Once Again, the States Have it Right
Trying to understand an insurance policy is an exercise in patience. There are endless loopholes and barriers, referrals and preapprovals, fine print and shrinking networks. As complicated as these policies are, it’s easy to understand one thing: they are designed to benefit the insurance company at the expense of patients. This is painfully obvious in the case of vision and dental care, where the bulk of the market is controlled by just a handful of companies who use that leverage to enrich themselves at the expense of doctors and patients. As usual, this problem has been addressed on the state level while Congress is still sorting it out.
Think about the process of getting a new pair of glasses. First, you schedule an appointment with an optometrist. You get an exam, you pick out new frames, your lenses are made at an offsite lab where your glasses are assembled and shipped back to your optometrist’s office. The process seems fairly routine, which is why many Americans might be surprised to learn that their insurance company has designed it to profit at every step of the way.
The large, vertically integrated plans that dominate the insurance market don’t just provide coverage to most patients with vision plans. They also own the labs where lenses are made as well as the most recognizable frame manufacturers. They use their leverage to force doctors to use certain labs often owned by the insurer and sell products manufactured by the insurer, robbing patients of choice and driving up their costs for the financial benefit of the insurer. They also wield this leverage to dictate unsustainable reimbursement rates putting doctors at risk of losing their practice by requiring a transfer of profits back to the insurer. If you think you can escape this high-cost chain reaction by visiting a large retail vision center instead of an independent optometrist, think again – the insurance companies own many of those businesses, too.
As most people know by now, when insurers win, patients usually lose. The heavy-handed practices by insurance companies lead to fewer options, diminish the doctor-patient relationship, and predictably drive-up out-of-pocket costs. Doctors are forced to raise prices when insurers dictate reimbursement rates to them and mandate revenue be returned to the insurer, thereby passing costs along to patients in order to make up for lost margins. One economic study found that insurers’ control over the market only sends benefits flowing in one direction, describing the arrangement as one that “transfers operating margins from providers to plans without benefiting consumers.”
Today, 44 states have laws on the books to stop vision and dental insurance companies from using their market power to dictate prices to providers, drive-up costs, and rob patients of the choices they would have in a truly free market system. However, those laws only apply to plans regulated by those states. For the one-third of vision and dental plans that fall under federal jurisdiction, Congress must act to deliver a solution that protects patients and doctors.
The group of lawmakers who have introduced federal legislation is as bipartisan as the broad collection of states that have passed similar laws. The Dentist and Optometric Care (DOC) Access Act would cover the gap of federally regulated insurance plans and prevent those plans from price fixing, limit insurers from dictating network agreements longer than two years, allow doctors to choose the labs that best fit patients’ needs, and protect patients from rising costs and aggressive insurer behavior.
A bipartisan, widely popular law that protects patients and brings the free market back into healthcare should be an easy call. When insurers set prices, patients and doctors both lose. When insurers must compete on a level playing field, patients see more choices, lower costs, and the freedom to make the best decisions about their health in consultation with their medical provider. The DOC Access Act should be a priority for Congress.
Jerry Rogers is the editor of RealClearHealth and the host of the 'Jerry Rogers Show' on WBAL NewsRadio. Follow him on Twitter @JerryRogersShow.
