Clark Howard's Tips

May 20, 2008

When you have a medical procedure, a bill is generated, the insurer pays a negotiated amount and you have your co-pay. That should be the end of the story. But right now there's a fight in California about who gets stuck with the tab. Doctors and hospitals are furious that they bill one amount, yet the insurers come back saying they'll only pay a fraction of it.

In the push and pull, the weakest player here is the consumer. The doctors and hospitals are trying to pass unpaid costs off to the patient through a practice known as "balance billing." Clark has no idea how this fight will go in the Golden State, but he'll keep you updated. The real solution here would be for customers to know the cost of medical care before a procedure and shop accordingly. But we're nowhere near this being the case.

The Society of Actuaries finds that paying for healthcare is the No. 1 concern of workers, cited by 70% of people. Right now there's a stalemate with employers, medical providers and consumers all hating the system. The only ones who like the system are the insurers.

The problem is we don't have a marketplace where insurers are required to practice normal capitalism. Clark has long been an advocate of vouchers for healthcare. Insurers would then have to compete for everyone's business and there wouldn't be exclusions for pre-existing conditions. This is not a justification for universal healthcare; it's just a call for healthcare vouchers.

Healthcare is a hot button issue for voters in '08. But both parties are stuck in a prior decade with their views. We need to move into the future and vouchers might be one way to get the job done.

Consumer advice courtesy of