- Over 50% of Americans struggle to pay for medical bills due to the complex structure of the health insurance system and surprise bills, particularly from high-deductible health plans and out-of-network providers.
- Surprise medical bills can lead to significant financial and emotional stress, often resulting in families having to make drastic changes such as finding new housing or even declaring bankruptcy.
- The "No Surprises Act" law, effective from January 2022, protects patients from surprise bills by making it illegal for providers to bill patients more than their in-network fee and requires providers to be transparent about balance billing rights.
- To avoid surprise bills, patients are advised to use in-network facilities, confirm if a procedure is covered by their health plan, get information in writing, double-check their bills, and understand their coverage for ambulance services.
- Self-pay can help patients understand the full cost of care upfront and may result in lower costs for those with high deductible health plans. Patients are encouraged to shop around for prices and compare options without involving insurance.
This year, more than 50% of Americans will struggle to pay for medical bills, according to data from Debt.com. When it comes to important medical issues, families should be focused on getting the best care — not worrying about how to pay for it.
But the American medical system has created an unequal playing field, pitting consumers and families up against large corporate entities with far more resources. The structure of health insurance can be unclear and difficult for consumers to understand. Families deserve to know what medical care is going to cost. But all too often, Americans are caught off guard by bills that they expected would be covered by their insurance.
This is especially true for Americans with “high-deductible health plans,” (HDHP) according to Health.com. These plans can be tricky to understand and many people don’t know how they work. People may choose a high deductible health plan because it appears less expensive upfront and offers cheaper premiums. But when the full bill arrives, they may be taken aback.
With high deductible health plans, people have to pay entirely out of pocket for care until they hit a particular threshold (at least $1400 for an individual and $2,800 for a family, according to Healthcare.gov). Some may not have realized they were signing up for a high deductible plan, or their employer might have recently switched insurers.
Others are ambushed by “surprise bills” — when a patient is treated by a provider outside of their insurance network. This is particularly true for emergency care that requires trips to the ER: roughly one in five emergency room visits lead to a surprise bill, according to Vox.
Cascading effects of medical debt
Surprise bills can trigger a domino effect of financial fallout. Families may have to find new housing, go without day-to-day necessities or delay seeking other health care, according to a survey conducted by Kaiser Health News and The New York Times.
When families have no other choice, some even have to go so far as to declare bankruptcy, according to the Kaiser Health News and New York Times survey. Two-thirds of all bankruptcies in the U.S. are tied to medical expenses, according to the United States Health and Human Services.
Then there’s the emotional toll. Navigating these situations can trigger chronic stress, which is linked to a slew of other health challenges, including premature death, according to Consumer Reports. But the good news? There are concrete steps you can take to learn about surprise billing — and how to best avoid it whenever possible.
What leads to surprise bills?
A 2018 survey on health care billing conducted by NORC, a research organization at the University of Chicago, showed that 57 of people surveyed had been surprised by a bill they thought would be covered by their health plan.
This can happen because the ins and outs of different types of health plans aren’t clearly explained. If you have a high deductible health plan (HDHP), you may not realize that none of your medical care (with the exception of certain routine care) will be covered by your insurance until you hit your deductible, according to Health.com. As an example, if you go to the doctor at the beginning of the year, you might get hit with a bill you didn’t anticipate because you likely haven’t reached the threshold yet.
Then there’s “balance billing” — when your healthcare provider bills a patient for the difference between the amount that they charge, and what the insurance company agreed to pay. If your insurance company only reimburses a small amount, you’re on the hook for the rest.
People can also be caught flat-footed by “surprise medical billing,” when a patient is billed for work from an out-of-network provider. When patients need a planned surgery, they might find a surgeon and hospital system within their insurance network specifically to avoid facing a steep bill, according to Health.com. But that patient may receive treatment at some point during the procedure by an out-of-network provider, say an anesthesiologist, without being aware of it.
“Balance billing” is already forbidden in Medicare and Medicaid, according to the United States Department of Health and Human Services (HHS). New rules that took effect in January 2022 also ban this practice for Americans with insurance through employers or commercial health plans.
What the New No Surprise Medical Bills law means for you
Changing regulations could help to protect people from facing surprise bills that can devastate their finances and families. The “No Surprises Act,” a law which takes effect In January 2022, will make it illegal for providers to bill patients more than their in-network fee.
This law will apply for emergency services and some non-emergency services under the umbrellas of anesthesiology, radiology and laboratory services, among others, according to the American Hospital Association. So long as a patient gets care at an in-network facility, they can no longer be ambushed by a “surprise bill” — even if they receive treatment from an out-of-network provider. Providers also have to follow new disclosure rules to be transparent with patients about balance billing rights.
