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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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