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Op-ed Placement

Republicans, Don’t Miss the Surprise in Government-funded Medicare for All

BY Jason Pye
03/04/2019
Originally Published in The Washington Examiner by Jason Pye on 2/28/19.

Leftist Democrats, led by Rep. Pramila Jayapal, D-Wash., introduced a revised government-funded Medicare for All Act on Wednesday as Republicans ready their opposition and Democratic presidential hopefuls face questions about what Medicare for All could mean and the role government should have in setting rates for private insurers.

Jayapal’s bill largely mirrors a 2017 proposal by Sen. Bernard Sanders, I-Vt., but the heart of every “Medicare for all” proposal to date has been the same: government price controls for private health coverage. The price controls question could be one of the major policy issues of the 2020 Democratic primary and a key way of differentiating the most progressive candidates on the Left from others seeking the nomination, but Republicans are posing the question as well.

Top Republicans have called for hearings on the topic while emphasizing that they oppose it, and House Ways and Means Committee Ranking Member Kevin Brady, R-Texas, stated, “We’re going to pull the curtain back on ‘Medicare for all’ so the American people can actually assess it.” As House conservatives endeavor to “pull back the curtain” on the all-payer rate setting proposal, they might be surprised to find that the heart of the “Medicare for all” approach has been proposed as a healthcare solution on the Right, as well as the Left.

During a recent roundtable at the White House, President Trump’s declaration that curbing surprise medical bills would be a top priority for his administration tracked the momentum underway in Congress, where a handful of Republican and Democratic lawmakers have already begun promoting legislation aimed at resolving the problem. Unfortunately, their focus on the federal government implementing price controls will do little to protect patients from increased healthcare costs and ultimately paves the way for Democrats to make their “Medicare for all” dream a reality.

Work to solve the surprise billing issue began in Congress last fall, and draft legislation released by members of the Senate healthcare price transparency working group offers the biggest surprise yet. The Protecting Patients from Surprise Medical Bills Act is one of several plans that would mandate that the government set payer reimbursement rates for privately insured patients receiving out-of-network care.

It should come as no surprise to find the outspoken champion for an incremental approach to single-payer healthcare, Sen. Michael Bennet, D-Colo., promoting government-set rates, but the fact that a Republican, Sen. Bill Cassidy, R-La., is joining him in leading the charge should concern conservative and moderate Republicans alike.

The approach being championed by Cassidy may sound familiar, these price controls are often referred to as “all-payer rate setting.” Perhaps a better term is: “America’s backdoor to single-payer healthcare.” A single-payer system would eliminate private plans for one government plan, and all-payer rate setting achieves the same outcome by setting one price that every health insurer pays for any given medical procedure, ignoring a whole host of factors considered when providers establish costs for providing care.

Legislation mandating a government-set rate the health plan must pay for the care will do little to ensure the availability and the quality of health service providers within health plan networks. It disrupts the system, creating a disincentive for commercial insurers to design a comprehensive network and could limit patient access to care in the long run.

In addition, underpayments based on Medicare rates have historically led to higher commercial rates that impact patients in the form of higher premiums, deductibles, and co-pays, or some combination of higher premiums and out-of-pocket costs. Even those able to afford coverage may end up with less access to providers for nonemergency care, as setting reimbursement rates for out-of-network care without considering the underlying costs to actually provide the care could lead to longer wait times, fewer nurses, jeopardize vital services such as high risk nurseries and cause more hospital closings, especially in rural areas.

We can all agree that surprises in healthcare are rarely welcomed, especially when it comes to medical bills. But those earnestly seeking a solution to surprise billing shouldn’t settle for something that sets America on a path toward a government-run single-payer system such as Medicare for all.

As House conservatives endeavor to “pull back the curtain” on the single-payer rate setting proposal, they must earnestly evaluate every proposal and continue to take a stand against all proposals that support government-set rates for private health coverage.

There are better ideas that align with bipartisan principles. Once we ensure the patient is protected and has certainty regarding cost-sharing limited to in-network costs, the cure for surprise billing is not all that complicated. If we advance solutions that recognize the dangers of government rate setting and the role both providers and commercial insurers play in ensuring access to high-quality healthcare, market forces and compromise will drive better outcomes for all patients.