By NextBestFitAutomatic exemptions and annual collection through taxes
No money changes hands at the visit. Charges are tallied by the payer, capped by income, waived automatically for low-income people using tax data, and settled once a year on the tax return.
Applies only to standby copays (if activated) and to supplemental plans.
Review ledgerHow this path connects
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Create a charge ledger
- Cap charges by income
- Settle annually on tax returns
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
- Copays keep billing systems alive and still deter poorer patients
Having the payer tally income-capped charges, automatically exempt low-income people, and settle charges through tax returns keeps a price signal without visit-level billing or provider debt collection. A charge ledger and tax integration are still required.
- About $1 trillion a year in administrative cost
Payer tallies and tax-return settlement remove visit-level billing and debt collection from providers while retaining a central charge ledger.
- Weakens incentives for desired behavior
Settling charges later through the annual tax return weakens the price signal compared with charges at the visit.
Who's affected
- Low- and middle-income households
- Copays keep billing systems alive and still deter poorer patients: Point-of-care charges deter care, especially for poorer patients.
- People with ongoing or specialist care needs
- Copays keep billing systems alive and still deter poorer patients: Point-of-care charges deter care, especially for poorer patients.
- Hospitals, clinics, and care organizations
- Copays keep billing systems alive and still deter poorer patients: Copays require collection, exemptions, and billing work.
- Doctors, nurses, and other clinicians
- About $1 trillion a year in administrative cost: Time goes to billing and insurer rules instead of patients.
- People with employer coverage
- About $1 trillion a year in administrative cost: Premiums pay for the administration.
- Taxpayers and public budgets
- About $1 trillion a year in administrative cost: Public programs pay for it too.
- Health administration and software vendors
- Copays keep billing systems alive and still deter poorer patients: Copays preserve demand for billing services.
- Health insurers, brokers, and their shareholders
- About $1 trillion a year in administrative cost: Insurers, billing firms, and clearinghouses earn from the complexity.
- Insurance and billing workers
- About $1 trillion a year in administrative cost: Their jobs exist because of the complexity.
- Transition program for collections staff
Where it has been tried
- Germany: German copayments are capped each year at 2% of gross household income (1% for people with serious chronic illness); amounts above the cap are exempt on application.
- Sweden: Annual high-cost ceiling; care is free after the ceiling for the rest of the year.