In the meantime, the Biden-Harris administration has introduced interim rules to protect people from facing surprise bills, according to HHS. These interim measures ban surprise billing for emergency services and additional care (like an assistant surgeon or specialist) at in-network facilities. They also ban out-of-network charges without advance notice, among other protections.
How to try and avoid surprise bills
America’s health insurance system can be complex, difficult to navigate and challenging to understand. These tips and strategies from Health.com and AARP.org can help you and your family minimize your chances of getting caught off guard by unexpected medical bills.
- Go to in-network facilities. When planning for a non-emergency procedure, do your research to learn which physicians and facilities are within your insurance network in the region where you live, according to Health.com. You can do this by checking your insurance plan’s website, calling your insurer, or calling a hospital or provider directly. When a provider refers you elsewhere (for lab work, perhaps, or an X-ray) ask if that physician or facility is in your network — and request another referral, if not.
- Ask your provider or insurer if a specific procedure is covered by your health plan. You’ll want to provide the name of your plan, group number and member ID, according to AARP. You can also locate the “Current Procedural Terminology,” known as the CPT code, for your procedure or service. This is a 5-digit code that doctors list on bills and insurance claims.
- Get information in writing. If you call your insurance company about the cost of a procedure, ask for information in writing to have a paper trail if you later receive a bill specifying another amount.
- Double check that bill when it arrives. Procedures may be billed under the wrong CPT code, or even billed twice by mistake. Check each line item to ensure that you’re not being charged for anything you shouldn’t have to pay (and dispute it, if so).
- Look up whether ambulance services are included in your health plan. Transport to the emergency room is a common cause for surprise billing — and some plans don’t cover it.
Tips to navigate unexpected Covid charges
Covid testing is supposed to be free, but some Americans are still reporting surprise bills, according to The New York Times. About 2 percent of coronavirus test bills pass a portion of costs to consumers — which translates to millions of patients facing unexpected charges. These tips compiled by The New York Times may be helpful in navigating Covid charges:
- Seek testing at public sites. States, counties, cities and towns offer public testing facilities, where receiving surprise bills is less common, according to The New York Times. If your region doesn’t have a public test site, try your primary care doctor or a federally qualified health clinic.
- Know your rights and express them. Insurers aren’t allowed to apply co-pays or deductibles for Covid testing. If you have insurance, you should not receive a bill (unless it’s through regular school or workplace testing, which insurers don’t have to cover).
- If you don’t have insurance, use the federal relief fund. If you’re uninsured, a testing site might try to bill you the entire cost of a Covid test. However, the Covid-19 Uninsured Program will cover these costs. Tell the provider about this fund if they try to charge you.
- Double check those codes. If you receive a bill, check if the test was labeled as an office visit or regular laboratory testing (Covid rules don’t apply here, so insurers are allowed to charge for such visits or services). If so, reach out to your provider’s office and ask them to accurately recode the bill.
How self-pay can help
Using self-pay can help you learn about the full cost of care upfront, according to Consumer Reports. This can be especially valuable for people with high deductible health plans.
The following are some additional tips that may help, sourced from Consumer Reports and KTVB. Patients can shop around for prices, compare options and choose a provider or facility without involving insurance at all. How can you do this? When it comes to non-emergency care, look for self-pay prices ahead of time. Many times you will need to ask up front what the cash prices are if you choose to pay cash. Often, this price is lower than your contracted HDHP price.
This can help you find a discount for the service you need. Hospitals are now required to disclose prices for procedures, though some abide by this regulation more than others, according to The Washington Post (and many make this information difficult to track down). However, the penalties being imposed by the government for not being in compliance with new price transparency rules are becoming more severe.
Other pro tips: Ask your provider to list for you the different CPT codes they expect to apply to your bill. Once you have those, you can now shop for care. You can call your insurance company or check their website for prices that correspond with each code. Solv can also help you scout prices in advance. With the Solv ClearPrice Pledge, Solv is partnering with healthcare providers across the country to show self-pay prices for common services — like COVID testing, flu shots and x-rays — to help you make the best choices for you and your family.
Frequently asked questions
What percentage of Americans struggle to pay for medical bills?This year, more than 50% of Americans will struggle to pay for medical bills.
What is a high-deductible health plan (HDHP)?A high-deductible health plan is a type of health insurance plan where people have to pay entirely out of pocket for care until they hit a particular threshold, which is at least $1400 for an individual and $2,800 for a family.
