Legislators work to revamp how Montanans pay for health care
HELENA – With the future of health care on the federal level unclear, Republican lawmakers in Helena are pushing legislation that could reshape how Montanans access and pay for medical services.
Three bills — House Bill 266, and Senate Bills 100 and 362 — operate under the philosophy that individual states should be able to determine what health care practices are best suited for their residents, and that costs should be lowered.
“Finally, a handful of legislators on both sides of the aisle are starting to target what we view as the real issue — the cost of care,” said Brent Mead, executive director of the Montana Policy Institute, a free-market think tank, in an email.
The bills each seek to tailor health care coverage to Montanans in different ways.
Senate Bill 100, introduced by Sen. Cary Smith, R-Billings, would allow for direct care agreements between providers and patients, allowing patients to pay for treatment outside the confines of insurance.
Senate Bill 362, introduced by Sen. Ed Buttrey, R-Great Falls, would require pricing transparency from health care providers, and would also require them to create “transparency tools” that display treatment costs, allowing consumers to compare prices.
HB 266, introduced by Rep. Nancy Ballance, R-Hamilton, would create a compact of like-minded states that would lobby the United States Congress yearly on health care issues.
Market-driven health care
Each of these bills in some way takes a market-driven approach to health care.
“The fundamental principle of market reforms in health care is to get consumers more information on cost and quality earlier in the process,” Mead said. “Once patients can make informed choices that best fit their needs, then you will see providers respond to the changes in behavior.”
Mead said the conservative approach of focusing on cost more directly helps Montanans, and that a Medicare-for-all approach would simply shift who pays.
“It will change who pays, and how individuals are covered, but health care spending will continue to go up and will continue to consume an unsustainable share of the economy,” Mead said.
Bringing states together
HB 266 is a direct effort to return power to states.
“It just … makes sense that you have a health care system that works for 300-plus million people, that there’s a lot of stuff in there that you don’t necessarily need for the million-some people in Montana,” Ballance said.
“[Congress is] beginning to talk about this compact as a way for states to request their authority back,” Ballance said. “Maybe states really are kind of those places that can experiment a little bit, and try some things with health care.”
Ballance said her bill would bring together 25 or more states to annually lobby Congress to demand autonomy for developing health care plans.
“If you get a plurality of states, then they have a hard time ignoring you,” Ballance said.
Ballance said the states would meet to discuss specific issues they have with the federal health care system. She said, for example, states could request their share of Medicare, Medicaid or Children’s Health Insurance Program funding to experiment with their own unique plans and methods of coverage.
“It’s a way to bring it back, the authority and the money back to the state,” Ballance said.
She said the failures of federal health care systems primarily rest on the fact that they don’t first address the market.
“Every time we run afoul of that, the government has to keep trying to fix it,” Ballance said. “In the process, they usually break something.”
Pricing transparency and direct care
Health insurance as we know it in the United States functions as a risk pool, where individuals pay in, often through their employer, and withdraw money when in need of a medical procedure.
But SB 100 takes a different approach.
SB 100 is the bill that allows individuals, independent of insurance plans, to enter into a contract with physicians, physical therapists, or any other kind of provider to pay for treatment directly.
“This is not insurance,” said Sen. Cary Smith, R-Billings, the bill’s sponsor. “This is more like a situation where you have an agreement with DirecTV, where you’re going to buy a service for a certain amount of money.”
A version of SB 100 was introduced in 2015 by now-State Auditor Matt Rosendale, but was vetoed by Gov. Steve Bullock. Smith said he brought the bill back because of changes proposed by President Donald Trump, as well as what he sees as an ineffective health care system.
“As you try to buy that insurance, we’re hearing things from our constituents like ‘my insurance payment now is higher than my mortgage payment,’” Smith said.
As SB 100 attempts to push health care outside the realm of insurance, others are seeking to bring the overall cost down through transparency measures.
Buttrey said his bill, SB 362, treats health care pricing like other markets.
“Imagine if car dealers didn’t have to post the price of their car,” Buttrey said. “And you simply went and said, ‘I need a four-door sedan,’ and then a month later you got the bill.”
HB 362 bill originally provided a financial incentive for patients who shop for lower prices and go with the cheaper option. That, however, was taken out of the bill when it went to the House after it was opposed by insurance providers.
Jennifer Hensley, representing PacificSource health plans, opposed the bill because of that provision for incentives, despite supporting the idea of transparency.
“The fact is that Montana doesn’t have true competition among providers on a pricing level because we don’t have enough providers to create a nuanced pricing structure,” Hensley said during the bill’s hearing in the House.
Hensley also said incentivizing patients to take the cheaper option would only give them lower quality care.
Buttrey said the bill is still effective without the incentive.
“There was never a requirement to force people to drive the extra miles,” Buttrey said. “Even without the incentive … it’s going to encourage competition.”
Buttrey said he not only wants to increase transparency, but to encourage competition among providers, which he believes will ultimately bring prices down.
He also said the bill would encourage uninsured patients to seek care by finding hospitals that provide it for less.
“We have to lower the cost of care at the providers,” Buttrey said. “Without competition, I don’t really know how you’d do that.”
Michael Siebert is a reporter with the UM Community News Service, a partnership of the University of Montana School of Journalism and the Montana Newspaper Association.