Opinion

The Republican plot to devour retirees' nest eggs

It's all about a malicious policy called "balance billing"

Perhaps the most monstrous thing about the American medical system — and the bar for that title is high indeed — is predatory billing.

A great many medical providers adjust their prices based on how defenseless the patient is, and bleed the weakest ones for every last red cent, often with preposterously inflated charges for things like aspirin and bandages. A 2015 study looked at the worst price gougers in the country and found 50 hospitals that charged uninsured people roughly 10 times the actual cost of care.

Key to this practice is something called "balance billing," and it's why the American Medical Association is strongly supporting Donald Trump's pick of Rep. Tom Price (R-Ga.) to lead the Department of Health and Human Services, which oversees Medicare. Balance billing is forbidden for Medicare enrollees, but Price wants to allow it — thus allowing doctors and hospitals to devour the nest eggs of thousands of American seniors.

So what is balance billing? It's the practice of billing the patient for the difference between the sticker price and what insurance will pay. So if a hospital visit costs $1,000, but your insurance will only cover $300, some providers will "balance bill" you for $700.

For unscrupulous providers, the method of exploitation is obvious: When doing any sort of expensive procedure, take a rough estimate of the absolute maximum the patient can pay, and jack up the price so the balance hits it. Or if you're short on time, just bill them into the stratosphere, and you'll get whatever the patient has during the bankruptcy proceeding.

Balance billing is basically illegal for Medicare patients, and heavily restricted for Medicaid patients. It was restricted under the Affordable Care Act as well, but only partially. Out-of-network care — increasingly common as insurance networks get narrower and narrower — can still be balance billed even if it is for an emergency, both for ACA plans and employer-provided ones, and doesn't have to be counted toward out-of-pocket limits. People being blindsided by immense out-of-network bills — going to an in-network hospital that employs an out-of-network surgeon they conveniently failed to tell you about, for example — is an increasingly common experience. That is why ObamaCare failed to stop people being bankrupted by medical debt (though it did slow medical bankruptcies substantially).

Permanently obliterating the financial security of helpless families with no or bad insurance as a loved one dies slowly and painfully of a chronic illness is a nice little profit center for providers. But it pales in comparison to the gravy train they might get if they can bring balance billing to Medicare. Seniors use far more care than the younger exchange population, and there are a lot more of them — 55.5 million, versus 12.7 million people on the exchanges. Perhaps most importantly, they're quite a bit richer on average. Many seniors have been scrimping their whole lives to save for retirement, in keeping with decades of agitprop from conservatives and Wall Street, and the more sociopathic among the health-care population are licking their chops at the prospect of being able to devour those nest eggs.

That brings me back to Tom Price and the AMA. In 2011, Price (an orthopedic surgeon himself) introduced a Medicare "reform" bill in Congress that, among other things, would have brought balance billing to the program. This would greatly increase provider and physician revenues, and the AMA eagerly lined up behind it. Physician salaries are of course already none too shabby: An average salary for a primary care doctor in 2015 was $195,000; for specialists it was $284,000. Hey, a few thousand grandparents might lose their retirement, but that fourth BMW isn't going to buy itself.

Now, balance billing on Medicare would not be quite so horrible as it is for uninsured people. Physicians would still have to set up contracts beforehand setting an agreed price — they could not be simply be adjusted at will. But those contract prices are guaranteed to be vastly higher than what Medicare pays now. It will be akin to seeing an out-of-network provider on private insurance now, something that causes thousands of bankruptcies today.

Even in that attenuated form balance billing would also go no small distance toward abolishing Medicare as an actual program of insurance. Medical debt-induced bankruptcies will become a routine occurrence for Medicare enrollees — how can you be said to be insured if too much care might easily end up costing your entire net worth?

It's important to note that a great many doctors are not on board with this plan. Most no doubt got into the business to help sick people, not loot the elderly at their weakest moment in life. The AMA — which mobilized a hysterical deluge of red-baiting to kill President Truman's single-payer insurance plan in 1948 — is probably the most reactionary and selfish of the doctor lobbying groups, but even some of their membership is rebelling at the idea of blowing a huge hole in Medicare. Other groups are dead against it.

It's also important to remember that this is only one part of the developing Republican health-care agenda, which is broadly similar in shifting costs to patients, removing protections for the sick, rolling back insurance coverage, and increasing the income of the rich. Medicaid in particular is in grave danger.

But allowing balance billing in Medicare is a straight-up evil policy. Republicans will attempt to camouflage it as allowing "free contracts" between patients and doctors or similar nonsense. Don't believe a word of it, seniors. They want your retirement money.

Editor's note: A previous version of this article misdescribed balance billing's effect on Medicare. It has since been corrected. We regret the error.

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