically non-existent minority may have, but that’s not the problem. That’s a bit of a crappy strawman example to support a pretty decent point that people are removed from the cost.

But *this* is *not* the way to put people in touch with cost; *this* is a way to utterly destroy individuals and families economically, or force them to be unable to get the care they need. Once again, f*cking over *everyone*, ruining *everyone’s* finances, in the name of helping those that didn’t have coverage, and who for the most part STILL DON’T F*CKING HAVE COVERAGE even after all of the f*cking people over, jacking their taxes, wasting countless billions of dollars, etc.

Holy f*ck, I want to hurt some people right now.

Midas on May 16, 2014 at 3:51 PM

Actually, I know more than a handful of people personally who specifically went out of state for medical care in order to get the top doctor in their field. I know two people personally who went out of country to get a higher chance to not have visible scars from their surgeries. I have also read many instances online about the same thing. So your argument that no one does it is a lie.
Did you get cancer? What type is it? First thing to do is find out who has the best remission and survival rates for that condition. Then they start figuring out how to have that person/facility be the one to take care of them. Mayo Clinic ring any bells in your brain? This is why some doctors are able to charge huge fees, far in excess of what most doctors doing the same things charge. Because they have large numbers of people vying to have them specifically take care of them. Their price goes up and then the number two guy is inundated with people. Their price goes up, and the third and fourth …

When my wife was going to get a mole removed we called several places for a quote. The first one had no problem telling me how awesome their doctor was and that he was in extreme demand and followed up with a quote that was close to $6000, he totally was going to keep her from getting a bad scar. We eventually settled on a nearby place for a grand total of $235 on the quote, but then they added a $60 lab fee after the fact. Sure, she has a tiny scar. But if we were paying with insurance. I never would have asked how much it was going to cost. I would have just simply looked up who is the best and went there. Price be damned. Why not? It is not like I am paying the bill.
When I was going to get my wisdom teeth pulled… pretty much the same path, except I did not look for the best at all. I started with the point of looking for the cheapest period. Its a damned couple teeth, not even remotely impacted, just pull the damned things. I paid with a few 50 dollar bills instead of closer to a thousand at most of the other dentists in the area.

astonerii on May 16, 2014 at 4:09 PM

The problem when shopping for health care is the wrong decision can kill you. There is quite a wide spread between hospitals and doctors with good outcomes on various procedures. Sometimes it’s so wide you would think the hospitals involved were deliberately killing their patients. When the reference price gets set too low without regards to outcomes then the medical consumer with these policies may have to decide between the affordable and rolling the dice and the not as affordable and living or at least having a better outcome. With a lot of policies, especially those through the job and particularly my job, docs and hospitals have already agreed to the price.

JohnnyL on May 16, 2014 at 3:58 PM

So, the better option is to not let people notice the consequences of their choices and continue to drive the prices sky high, thereby making government subsidized care more and more in demand rather than letting them face the consequences and giving them chance to straighten things out?
I am a firm believer that consequences are life’s greatest educational tools.

astonerii on May 16, 2014 at 4:13 PM

astonerii on May 16, 2014 at 4:09 PM

So my point is a lie, but you went on to provide two personal examples (your teeth and your wife’s mole) that substantiated my point.

Thanks.

Sure, some folks with cancer and money to spare will go to Mayo and others – not everyone has cancer, and not everyone with cancer goes that route, and even if everyone with cancer did, that’s not remotely close to a majority of total patients, much less all, as your earlier point tried to make about everyone going to the one top doctor in the nation.

Again, effectively no one, in the grand scheme of all patients and all procedures performed, seeks out the one top doc in the nation. If they did, we’d have a small handful of hospitals in the country, period, and all the local ones wouldn’t exist, and all of the local doctors would be in a different line of work.

Your point about people being too removed from the cost is a good one, as I said before – you simply continue to undermine it with hyperbolic examples that aren’t representative of reality, imo.

