YOU ONLY THINK YOU ARE COVERED – For Many, There is No Way to Know What the Hospital Will Cost
Born 3 weeks before his due date, a newborn couldn’t breathe and was taken to the neonatal intensive-care unit where he spent 10 days to survive and go home healthy. The family got their health insurance from the Georgia’s Blue Cross Blue Shield Plan. The father had torn his Achilles tendon earlier in the year and had already used their $5000 deductible. The mother’s doctor and hospital were both listed as in-network providers, so they did not expect to pay any more out of pocket for their son’s birth.
But there was a $1,746 fee for an initial hospital visit, and a $240 per-day charge for supervision of care for a total of $4,279 in the end. Wasn’t this to be covered by insurance? While the local hospital was considered an in-network provider, the neonatal intensive-care unit at the same facility was not. And everything else was also out of network. But the family was told none of this. Their health plan ended up reducing that bill to $2,469 and capping the family’s total out-of-network payments at $12,000, but they still had to pay $7,000 more than they had budgeted.
A man’s bladder-cancer screening was performed at an in-network hospital that contracted with an out-of-network anesthesiologist group. The only solution would have been to not have the procedure and they ended up paying $664 for that service – a bill they fought for over a year before it was eventually refunded.
A woman had to have two surgeries, one on each thumb, for arthritis and she chose an in-network surgeon and facility. She had already reached her in-network deductible of $3,500, and didn’t expect to pay more. But 6 months later received a $6,300 out-of-network bill as the anesthesiologist on duty the day her procedure was out of network and that the bioengineered implant that her doctor had used in the procedure was not covered by her insurance.
By the time that bill had arrived, she had already had the same procedure performed on her other thumb, using the same surgeon, anesthesiologist and implant and is expecting another $6,300 hit. If you include her $568 monthly premium, her in network deductible, plus the $12,916 in surprise bills, she expects to pay $22,916 for her health care last year alone. That’s close to her after-tax tak-home pay and is totally unaffordable.
But this family has plenty of company. An estimated 1 in 3 American adults with private health insurance falls victim every two years to “surprise medical bills”. Such bills arise when an in-network medical facility contracts with an out-of-network medical staff, including emergency-room doctors, anesthesiologists, surgical assistants or lab technicians. Depending on the service, average out-of-network charges can be up to 14 times more than what the government would pay for a Medicare patient. From a few hundred dollars for a person reading a lab report to tens of thousands is someone’s spent days in an in-network hospital but the attending physician is out of network.
The Affordable Care Act goes part of the way toward fixing this problem, but it leaves two gaping loopholes. The first has to do with how much people can be asked to pay out of pocket. The ACA caps that amount at $6,850 for individuals and $13,7000 for families. But those caps only apply to in-network care. If patients go to an out-of-network facility, the amount they pay doesn’t count toward that annual cap. The second loophole has to do with emergency-room visits. The ACA requires insurance companies to bill patients in a medical emergency as if they are in-network, even if they end up at an out-of-network hospital. So if a patient pays a 20% co-pay at an in-network facility and a 60% co-pay at an out-of-network one, insurance must abide by the in-network co-pay.
That’s a huge step in the right direction. But it doesn’t solve the problem of surprise billing. Even in an emergency, doctors and other medical staff who are not in a patient’s network can charge separately for their services. The out-of-network doctor can still bill the patent the difference between what the insurer pays and what the doctor charges.
In most states, hospitals are not legally required to tell patients if the medical staff with they contract are n network, and patients themselves often don’t know which specialists will be involved in their care, Even the savviest and best-informed patients can be ambushed by surprise bills.
In some cases, that happens when a hospital maintains an exclusive contract with an out=of-network specialist group. In Texas, for example, 20% of hospitals that the top three insurance companies considered in network had no in-network emergency-room doctors on staff. One of the top three had no in-network at more than half its ni-network hospitals. They have you in a trap.
In other cases, patients receive surprise medical bills after they’ve gone to an in-network hospital and seen an in-network doctor but unintentionally received a type of medical devise or drug that their insurance company does not cover. Often the doctor doesn’t know if something is covered.
For most Americans, health care is the single biggest annual expense. Last year alone, the average family of four covered by a typical employer sponsored health plan spent $10, 473 in premiums and other out-of-pocket costs. That’s almost 20% of the median American family’s annual income of $53,000 (Employers spend an average of $14,198 more per family.) While there are no studies showing how much Americans pay in surprise bills every year, 41% of families in Georgia alone had received one, and the problem is getting worse. As hospitals and physicians’ groups band together to negotiate higher reimbursement rates, insurance companies respond by narrowing their network coverage to reduce costs.
Efforts to fix the problem through legislation have been halting, largely because the issue pits three powerful players in the health care industry – hospitals, physicians’ groups and insurance companies – against each other. Those groups all know that any new law shielding patients from surprise bills would require one of them to eat those costs instead, puts the onus on insurance companies to include more hospital-based physicians in their networks.
It should be insurance companies’ responsibility to tell patients which providers are covered and some have been sued on the grounds that they were not transparent about which providers were in network. Insurance companies feel besieged. With the cost of health care ticking up by an average of 6% a year for services and nearly 14% for pharmaceuticals, insurers feel they have o choice but to negotiate reimbursement rates with doctors to keep premiums and deductibles as low as possible. Not all oblige. The choose not to participate in a network plan for a variety of reasons, but the main one being that they want to charge higher rates for their services. With a pricing structure like that, patients are being asked to write a blank check.
At least 10 states have attempted to tackle the problem of surprise billing, most stop short of prohibiting it outright. In California and Florida, providers are no longer allowed to issue surprise bills in medical emergencies. In New York, providers and insurance companies must now submit to arbitration to determine who pays and how much. Obama’s 2017 budget includes bills that require hospitals to inform patients about out-of-network staff and provide an estimate of how much a procedure will cost. But, despite bipartisan support, it has little chance of passing this grid-locked Congress.
Most patients may not have a specific solution but feel it’s a moral issue. Some can, with difficulty pay their bill eventually, but there are lots of people out there who couldn’t.