What is a surprise bill in the context of healthcare?A surprise bill refers to a bill that a patient receives when they are treated by a provider outside of their insurance network. This is particularly common for emergency care that requires trips to the ER.
What are the consequences of medical debt?Medical debt can have severe financial and emotional consequences. Families may have to find new housing, go without day-to-day necessities or delay seeking other health care. In extreme cases, some families even have to declare bankruptcy. The stress of navigating these situations can also lead to other health challenges.
What is the No Surprises Act?The No Surprises Act is a law that makes it illegal for providers to bill patients more than their in-network fee. It applies to emergency services and some non-emergency services, and requires providers to be transparent with patients about balance billing rights.
How can one avoid surprise medical bills?There are several strategies to avoid surprise medical bills. These include going to in-network facilities, asking your provider or insurer if a specific procedure is covered by your health plan, getting information in writing, double-checking your bill when it arrives, and checking whether ambulance services are included in your health plan.
How can one navigate unexpected Covid charges?To navigate unexpected Covid charges, one can seek testing at public sites, know and express their rights regarding testing costs, use the federal relief fund if uninsured, and double-check the codes on the bill to ensure the test was not inaccurately labeled as an office visit or regular laboratory testing.
What is self-pay and how can it help with medical bills?Self-pay involves paying for medical care upfront without involving insurance. This can be particularly valuable for people with high deductible health plans as it allows them to learn about the full cost of care upfront. Patients can shop around for prices, compare options, and choose a provider or facility based on these prices.
Solv has strict sourcing guidelines and relies on peer-reviewed studies, academic research institutions, and medical associations. We avoid using tertiary references.
- Many Americans Still Can’t Pay Off Less than $5,000 in Medical Debt. (No date) https://www.debt.com/research/medical-debt-survey/
- How to fight an outrageous medical bill, explained. (April 1, 2019) https://www.vox.com/2019/3/22/18261698/how-to-fight-expensive-medical-bill
- The Burden of Medical Debt: January 2016 Results from the Kaiser Family Foundation/New York Times Medical Bills Survey (January 2016) https://www.kff.org/wp-content/uploads/2016/01/8806-the-burden-of-medical-debt-results-from-the-kaiser-family-foundation-new-york-times-medical-bills-survey.pdf
- HHS Announces Rule to Protect Consumers from Surprise Medical Bills (July 1, 2021) https://www.hhs.gov/about/news/2021/07/01/hhs-announces-rule-to-protect-consumers-from-surprise-medical-bills.html
- Could Your Medical Bills Make You Sick? (September 29, 2020) https://www.consumerreports.org/medical-billing/could-your-medical-bills-make-you-sick/
- How to Avoid Surprise Medical Bills in 4 Steps (April 14, 2021) https://www.health.com/money/surprise-medical-bills
- NORC AmeriSpeak Omnibus Survey: Surprise Medical Bills (August 2018) https://www.norc.org/PDFs/Health%20Care%20Surveys/Surprise%20Bills%20Survey%20August%202018%20Topline.pdf
- Detailed Summary of No Surprises Act (January 14, 2021) https://www.aha.org/system/files/media/file/2021/01/detailed-summary-of-no-surprises-act-advisory-1-14-21.pdf
- How to Avoid Surprise Medical Bills (August 8, 2019) https://www.aarp.org/money/credit-loans-debt/info-2019/avoid-surprise-medical-bills.html
- 5 Tips for Avoiding Surprise Virus Test Bills (December 2, 2021) https://www.nytimes.com/interactive/2021/12/02/upshot/tips-avoid-covid-test-charges.html
- How to Avoid a Surprise Bill for Your Coronavirus Test (Published August 18, 2021; updated December 2, 2021) https://www.nytimes.com/2021/08/18/upshot/coronavirus-test-bill-cost.html
- Nearly all hospitals flout federal requirement to post prices, report finds (July 16, 2021) https://www.washingtonpost.com/health/2021/07/16/hospital-cost-transparency/
- How Paying Your Doctor in Cash Could Save You Money (May 4, 2018) https://www.consumerreports.org/healthcare-costs/how-paying-your-doctor-in-cash-could-save-you-money/
- Cash vs. insurance: A little-known option could save you money on medical bills (February 12, 2019) https://www.ktvb.com/article/news/health/paying-with-cash-or-insurance-little-known-way-to-possibly-save-on-medical-bills/277-3075953b-6e78-4587-8f0c-ef0da35554b2