With healthcare on the front of everyone’s minds as Congress continues to formulate a replacement to ObamaCare, here is an idea that could revolutionize the industry and drive costs down tremendously.
One of the largest factors driving up health care costs today is the lack of transparency of the true costs of health care services and the lack of incentives for consumers to pursue high quality, low-cost options. In short, a person doesn’t know how much a certain procedure or test costs and even if they did, they would have zero financial incentive to investigate where to find the best price for that health care service.
This is where having the “Right to Shop” comes into the picture.
Price shopping for medical services can be very difficult and time consuming, as prices aren’t generally accurate, and they vary depending on who’s paying the bill. If you have to price shop through an insurance company, it gets even more difficult.
Health care providers rarely disclose their prices. For those that do, consumers are often not informed as to whether the posted price is for cash, with insurance, a co-pay, Medicare, etc. At times these disclosed prices do not incorporate all necessary costs—for example, an anesthesiologist’s fees.
Insurance companies often post general price ranges for their customers and contract with care providers to change pricing, which is often hidden from consumers as well.
This bill was tabled in committee.
Libertas Institute supports this bill.
The (not so) Affordable Care Act is a federal law that, among many other things, mandates the purchase of insurance. Not many are aware that members of recognized health care sharing ministries are exempt from the mandate. These ministries are faith-based organizations where members voluntarily share costs one with another, to defray expenses much like a traditional insurance system would.
While this exemption from federal law is in place, providing cost sharing program members with the exemption needed from the insurance mandate, Representative Mike Kennedy has sponsored House Bill 113 to provide a similar exemption in state law.
Title 31A of Utah code contains all of the insurance laws for the state. HB113 would make clear that the entire title does not apply to members of a health care sharing ministry. Effectively, this means that state law would reflect reality, namely, that cost sharing programs are not insurance, and should not be regulated as such.
To qualify for the exemption, these ministries would be required to provide notice to members that the ministry is not an insurance plan, and despite a good record of cost sharing to cover each person’s medical costs, the individual him or herself is ultimately liable for all personal medical costs.
This bill passed the House 61-4 and passed the Senate unanimously. It was subsequently signed into law by Governor Herbert.
Libertas Institute supports this bill.
In late 2014, the Utah Insurance Department attempted to shut down operations of Zenefits, an online human resources startup company. This service offers free access to human resources and benefits management software to small businesses; Zenefits earns money when their client businesses choose insurance benefits for their employees through Zenefits as a broker. However, not all clients use them as an insurance broker—and their software is still free to use for all.
The Utah Insurance Department’s “Market Conduct Division” recently ruled that the free software is a “rebate” and violates state statute governing the sale of insurance. The company argued that the division was misapplying the statute, and that their operations are legal under Utah law. In response to the controversy created by the public outcry over this government threat, Governor Gary Herbert issued a statement saying that he was “willing to work with all stakeholders to ensure Utah has the right policy to embrace innovative ideas while protecting consumers.”
To that end, Representative John Knotwell has authored House Bill 141, which makes explicitly clear that free goods or services (such as those offered by Zenefits) may be provided “for free or for less than fair market value” if they “are offered on the same terms to the general public” and that their receipt is not contingent upon receiving an insurance quote or purchasing an insurance product.
Governor Herbert declared November 29th as “Small Business Saturday.” This was a well needed reprieve from the anti-business Thursday just one week prior when the Utah Insurance Department attempted to shut down online HR startup Zenefits, or the previous anti-business Tuesday when the Salt Lake City Council decided to impose unnecessary regulations on ridesharing apps Uber and Lyft. When it comes to creating a business-friendly regulatory environment in Utah, government officials know how to talk, but do they know how to walk?
We applaud the Governor for his recent work to reduce administrative regulations on business but are left to wonder, in light of recent events, if the momentum is beginning to sputter.
In 2013, a San Francisco startup, Thumbtack, surveyed 12,000 small business owners around the country to find out which states provided the best environment for business. They found that Utah was the most business friendly state in the nation and subsequently decided to locate their customer support operation here where they are now growing rapidly. Utah received an A in the regulatory category in the 2013 survey and improved to an A+ in 2014, indicating low regulatory burdens on small business in Utah. Utah has also ranked as the number one state for business for three years in a row by Pollina Corporate Real Estate and tops the list in a number of other rankings.
A Salt Lake Tribune article on the metamorphosis offers the reason given by those in charge. Director Patty Conner stated: “For many people the word ‘exchange’ connotes government, and we want to remind Utah’s small business owners and their employees that we are built on free-market ideals.”
“Built on free-market ideals?” Who wielded the hammer, paid for the construction supplies, and poured the foundation? The government. Even the paragraph directly after Conner’s quote in the article obliterates her claim:
When I first read this story of a volunteer medical/dental clinic in St. George, I was not as awestruck as others might be. A community of volunteer professional healthcare providers coming together to serve those in need is certainly praiseworthy, but is it rare? These clinics are in every major city in America. Many smaller communities have them as well. The National Association of Free Clinics (NAFC) puts the number of these clinics at 1,200 nationwide. There are probably many more that don’t belong to the NAFC or have a slightly different funding or deployment model but still help underserved populations, such as the local cash clinic in my community. So, what makes The Doctors’ Volunteer Clinic of St. George unique? Perhaps Anthony Young, general counsel to the NAFC, said it best:
“It is a rare community [which] demonstrates responsibility for the improvement of their community’s health in such a manner as The Doctors’ Volunteer Clinic of St. George, without seeking government funding…“