Low Cost Health Insurance

When it comes to healthcare surprise billing may come as a shock. Perhaps it hasn’t happened to you, but almost certainly you know someone who has been on the receiving end.  Should there be Federal ‘surprise’ medical billing legislation?

One in five ER visits results in a ‘surprise’ medical billing and even one in ten new mothers may end up with an unexpected additional charge, either a surprise medical billing or a surprise hospital billing.

In this article we shall talk about surprise hospital billing, surprise medical billing, state surprise medical billing legislation and possible federal surprise medical billing legislation.

What exactly is a ‘surprise’ billing? Technically it is called ‘balance’ billing!

First, we must distinguish between elective and emergency treatment. 

ELECTIVE TREATMENT is when circumstances allow you to choose the where, and possibly the when, of your treatment.  Most people will choose a provider, normally a hospital, that is both local and in their insurance network. The term ‘provider’ includes all the services you may require from the surgeon, anesthetist, radiologist, pathologist or any other specialist. You may be able to choose the lead surgeon but you cannot choose the whole team: nor, to be fair, can the hospital.  Quite possibly one or more of the team will be out of your particular insurer’s network.

Insurance companies negotiate a favorable rate with their ‘in network’ providers.  Generally speaking, this is the highest amount your insurer will pay for a particular course of treatment unless they have agreed to a higher rate beforehand.

EMERGENCY TREATMENT is generally as the result of a sudden illness e.g. heart attack, or an accident, most often in the home, at the workplace or on the road. In many cases you may have no choice: the nearest suitable hospital may not be in your insurance network.  Of course, your insurance will meet the terms of your plan but only up to their agreed ‘in network’ limits.

WELL, YOU MAY SAY, NO SURPRISES THERE!  In-network or out-of-network. That is clear. But is it?

Elective.

Your chosen Hospital (Clinic or Health Center) may well be part of your insurer’s network but they cannot guarantee that every one of the team of ‘providers’ committed to your treatment is also ‘in-network’. 

Each member of the team will be paid the agreed network fee for their part in the procedure.  This may be far less than their personal scale of fees AND they are quite entitled to charge you for the ‘balance’. This is an example of a ‘surprise’ medical billing. It may come as a surprise to you!!

At least it explains what balance payments are. The SHOCK comes when you see the amount. Taking the rate paid for similar services by Medicare, out-of-network anesthetists for example can, on average, charge roughly 5x as much and a diagnostic radio therapist 4x as much.

Emergency

Depending on the nature of the emergency, you may be taken to the nearest hospital which may or may not be ‘in-network’.  Ambulance transport may also be in- or out-of-network.  

The same rules as described above will apply.  You will be billed in full for the outstanding amount of your deductible, and depending on your plan, a percentage of the fees you would have been charged if the suppliers had all been ‘in network’ up to the ‘out-of-pocket’ limit. (For an ACA compliant plan this limit is $8,150 individual, $ 16,300 family.)  Some plans may have a lower out-of-pocket limit but you should expect a higher monthly premium.

Above these limits your plan will meet 100% of your covered costs during the plan year, normally January 1st – December 31st.  You should be aware that in any event you will be responsible for ‘surprise’ billings.

This applies to care treatment too.  You may receive ‘Surprise’ hospital billing if you either choose or are obliged to attend a hospital that is not ‘in-network’. This also appliesif any of your carers in hospital or in your home is not in your insurers network. 

How much is a Surprise Billing?

Of course, it depends.  The average surprise billing is over $600 (Rand Corporation 2019). Bike crashes or heart attacks may result in surprise billing ‘shocks’ of tens of thousands of dollars.  

Over 60% of bankruptcies in the US cite medical costs as a major cause!

There is no upper limit!  Some states (27) have introduced surprise medical and hospital billing legislation which restricts balance charges to a fixed percentage (normally 125%) of the payments made to Medicare for the equivalent services.

As yet there is NO federal legislation controlling ‘surprise billing. There IS support in Congress and in the Senate on both sides for legislation but, even if passed, it is not likely to come into effect until 2022.

How can I protect myself and my family?

First, take the time to check your plan.  Is it clear what is and is not covered? Ask yourself: if I knew last fall what I know now, would I do the same thing again?

If the answer is YES that’s fine.  If the answer is ‘I wish I’d known that’, there are certain limits to what you can do, but there are some opportunities to make changes before the next ‘Open Enrollment’.

  1. You may qualify for a Special Enrollment period triggered by a special event e.g. marriage, a birth. Check our blog
  2. You may take advantage of changing to a 5* plan. Check our blog.  Do it now this, window closes on March 31st 2020
  3. If you are already facing a ‘surprise’ bill, talk to your insurer, talk the supplier, talk to your State Department of Insurance.

Over half the States have laws to prevent or limit surprise billings.

DON’T FORGET that as your agent we will work with you to secure the best outcomes.