May 17, 2014

ObamaCare’s Ministry of Choice [Darleen Click]

Oh my, I bet you didn’t see this coming.

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. [...]

One way the new approach is different is that it sets a dollar limit on what the health plan will pay for a given procedure. Most insurance now pays a percentage of costs, and those costs themselves can vary from hospital to hospital. Now if you pick a more expensive hospital, the insurance still pays the same percentage.

The new strategy works like this:

Your health insurance plan slaps a dollar limit on what it will pay for certain procedures, for example, hospital charges associated with knee and hip replacement operations. That’s called the reference price.

Say the limit is $30,000. The plan offers you a choice of hospitals within its provider network. If you pick one that charges $40,000, you would owe $10,000 to the hospital plus your regular cost-sharing for the $30,000 that your plan covers.

The extra $10,000 is treated like an out-of-network expense, and it doesn’t count toward your plan’s annual limit on out-of-pocket costs.

Posted by Darleen @ 6:20pm
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Comments (17)

  1. bending the curve indeed

  2. that seems pretty sensible

  3. It’s sensible for the bean counters but lousy for the patient. Remember when health care was about what’s best for the patient?

    Good times, good times.

  4. but now we have to provide health cares for a lot of filthy foodstampers who make questionable lifestyle choices

    we can’t just let them have carte blanche

  5. So what if you have to travel overseas to get the procedure, those hospitals are really nice.

    And if you die over there…out of sight, out of mind!

  6. Works for the VA, doesn’t it?

  7. Insurers have always had a “reference” price for treatments, except they called it “reasonable and customary” charges. It’s basically an “average” that the insurer calculates for that treatment in your general geographic area, but the bottom line is that the insurance company picks that monetary number (and they don’t always have to tell you HOW they calculated it).

    If you have a PPO plan, it doesn’t matter unless you go out-of-network for care… because the in-network providers have usually agreed to take the ins co’s reimbursement level as full payment. If you go out-of-network, you can get “balance billed” for the difference between “usual and customary” and what the hospital actually charged. One of the supposed advantages of insurance is that they’re supposed to have used their bulk “buying power” to negotiate a better rate for services.

    THAT seems to be the issue here, IMO. If they’re going to allow any provider to engage in “balance billing” for whatever the difference is between what the ins co decides, and what the hospital decides, that’s a bad financial deal for patients… and it takes away one of the major reasons why you BOUGHT a policy in the first place.

    It sounds like they want to pay “X,” but leave the patient open to unlimited balance-billing, in addition to the 20% share of the cost the patient normally pays (in an 80/20 plan, for instance).

    Not good.

  8. As PJ O’ Rourke once observed, “When buying and selling is going to be regulated, the first things that are bought are the legislators.”

  9. The Empire builds the “Death Czar.”

  10. If they really wanted to avoid an “Obamacare rollout disaster,” they should have avoided passing the damn bill over the objections of the American people.

    The GOP’s amnesty caucus could learn that lesson too.

  11. Not if the objective is to rule, rather than govern.

  12. From the original link..

    However, the strategy appears to be suitable only for a subset of medical care: procedures and tests that are frequently performed, where the prices charged vary widely but the quality of results generally does not. In addition to knee and hip replacements, that could include such procedures as MRIs and other imaging tests, cataract surgery and colonoscopies.

    The key is ‘frequently performed'; IOW the bread-and-butter tests and relatively simple procedures that many hospitals need to sell to recoup monies lost to ‘free’ emergency care provided to uninsured and transients. With this methodology (forced price control) taking hold, watch for the $50 aspirin to now cost $75.00.

  13. Central planning always works better than a market-based approach. Because Science!

  14. It’s hard to rule from under Obama’s bus.

  15. As PJ O’ Rourke once observed, “When buying and selling is going to be regulated, the first things that are bought are the legislators.”

    He also once opined, “If you think health care is expensive now, wait until it’s free.”

  16. I’m betting that the next step towards complete control over the contents of your healthcare wallet will be that the determined payout amounts will never, ever be adjusted upwards due to inflation, but will be stepped downwards due to ‘technology improvements’, ‘market rebalances’, or just because they want to.

    Any takers?

  17. Since the mounting debt puts the monetary system in danger and because a common unit makes central control more difficult and since the government wants to control wages, consumption, etc I wonder if we won’t in our lifetime see the construction imposition of a ‘non universal’ money system. Why have a food pyramid when you can have an exhange pyramid that guides the 4 legged serfs to a paradisical utopian life? They’d spend it worng if they could, so fool proof the whole thing!

    The government will simply pass out health bux, food bux, fuel bux, entertainment bux, transport bux, clothing bux, and then maybe misc bux, for a catch all stuff that the government doesn’t want to control yet for say yard ornaments and Joyce Carol Oates bookmarks.

    And there might be specialized labor bux for a factory to purchase tooling with or whatever.

    Your pay check in the form of a debit card with points on it, would then only be used to purchase rations in the amount prescribed by your personal profile so you can’t buy too much of something or the wrong thing and can be cut off from something if you find some way to harm yourself with it (say if you use all your entertainment bux for comic books and don’t go to the movies much and so are possibly in danger of getting anti-social).

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