Government Needs To Choose Between Helping Insurers And Helping The Insured

We should laugh when the politicians, President Joe Biden included, brag about how much they’ve done over the past decade to make the American health care system better.

To be blunt, things are still a mess.

For the first time in two decades, says the Gallup organization, less than half of Americans are satisfied with the quality of their health care.

According to the January 19 poll, just 48% of Americans think health care is either “excellent” or “good,” while 31% said it’s “only fair.” The remaining 21% called it “poor.” That’s hardly a ringing endorsement of what Mr. Biden and his allies have accomplished.

Quality is a problem. So is cost. And interference in the marketplace. Each time Washington steps in to solve a problem, doesn’t it seem like it creates two more while failing to fix the thing that prompted it to intervene in the first place?

Consider the issue of “shared savings fees.” They – and they’re sometimes called something else depending on the health insurance company administering the plan — refer to fees that are promoted to lower out-of-network costs.

All good except they increase costs, hurt frontline providers, and deliver little to no benefit to patients.  But they do increase insurance company profits because they are management fees imposed by insurers on self-funded plan subscribers as protection against surprise bills incurred by going out of network.

What isn’t mentioned in the sales pitch are the hidden fees that often come with them, driving premiums up. The benefit they provide to policyholders is negligible at best.

In some cases, according to industry analysts, shared savings fees exceed total administrative fees. Plan sponsors may not be aware of the total cost — and that can’t be written off as a matter of caveat emptor. Lack of openness industrywide regarding expenses and fees allows insurers to obscure the amount of revenue they raise.

When the politicians stepped in and enacted the No Surprises Act to make all that go away, they missed the mark. They failed to require insurers to responsibly disclose the yearly fees plan sponsors are charged to help reduce health care prices for millions of American families.

Maybe they thought they’d be rendered unnecessary once the No Surprises Act became law. There’s still an ongoing need to make the process more transparent – which should lead to market pressure to reduce or eliminate shared savings fees altogether.

Politicians shouldn’t have to intervene to make health care in America better. When they try, they fail because they’re not up to the task. The industry has the knowledge, expertise, and credibility to fix the problem if it wants to. It shouldn’t have to wait for the government to start talking about “carrots and sticks” before it does anything.

A more transparent pricing structure for health care and insurance would go a long way toward solving many of the problems that still exist – and that existed before reform became the political football it has become. If shared savings fees continue to be assessed as though they were general “administrative fees,” they will continue to create a perverse incentive for insurers to narrow their networks.

That means costs will rise, not fall, and patients will see their choice of in-network providers continually narrow. That’s the wrong outcome. It would be so much better if the government encouraged transparency and incentivized greater disclosure to workers. They need clarity. They need to know what shared savings fees assessed in employer-sponsored health plans are and why they’re paying for them. That will allow them to conclude, as newly informed consumers, whether they should be paying for them at all.

Peter Roff is a veteran Washington, D.C., commentator, a former contributing editor at U.S. News & World Report, and a former United Press International senior political writer. He now writes regularly for various publications and appears regularly on international television talking about U.S. politics. You can reach him at RoffColumns AT and follow him on Twitter @TheRoffDraft.

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