August 19th, 2009
03:29 PM ET
13 years ago

CNN Truth Squad: Will reform plan mandate prices for doctors' services?

(CNN)–The statement: Cindy of Covington, Georgia, asked CNN: "Why doesn't the government make mandatory prices for doctors and their services? That is the problem! They all charge outrageous prices and they vary from place to place. Will that change under the new plan?"

The facts: President Barack Obama and health reformers in Congress are trying to influence how prices get set by creating a government-run public insurance option that would compete with private plans in a so-called Health Insurance Exchange. They say private doctors, private hospitals, and private insurers will be free to set their own prices.

The public insurance option would be a government-funded, government-run health care program similar to Medicare - the government health insurance program for people age 65 and older - and doctor participation in the plan would be voluntary.

"On the public option, there are various approaches coming from the different committees, but all aim to achieve the goal of increasing choice and competition, which will have the effect of lowering prices," the White House press office said.

Skeptics and opponents of reform argue that private companies might not be able to compete against the government plan. They say government isn't going to pay enough to hospitals and doctors for procedures and costs will be passed along to private consumers. The more people who enroll in the government plan, the fewer people there will be to offset these costs - an environment that would ultimately drive all private insurers out of business, critics say.

"If the new government-run plan were to offer artificially low premiums, over time, it could be a step toward a single-payer system," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the national association representing nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans.

Henry Aaron - a health care expert and senior fellow of economic studies at Brookings Institution, the nonprofit public policy research organization - said "one can speculate on how the law evolves into the distant future," but he said the plan "would establish exchanges" and the "exchanges are not price-setting agencies."

Obama has repeatedly said the plan offers a "marketplace," with a "menu" of "options" - private insurers and the public option.

One of the reform bills, House Bill 3200, says the "Secretary of Health and Human Services shall provide for the offering of an Exchange-participating health benefits plan that ensures choice, competition, and stability of affordable, high quality coverage throughout the United States."

The American Medical Association, the professional group representing physicians, addresses this issue in a statement supporting House Bill 3200. It says "the legislation does not make private insurance illegal" and that the Health and Human Services secretary "would be required to establish payment rates only under the public health insurance option."

The Verdict: False. Health care reformers say they are promoting competition between insurers, not a mandatory pricing system.

soundoff (3 Responses)
  1. Mississippi Mike

    Why do people think that more government interference is good? What has the government tampered with that's turned out better afterward than it was before? Nothing, that's what.

    August 19, 2009 03:31 pm at 3:31 pm |
  2. Fed Up

    Ofcourse it will. How else do you control costs? Your verdict is based on what they say, not what they will do. Isn't the Medicare/Medical reimbursement to doctors controlled? Private insurance sets approved fees with doctors. They are not promoting competition, how stupid do you think we are CNN?

    August 19, 2009 03:36 pm at 3:36 pm |