States move to put limits on surprise health care fees
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Hey there, and thanks for listening. We want to know more about our audience. Stick around at the end of this episode to hear about how you can help provide feedback and have a chance to walk away with a $75 gift card. Buy a ticket for a concert and you'll often see a facility fee tacked on. You can also see these on medical bills.

I'm David Brancaccio in Los Angeles. First, it's Monday and the Senate will get back to the hammering and sanding on the big spending and tax cutting plan trumpeted by President Trump, who wants something to sign by the 4th of July. Republican infighting over adding to the national debt versus unpopular program cuts is the key challenge here, inflamed further by influencer and businessman Elon Musk's opposition to what's on the table now. One of the key challenges here is the

One provision that both the House and Senate are working on in some form is eliminating taxes on tips for some workers. Gratuities and levels of tipping have been more top of mind with so many checkout systems urging consumers to chip in 20 percent or more by default. And there are new data from payment processing firm Toast that finds tipping varies by region. Here's reporter Daniel Ackerman. Tipping at the level we do is a very American thing. I

I'm Belgian, so tipping is to me a very, very strange phenomenon. You know, why should I tip a taxi driver? Lorenz Debo, a professor of business at Dartmouth, says it took him time to appreciate the nuances of U.S. tipping conventions, even as those conventions changed. The pandemic made the frontline workers heroes. So it made sense to tip your delivery person extra.

But Debo says tipping has continued to proliferate thanks to a potent combination of technology and peer pressure. Think the tip screen on the coffee shop iPad. You know, if the device is turned and everybody behind you sees that you're the one that tips zero, you don't want to do this, right? Not me. But it turns out what people enter on that screen varies based on where they live.

The Toast data found that the most generous tippers are in Delaware. They offer more than 22% on average. The lowest tippers are in California at just over 17%.

But Uri Gneisi, an economist at UC San Diego, says that's not because his fellow Californians are stingy. The $20 minimum wage for fast food workers is a good reason for that. Gneisi says California is among a handful of states where businesses have to pay at least minimum wage, even if workers get tips on top of that. And he says the higher base pay means a more stable income. Yeah.

I really prefer to live in a place in which there is a minimum wage that is respectful and you can live, you can pay your rent with it. But a no-tax-on-tips policy could encourage employers to lower wages, says Jeremy Bearer-Friend, a professor of tax law at George Washington University.

If we start subsidizing tips relative to wages, then we're going to have a greater share of compensation in the form of tips. He says the lowest earners, who don't make enough to be taxed anyway, wouldn't benefit from the policy change. And in the House's version of the budget bill, the deduction wouldn't apply to workers without a Social Security number or to workers married to someone without one.

It's part of a pattern throughout this current administration to target our immigrant colleagues, immigrant family members for different treatment. And for workers who will get the tax break, it could be risky to rely more on tips. Lawrence Debo of Dartmouth says how much a tipped worker takes home at the end of the day doesn't always match the effort they put in. There's lots of discrimination. There is theft. He says raising the minimum wage for tipped workers could be a fairer way to boost compensation.

I'm Daniel Ackerman for Marketplace.

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Go for an x-ray, an ultrasound, or even log into a telehealth consultation and you can get what's called a facility fee tacked on. Could be 15 bucks, could be several hundred dollars. Fifteen states are trying to limit these fees or at least require fair warning. Alex Olgin reports. Kari Green was surprised to see a mystery $92 charge after a visit to her rheumatologist office in Portland, Oregon.

She told lawmakers she was confused why she was being charged a hospital fee for a routine visit at a doctor's office. There's no specialty equipment in the clinic room. There's some crinkly paper on the table, a couple chairs, a blood pressure cuff machine, hand-washing poster on the wall. Oregon lawmakers are considering whether to ban hospitals and affiliated practices from charging these fees for consults or follow-up visits like the one Greene had.

Right now, the government does allow hospitals to tack these fees on to any visit to cover the costs of running an ER ready for disasters. State officials accept that. That makes sense. That's Maureen Hensley Quinn with the National Academy of State Health Policy. What she says doesn't make sense is when patients get hit with these fees for routine office visits. You can prepare for those things.

Why is the charge being levied for that? There's no comprehensive data on the frequency or cost of these fees, but Hensley Quinn says patients have been complaining about them more. For a long time, Congress has talked about a fix, but there's been no action. In the absence of Congress taking this step

States are pursuing prohibiting certain facility fees. Hospitals bill in two categories, one for the doctor's services and the other facility fees can be a catch-all for everything else. And often insurers don't cover the fees. Molly Smith with the American Hospital Association worries limits on one could put vulnerable hospitals in a tight spot.

I mean, hospitals need to purchase a lot of drugs, supplies, pay staff, whether it is, again, nurses or lab techs or even people who keep rooms clean. Connecticut has banned these fees for consultation and follow-up type visits.

I asked Dr. Deidre Gifford, who runs the state office that oversees this regulation, if it's working. Well, depends on how you define working. Fewer patients are complaining about the fees, but hospitals are making more each year from these charges. Gifford fears hospitals may have just upped fees for other kinds of care. This is the problem with one-off, well-intentioned fixes to high health care prices.

Gifford says it's like squeezing a balloon. The costs are still there. They just show up on one part of the bill instead of the other. I'm Alex Olgin for Marketplace.

And Apple wants to be known as the tech trendsetter, but going into the Worldwide Developers Conference on the firm's campus in Northern California that starts today, Apple watchers are not expecting anything blow-your-hair-back cool. More AI is expected, and the Associated Press says one highlight will be new nomenclature for identifying system updates. Hold on to your hats. But there may be surprises at the conference, so we'll be monitoring. In Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report.

From APM, American Public Media. Hey there, it's Bridget, co-host of Million Vazillion, a podcast that answers your kids' big questions about money. There's a lot of talk about tariffs lately, so how do you explain such a complex topic to kids? Of course. A tariff is an extra charge or tax that countries put on goods that are made somewhere else, like in another country. It also goes by the name of duties.

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