Many Americans purchase health insurance under the impression that doing so will protect them from exorbitant, one-time costs associated with medical care. Insured patients pay premiums every month rather than having to worry about paying a large medical expense at once. In some instances, however, insured patients visit their doctors and receive a costly, unexpected bill. This is a consequence of the current structure of health insurance and provider networks, wherein insurers and health care providers negotiate to accept discounted payments as payments in full for services in exchange for sending patients to those providers. When patients visit out-of-network providers—those who haven’t agreed to these discounts—they can lose the benefit of their insurance. The provider may charge them the entire, nondiscounted price for a service—and insurance may not cover any of the bill.
Even when their insurance covers part of the bill, patients are often left to pay the difference between the insurer’s payment and the high, nondiscounted price that the provider charges. This practice is called balance billing—or surprise billing, when the bill is unexpected—and it’s a practice that Americans want addressed. A 2018 Kaiser Family Foundation poll found that two-thirds of Americans are worried about receiving an unexpected medical bill. Solving this problem has garnered bipartisan support, and members of Congress from both sides of the aisle have introduced legislation on the topic. Some state governments have attempted to address the issue, but federal law and state inaction has left many patients still exposed to this harm.
Federal action is necessary to protect against surprise billing
Surprise billing must be addressed at the federal level for two reasons. First, many states have not acted on the issue. Only six states have enacted comprehensive protections against surprise billing, and just 15 more have any patient protections at all. Protection from surprise billing should not depend on where a patient lives; a patient living in Tennessee or Idaho should have the same security in what they will owe as a person living in California or Maryland. Second, even if every state were to pass comprehensive reform, many people with employer-sponsored insurance would not be protected from surprise billing due to limitations to state regulation under the Employee Retirement Income Security Act (ERISA) of 1974.