There are a lot of reasons that people get hit with daunting medical bills. But here are two I hear frequently:
- #SurpriseBills: People are being charged the out-of-network rate to see doctors they thought were in their insurance network.
- People who are covered under a family plan have to reach a family deductible – instead of an individual deductible – before their insurance coverage kicks in.
Two bills moving through Sacramento are trying to address both of these situations. The bills passed the Assembly and are awaiting votes on the Senate floor. If they pass the Senate, they'll return to the Assembly for final votes on any amendments. All of this must occur before Sept. 11.
Consumer advocates say these bills are urgently needed. Anthony Wright, executive director of Health Access California, says they will protect people from unexpected out-of-pocket costs, which have the ability to destabilize a family's finances.
Almost one in four Californians with private health insurance received a surprise medical bill – meaning the insurance company paid less than expected – over the past two years, according to a survey from the Consumer Reports National Research Center.
Of those patients who had been hospitalized or went to an emergency department, the survey finds that 23 percent were charged an out-of-network rate when they thought the doctor was in-network. Essentially, this means that these providers hadn't negotiated contracted rates with people's insurance companies, so these patients were charged more.
These charges can sneak up on you if you see an out-of-network anesthesiologist, radiologist or other specialist at an in-network facility, as my co-worker Rina Palta recently learned.
I shared Palta's experience with surprise bills earlier this summer: "We chose a hospital deliberately that was in-network, our obstetrician was in-network, our pediatrician was in-network, but we didn't realize that doctors in the facility might be out-of-network," she said.
It turned out that when her newborn was briefly taken to the neonatal intensive care unit, an out-of-network doctor cared for him. She was charged about $2,200.
Consumers Union is trying to raise awareness of this situation. It's created a hashtag on Twitter: #surprisebills.
Assembly member Rob Bonta (D-Oakland) wrote AB 533. It says that if a patient goes to an in-network facility and is treated by an out-of-network health care provider, the patient would only pay what he would for an in-network provider. The bill would also require out-of-network providers to refund those patients who were charged more than the in-network rate.
New York has already passed legislation tackling surprise bills: Under that state's law, patients are generally protected from owing more than their in-network copayment, coinsurance or deductible on bills they receive for out-of-network emergency services or on surprise bills, as NPR reported.
Among those opposed to the bill is the California Medical Association. It says in a statement that the bill would give too much power to health plans and insurers to determine what they should pay for physician services. It also contends that the bill would give plans an incentive to carry narrow provider networks.
"Under AB 533, health plans will utilize narrow networks because they know that they can always rely on an out-of-network provider at less than the average contracted rate in order to ensure that the plan’s enrollees are receiving the requisite care," the CMA says.
Most health plans require people to reach a deductible before their insurance coverage kicks in.
But things get a little sticky for people who are covered by family plans: Individual patients may have to reach an individual deductible before insurance coverage kicks in – or they may have to reach a much larger family deductible.
That's what happened to 34-year-old Liz Beebe of Los Angeles. Beebe, who sings in the band Dustbowl Revival, has been trying to get to the root of some chronic health problems. This year, she was trying to squirrel away enough money – between her health savings account and savings – to cover a $4,500 deductible, plus other out-of-pocket costs.
Beebe recalls scheduling an MRI earlier this year, thinking the cost of the procedure would put her over her deductible. She says she thought she'd be responsible for some of the imaging and then insurance would finally kick in.
But to her surprise, her provider told her – and her insurance company eventually confirmed – that she had to reach a $9,000 deductible, since both she and her husband were covered under the same family plan.
"I had had some money in savings that I knew was probably going to go to figuring out what was going on with me this year, and so when we found out that the number had jumped from $4,500 to $9,000, it just seemed insurmountable," Beebe says.
AB 1305, also authored by Bonta, would require family health insurance plans to include both a per-individual deductible and a per-individual out-of-pocket limit.
The measure would apply to plans offered outside of the state's health insurance exchange; Covered California already requires that plans and policies sold on its exchange must include per-individual deductibles and out-of-pocket limits.
Stay tuned for updates on these bills and others!