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Major Insurers Routinely Underpaying Claims

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"Major Insurers Routinely Underpaying Claims"

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Nobody could have predicted that a system in which access to health care is controlled by people who earn a living by not delivering health care to sick people could lead to problems:

Congressional investigators have discovered that large health insurers in every region of the country are relying on faulty databases to underpay millions of valid insurance claims.

In a report released Wednesday, the Senate Commerce Committee said insurance companies nationwide have failed to provide consumers with accurate or understandable information about how they calculate “reasonable” or “customary” charges for out-of-network care.

Now a publicly managed health care alternative would face some bad incentives of its own and might have some problems. It’s difficult to know a priori which would be better, though the empirical experience of other countries suggests that it’s the public alternative. But fortunately, we don’t need to just guess which would be better; we can set up a system in which private plans and a robust public option compete side-by-side and see if the private sector can actually deliver a superior service at a better price.

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