Midas on May 16, 2014 at 4:33 PM

Seems like an appropriate time to point out that we are paying for the health care of a minimum of 11-20 million illegal aliens health care through emergency rooms alone, and that doesn’t count the funds spent to provide prenatal care and post natal care for infants and mothers.

thatsafactjack on May 16, 2014 at 4:41 PM

Liver transplants for illegal aliens: entitlements and open borders~ Michelle Malkin

The average cost of a liver transplant and first-year follow-up is nearly $490,000, and anti-rejection medications can run more than $30,000 annually, according to the United Network for Organ Sharing, which oversees transplantation nationwide.

Donor livers are also in scarce supply. In California, nearly 3,700 people are on a waiting list for livers, according to the network. Last year, 767 liver transplants were performed in the state. More than 90% of the organs were given to U.S. citizens.

Donor livers are generally allocated through a geographically based distribution system on the basis of how sick the patients are and how long they have been on the transplant waiting list.

Immigration status does not play a role in allocating organs.

Question: Would the Mexican government stand for illegal aliens on its soil demanding such entitlement?

thatsafactjack on May 16, 2014 at 4:54 PM

The Inevitability of Obamacare for Illegal aliens ~ Michelle Malkin

Open borders. Open wallet.

thatsafactjack on May 16, 2014 at 4:56 PM

I don’t know how the leftists will square this with their complaint that we needed Obamacare because so many people were being left having to pay huge medical bills that the insurance company didn’t cover. You know, medical bankruptcies and all.

Grammar Nazi on May 16, 2014 at 5:00 PM

I don’t know how the leftists will square this with their complaint that we needed Obamacare because so many people were being left having to pay huge medical bills that the insurance company didn’t cover. You know, medical bankruptcies and all.

Grammar Nazi on May 16, 2014 at 5:00 PM

Yep; instead of the few people for whom that was true, now it will be true for everyone.

Yay, equality.

Midas on May 16, 2014 at 5:28 PM

Seems like an appropriate time to point out that we are paying for the health care of a minimum of 11-20 million illegal aliens health care through emergency rooms alone, and that doesn’t count the funds spent to provide prenatal care and post natal care for infants and mothers.

thatsafactjack on May 16, 2014 at 4:41 PM

Soon everyone may be doing the same; what’s to prevent someone who has insurance but can’t afford to use it from going to the ER and effectively pretending to be an illegal, insisting they have no ID and no insurance, and getting treated anyway?

Midas on May 16, 2014 at 5:31 PM

So, Obammy has

given the go-ahead for a new cost-control strategy called “reference pricing.”

I thought he promised to lower our healthcare costs, didn’t he? Wasn’t the whole friggin’ point of Obammycare to insure EVERYONE, and therefore increase the risk pool and also increase preventative medicine and thereby lower premiums for all?

And what is the difference between this

lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements.

and a death panel deciding you cost too much to repair?

Obamacare has produced evidence for every single charge against it; all the vast, right-wing conspiracy theories from 2009 and 2010 are true, it seems!

DublOh7 on May 16, 2014 at 6:31 PM

Soon everyone may be doing the same; what’s to prevent someone who has insurance but can’t afford to use it from going to the ER and effectively pretending to be an illegal, insisting they have no ID and no insurance, and getting treated anyway?

Midas on May 16, 2014 at 5:31 PM

Soon the Mexicans will be selling Americans their fake Matricula Consular papers. What a twist.

slickwillie2001 on May 16, 2014 at 6:42 PM

Yes indeed! ObamaCare just gets better and better!

GarandFan on May 16, 2014 at 8:06 PM

The lib-bots are likely going to be thanking their pseudo-savior all the way to the poorhouse.

Thanks to all of you bozos who voted for this Marxist. May you all rot in hell.

hillbillyjim on May 16, 2014 at 8:52 PM

Ever notice how when Democrats come up with a plan to ‘soak the rich’ it ends up kicking the middle class in the teeth?

