Private contracting in Medicare, and health care more generally
I promised to return to this subject after I'd dug into the details a bit more, so here we are. The rumor going around that the health-care bills won't let you pay your doctor for services that your insurer won't provide is simply false. It relies on a misunderstanding of what private contracting means in Medicare, and then a misunderstanding of how it's been applied -- or not applied -- to the health-care bill.
Let's begin with Medicare. At issue here is a provision of the 1997 Balanced Budget Act. This provision is being sold as some liberal plot, but it turns out to be an amendment by Jon Kyl, a Republican senator from Arizona. It was then put into a bill that was passed through the Republican Senate and then the Republican House. It's a pretty safe bet we're not dealing with liberal overreach here.
What the provision does is regulate how much your doctor can charge Medicare for services Medicare covers. Let's say you need a stent. Medicare will pay $10,000 (I've made this number up) for the operation. But your doctor doesn't want to take $10,000. He wants $20,000, and you want to cover that out of your own pocket. In that case, your doctor has to withdraw from the Medicare program for two years. The intent here is to ensure that doctors don't begin routinely overcharging patients for covered services.
If Medicare, however, had refused to allow your stent, then you could indeed have paid out of pocket. Non-covered services are up to the patient and his or her doctor. Eddie's concern was about the times when "healthcare insurance won't cover something," and in those times, the private contracting rules are inoperative.
Private insurers have similar rules. If I have insurance through Kaiser, and I go to a doctor, the doctor can't ask me for $500 above what Kaiser reimburses for the service. If Aetna agrees to pay a hospital $900 for an MRI, the hospital can't ask me to give them another grand. Insurers -- both private and public -- enter into contracts with providers, and those contracts have to be honored or the insurance wouldn't be worth much.
According to multiple Hill staffers, for the purposes of the health-care bills, the private plan's rules are all that would matter. The extension of Medicare's rules was to the public plan. Private insurers continue to use their own rules, whatever they are. And now there's no public plan, so there's no issue here at all. So the summary: Private contracting rules have nothing to do with times when Medicare won't cover a service and they are not being extended into private plans in the bills.
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