Drum notes that hospitals “routinely charge uninsured patients rates that are 3-4x higher than those paid by insured patients”:
It’s shameless and obscene. It’s like kicking a beggar and stealing his coat just because you know the cops will never do anything about it. This is something that Obamacare goes a long way toward fixing. If you’re covered by private insurance through an exchange, you’re not just protected against catastrophic illness. You’re also protected against being charged outrageous rates for non-catastrophic problems—broken legs, asthma attacks, etc.—just because hospitals have the brute power to do so.
New ACA regulations are also supposed to combat this problem. Steven Brill explains:
Section 9007 of the Affordable Care Act instructs the Internal Revenue Service to take away the tax exemption for nonprofit hospitals like Yale–New Haven unless they become aggressive about informing patients clearly of the availability of financial aid and take steps to learn whether patients need such assistance before they hand over their bills to lawyers or debt collectors.
More important for Gilbert and hundreds of thousands of patients like her, Section 9007 says the IRS can now take away a hospital’s tax exemption if it tries to charge patients who needed financial aid more than the average amount paid for services by insurance companies and Medicare. In other words, hospitals cannot try to make people like Gilbert pay the inflated chargemaster prices.
But, for some reason, these regulations have yet to be implemented:
Since Obamacare was signed into law, there have been more than 3.5 million personal bankruptcies filed in the U.S. Some 60%, or more than 2 million, are estimated to have involved medical debt as a key factor. So the delay in writing these regulations has likely had an enormous toll in bankruptcy filings and in damaged credit ratings.
Relatedly, Evan Soltas considers why emergency rooms charge such high prices for minor procedures:
One candidate is that emergency rooms have high fixed costs. It makes no difference whether the patients who turn up in the ER have life-threatening conditions that require medically complex care, or whether they’re there for a few stitches. The staff is on hand 24/7, along with suites full of expensive equipment, sufficient to handle the most serious cases. You pay for all that whether you need it or not. The itemized bills that [Elisabeth] Rosenthal mentions are misleading.
And here’s another way of looking at it. It’s not as though the actual value of a single stitch is $500. Rather, that price reflects the opportunity cost to the hospital of treating you rather than someone with graver (and more expensive) medical needs. And that opportunity cost could very well be thousands of dollars, even for just an hour of medical attention. A recent study in Health Affairs found that between 13.7 percent and 27.1 percent of emergency room visits could have been safely managed at retail clinics and urgent-care centers, saving $4.4 billion a year.
The Dish 