Maybe they do mean well, but if that is so, then they are completely incompetent. If they are deceptive and evil, then they have that down to a fine art.

s1im on May 16, 2014 at 10:57 PM

Just wait til people realize that unlike in the past when they had a large bill with an individual doctor and he or she had the freedom to work out a reduced payment plan with a patient, now that most doctors are going to end up “owned” by large hospital groups and OCare doesn’t allow cash payments there will not be any “working” out a payment plan. The response will be too bad, so sad.

txmomof6 on May 17, 2014 at 5:53 AM

Anyone know the number to 9-1-1?

I want to complain to the White House about my bill….

Electrongod on May 16, 2014 at 2:52 PM

Do what I do. I just call information to get the number.

BruceB on May 17, 2014 at 7:53 AM

astonerii on May 16, 2014 at 4:13 PM

I think astonerii is right on the principle. Price visibility is crucial to an efficient market and that is the biggest thing that is missing. We are constantly told that a small percentage of patients use up a large percentage of total health care costs. These are patients that are almost always past out-of-pocket caps in their insurance plan and have no price consciousness whatsoever. It does not cost them a penny if the insurance company is paying 100%.

However, I’m not sure that “reference pricing” is the best solution though. Will consumers even know the reference price and get a quote for the final bill up front? Who sets the reference price? Is it really the best to hit a very sick person who requires very costly care with a HUGE out of pocket bill?

I’ve long thought *IF* I was a big govt mandate type guy that the first mandate I’d put in place if I had the chance is a minimum 10% out-of-pocket cost for ALL health care. No co-pays or co-insurance that are below 10% of the true cost of care. This would be a dollar amount that would be manageable for almost everyone, and charities could help out with extreme cases.

This would put extreme pressure on providers to post prices and go a long ways to increase price visibility and competitive market forces. It would set a foundation for easy comparison shopping for health care services.

By the way the 2nd mandate (*if* I was a big govt guy) would be a mandatory annual contribution of 5% of income to an HSA plan with a 50% matching tax credit on the first $2000 into the HSA each year, until the HSA had a minimum of $10,000 for individual and $20,000 for families. As soon as everyone’s HSA’s reached this minimum, within 10 years for most families, almost every individual/family could fully pay for at least 1-2 years of out-of-pocket health costs solely from their HSA. The main problem I see with this is making a family barely scraping by on $20,000 income to dedicate $1000 toward their HSA when they may desperately need the money for other needs. But then, we have mandatory savings over twice greater than this for a failed social security program. Maybe we should follow Social Security’s lead and make the employer pay the 5% so it “doesn’t cost the employees anything“.

willamettevalley on May 17, 2014 at 8:05 PM

Midas on May 16, 2014 at 4:33 PM

I think astonerii’s 2 personal examples were under a situation where his family DID NOT have insurance coverage. Thus he was making that point that without insurance coverage, people would shop around. With coverage, people tend to go to a more expensive doc. Many times VASTLY more expensive, even if not “the top doc in the nation”.

willamettevalley on May 17, 2014 at 8:13 PM

Obamacare was designed to FAIL, then they blame the insurance companies and greedy medical people. The only solution will be for the Government to take over ALL medical care and run it as efficiently as the VA and all other government programs. Single payer Socialized Medicine is the goal, the failure of Obamacare is planned to be the door opener for single payer. In a crises the people are so much easier to sucker into accepting the loss of freedoms, REMEMBER THE PATRIOT ACT? Bush destroyed the Forth and Fifth Amendments to the United States Constitution and “We the People” cheered him and Congress for it.

namvet6869 on May 18, 2014 at 11:45 AM

test ἐγνώρισάς μοι ὁδοὺς ζωῆς, πληρώσεις με εὐφροσύνης μετὰ τοῦ προσώπου σου.

davidk on May 18, 2014 at 4:53 PM