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13 Harv. L. & Pol'y Rev. 593 (2018-2019)
The Social Consequences Problem in Health Insurance and How to Solve It

handle is hein.journals/harlpolrv13 and id is 605 raw text is: The Social Consequences Problem in Health Insurance and How To Solve It Matthew B. Lawrence* This Article identfies a problem with contemporary U.S. health care that contributes to balance billing, the absurd complexity of medical bills, and other visible and invisible health care consumer harms. Casting medical providers as bill collectors misaligns incen- tives for both health insurers and providers in ways that make the market for health insurance particularly bad at trading off health care's medical consequences with its often severe social, financial, and psychological consequences. As a result, such 'social conse- quences go unchecked or even exacerbated by an entity-the health insurer-who controls when, where, why, and how insureds must pay medical bills. This 'social consequences problem in health insurance provides a much-needed nor- mative foundation for existing and proposed health insurance consumer financial protec- tions. But the social consequences problem infects all aspects of medical billing for insureds and existing reforms address only its most visible symptoms. The Article therefore calls for and proposes systemic solutions. 'Financial distress corridors would reward or penalize insurers based on the relative financial hardship suffered by their insureds, giving insurers 'skin in the game of their insureds' financial distress and unleashing competition-driven innovation over patient- friendly medical billing. 'Automatic insurer collection andfinancing would require insur- ers (rather than providers) to bill for, collect, and finance insureds' share of their medical costs, removing providers from the adversarial role of bill collector and greatly simplfying medical billing for those with insurance. After proposing and evaluating these systemic reforms, the Article identfies ways existing ad hoc consumer financial protections should be tailored to better address the social, financial, and psychological consequences of health insurance. INTRODUCTION................................................. 595 1. CONCERNS ABOUT HEALTH INSURANCE CONSUMER ABUSES ................................................... 599 A. A Wave of Health Insurance Consumer Financial Protection Mandates............................................ 599 B. The Need for a Fuller Understanding of the Problem with H ealth Insurance........................................ 601 II. HEALTH INSURANCE HAS A SOCIAL CONSEQUENCES PROBLEM ................................................. 605 A. Health Care Carries Social, Financial, and Psychological Consequences ......................................... 605 1. Social Consequences................................. 607 2. Financial Consequences .............................. 608 * Assistant Professor of Law, Pennsylvania State University, Dickinson School of Law. For helpful feedback at various stages of this project the author wishes to thank Glenn Cohen, Barry Friedman, Erin Fuse Brown, Rob Gatter, Timothy Greaney, Mark Hall, Allison Hoff- man, Medha Makhlouf, Elizabeth McCuskey, Kevin Outterson, Nicholson Price, Christopher Robertson, Ben Roin, Rachel Sachs, Bill Sage, Martin Skladany, Jeff Skopek, Sydney Watson, Nancy Welsh, Lindsay Wiley, and participants in the 2017 Health Law Scholars Workshop hosted by the American Society for Law, Medicine, and Ethics (ASLME) at Saint Louis University School of Law, the 2018 ASLME annual conference, and Harvard Law School's Health Law Workshop.

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