A key feature of our health care system is cost shifting.
If a hospital can’t make ends meet on what it gets from the government programs Medicare and Medicaid, it charges people with private insurance more.
If an insurance company pays out more than it takes in from its customers, it raises the premiums.
If an employer that provides an insurance benefit doesn’t want to pay a higher premium, it redesigns the plan it offers so that employees pay more out of pocket.
But that’s where the cost shifting ends. People with insurance have nowhere to dump the bill.
So, they face some grim choices when they get sick. They can pay for their own care until they meet their deductible, sometimes going into debt. Or they can go without care, leaving prescriptions unfilled, skipping diagnostic tests that were ordered by their doctor, hoping that everything will be OK.
Meanwhile, the cost of care keeps going up, faster than incomes, faster than the rate of inflation.
This is particularly true in Maine, where it’s more expensive to get sick than in most other places in the country.
We are the oldest state in the nation, with more than a quarter of our residents over the age of 60. We are also one of the most rural. That adds up to a relatively high number of people who need care living in areas where it’s difficult to deliver.
Not surprisingly, working Mainers have been hit hard by the cost shifting.
According to a recent study by the Commonwealth Fund, the average out-of-pocket costs for Mainers who get health insurance through work surged by 68 percent over the last decade, growing more than twice as fast as personal income. Average out-of-pocket costs in Maine went from $4,670 in 2008 to $7,879 in 2018.
When a family member is seriously ill and their treatment is spread out over several calendar years, these out-of-pocket costs mount, leading to debt and even bankruptcy – something that’s unheard of in any developed nation.
So, it’s frustrating that when Americans debate health care reform, we rarely get past the corporate structure of insurance companies.
There is no political constituency for cost control. But whether we had a Medicare-style system like Canada or a regulated private insurance market like Germany, we would still have to address why hospital stays, physician visits, prescription drugs and tests are more expensive in the United States than in peer nations around the world.
A good way to force this debate would be stopping the cost shifts.
If hospitals can’t provide services at the federal reimbursement rates, they should use their considerable political power to negotiate better rates instead of sticking private payers with high bills.
If insurance companies pay out too much, they should negotiate better rates with providers instead of just hiking premiums.
And there should be stricter limits on how much cost employers can slough off onto employees and still reap the tax benefits that come with providing insurance.
As long as all the major players have the ability to shift costs onto individuals with insurance, there’s nothing to stop the costs from climbing.
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