Health Insurance’s Secondary Cost Problem image

Harvard Law & Policy Review, Forthcoming
Matthew J.B. Lawrence (Academic Fellow Alumnus)

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From the abstract:

This Article identifies a fundamental problem with health insurance and, so, contemporary American health care. While competition pushes health insurers to minimize the primary costs of their plans—monthly premiums and periodic out-of-pocket costs like deductibles—it does the opposite when it comes to insurance plans’ hidden “secondary costs,” i.e., the financial distress, emotional distress, and decisional burden entailed in actually receiving and paying (or not being able to pay) medical bills. These costs therefore go unchecked, as the absurd complexity of medical bills and headline-grabbing health care consumer abuses like “balance billing” illustrate. The Affordable Care Act exacerbated this secondary cost problem, frustrating its affordability-promoting goals and undermining its popularity.

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