The Small Print On Health Insurance

Many Americans have difficulty understanding it:

This year, many people appear to have signed up for narrow plans unwittingly. A survey from the health research group the Commonwealth Fund found that about 25 percent of people with new exchange plans didn’t even know whether they’d bought a narrow network plan. So far, overall satisfaction seems relatively high, though most people are still fairly new to their plans. There are consumers in some states who are suing over their inability to get the care they need.

Stories like those recently chronicled by my colleague Elizabeth Rosenthal, of patients surprised to learn after the fact that they had been treated by out-of-network doctors, seem likely to proliferate if poor transparency about networks prevails.

Jordan Weissmann covered unexpected medical bills last week:

Surprise medical bills are an old issue, yet the Affordable Care Act mostly ignored them. Just a fraction of states have passed laws to protect patients in these circumstances, according to the Kaiser Family Foundation, and some of those statutes are extremely narrow in scope.

The problem, according to [professor Jack] Hoadley, is that it’s incredibly difficult to make insurers and health providers reach a compromise on how much out-of-network doctors should be paid. Some patient advocates hope that a new law that will soon go into effect in New York state could serve as a national model for how to strike the right balance. But just like most obviously outrageous problems in the U.S. health care system that make you pine for a life in Canada, surprise medical bills don’t have a simple solution.

This problem is particularly nasty with regard to ER visits. Nicholas Bagley explains:

How can it possibly be legal for your doctor to charge you out-of-network rates when you show at up an in-network emergency room? And how can we change the law to get at the problem? … Briefly: when you show up at an ER, you’re given an incomprehensible contract to sign. Among the terms you don’t read, you agree to pay the on-call ER physician for her services, whether or not the physician happens to be in-network. Given this “agreement,” the out-of-network physician can name her price.

He proceeds to suggest a few potential solutions.