You’re a healthy American with comprehensive health insurance. After being stricken with the coronavirus and hospitalized, you end up needing emergency medical care at a different hospital. While you’re unconscious, an air ambulance shuttles you to the new hospital for treatment. You make a full recovery and leave the hospital one week later.
But, the story isn’t quite finished yet. About a month after you’re home, you open the day’s mail and are startled, and sickened, by one particular piece of mail — a bill from the air ambulance service for over $52,000. It turns out that even though your doctors and the two hospitals were covered because they were “in-network” providers, the air ambulance was considered “out-of-network” by your insurer, and it didn’t cover those charges.
This is a true story. It happened to a Pennsylvania coronavirus patient this past summer. And, it’s not an uncommon occurrence. According to a recent Kaiser Family Foundation Tracking Poll, one-third of insured adults ages 18-64 (33%) indicate that their family has received a surprise medical bill in the past two years, including one in six (16%) who say it was because the provider was out of network.
According to CNBC, about a third of working Americans have some type of medical debt, with about 28% of those people having an outstanding balance of $10,000 or more. What’s just as startling is that over one-half of people with medical debt have defaulted on their bills. This medical debt is a burden that many people just aren’t able to carry.
Surprise medical bills have only compounded the problem. The Kaiser Family Foundation cites a New York Department of Financial Services study which analyzed over 2,000 complaints involving surprise medical bills and revealed that the average out-of-network emergency bill was $7,006. Insurers paid an average of $3,228, leaving patients to pay an average amount of $3,778 for an emergency in which they had no choice of who treated them. This is an amount that the vast majority of American households aren’t able to pay in full when they receive the bill.
This is of major concern to many Americans: 65% of the public say they are somewhat worried about surprise medical bills, including 35% who state that they are very worried, according to the Kaiser Family Foundation poll. And, according to the poll, these bills cause more anxiety than being able to make the mortgage or rent payment, pay utility bills, or put food on the table.
In the closing days of 2020, Congress enacted, and the President signed into law, protection for consumers against surprise medical bills. It’s called the No Surprises Act. The act contains critical protection to hold American consumers harmless from the cost of unanticipated out-of-network medical bills.
The new law applies to nearly all private health insurance plans offered by employers, and individual and family health insurance policies offered through and outside of the marketplace. Here are some of the provisions:
- Health plans must keep network provider directories up to date.
- Health plans must cover surprise medical bills at in-network rates. Private health plans must cover surprise bills for emergency services, including air ambulance services and out of network provider charges for services which were provided at in-network hospital and facilities. These out-of-network providers will be paid at the median in-network payment amount under the plan for the same or similar services.
- Balance billing is prohibited. Balance billing, sometimes called surprise billing, is a bill a patient receives from a provider for the difference between the cost of services received and the amount the insurer pays the provider. Out-of-network providers for emergency services cannot balance bill patients more than the applicable in-network cost-sharing amount for surprise bills.
- Bills for excess charges are prohibited. The burden is placed on out-of-network providers to determine a patient’s insurance status and the applicable in-network cost-sharing for the surprise medical bill.
- Specific oversight and enforcement activities are required. The No Surprises Act has teeth — it will be enforced. States may enforce federal requirements against health plans they regulate with federal fallback assistance if it’s determined that states are failing to substantially enforce the stipulations specified in the law.
As we’ve seen, sometimes being treated by an out-of-network doctor is unavoidable. But, there are some steps you can take to make sure your medical bills are reasonable and manageable. Here are a few.
Before planned treatment, not emergency treatment, contact both the medical office and your insurance company to verify that your health insurance covers the procedure or service and that the doctor or facility is in your plan’s network.
If your primary care doctor is referring you to a specialist, ask the doctor to refer you to one that is in your network. The same applies to lab work and imaging centers as well.
Be a price shopper
There are several online resources that can help you estimate what a specific test or procedure might cost in your area. Like purchasing other goods and services, compare several provider's prices with the estimates you received; look for one with reasonable rates that are in line with the estimate.
Your insurer can help you by comparing its negotiated rates for identical procedures at different hospitals in your area. This information can be beneficial for deciding where to receive care.
[ Related read: How critical illness insurance fills the gaps in your health insurance ]
Prepare for emergencies
You can lower the risk of receiving care where you don’t want to by:
- Making a list of the nearest Emergency Rooms and determine which are in your plan’s network.
- Investigating in advance whether local in-network hospital employ their own emergency physicians and don’t rely on outside contractors.
- Looking into whether or not ambulance service is part of your health insurance plan. It isn’t always, and it’s a common cause of surprise medical bills.
[ Related read: How much emergency fund do you need? ]
You can’t relax yet
The No Surprises Act will be beneficial when it takes effect on January 1, 2022. Until then, you’ll need to be a smart consumer of healthcare services whenever possible (emergencies can preclude this). Many family’s budgets are already stretched thin because of the pandemic’s effects; do all you can to avoid surprise medical bills in 2021.
Having grown up in upstate New York, Bob Phillips spent over 15 years in the financial services world and has been making freelance writing contributions to blogs and websites since 2007. He resides in North Texas with his wife and Doberman puppy.
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