One reason why it’s smart to keep an emergency fund is so you have a financial cushion to pay off unexpected medical bills. Unfortunately, in the United States, people often face very high healthcare bills even when they have insurance. Medical debt has become increasingly common in the US, and many people have had to file for bankruptcy because of medical bills.
People in this situation often struggle to rebuild their credit. It can take many years of hard work, setting them back significantly when it comes to achieving their financial goals. Luckily, new legislation has been enacted that will help you avoid these unexpected bills and be able to deal with medical debt in a more informed manner.
The Financial Stress of Medical Care in the United States
A key reason why medical expenses are so stressful in the United States is the lack of transparency. Even if you have insurance, you may face charges outside of the expected copay and coinsurance fees. Moreover, when you seek out care, it is virtually impossible to get an answer beforehand about how much it is going to cost. Instead, you end up waiting weeks or months for a bill that could be financially devastating. If you were able to plan ahead, then you could map out proper care and figure out services that are covered and within your network. However, this strategy is not always possible since medical care often occurs in emergencies. When this happens, people tend to go to the nearest hospital whether it’s in-network or out.
The problem with emergency care is that insurance companies do not always pick up the bill when you need to see an out-of-network provider. If that is the case, you may end up being responsible for the entire bill. While some insurers will pay for at least part of the bill for care received on an emergency basis from out-of-network providers, you would need to know your policy’s regulations. However, even if you do, you may not be able to delay care safely. Moreover, some hospitals that are considered in-network may have out-of-network providers working there that end up treating you. This is frequently the scenario that causes crippling medical debt.
What the No Surprises Act Hopes to Accomplish for Americans
The No Surprises Act has been passed by Congress to help alleviate the stress of not knowing about bills. This act will take effect in 2022. When it does, providers will not be able to bill out-of-network patients more than they would patients who are in the network. In other words, you should no longer get stuck with an unexpected bill. This rule only applies to emergency facilities and post-stabilization care as well as air ambulance services. Notably, the bill does not cover land-based ambulance services. In addition, all in-network facilities are held to this same standard even if out-of-network services are rendered there. The bill allows for providers to go into arbitration if they feel that they are not being adequately compensated.
Outside of this major benefit, the No Surprises Act has some additional advantages for Americans seeking health care. A key part of the legislation is a mandate for insurance companies to provide at least 90 days of coverage once an in-network provider moves out of network. When this happens, patients must often find new providers immediately or face lapses in care. This quick turnaround can ruin the continuity of treatment plans. Providing this grace period gives you more time to find a suitable alternative and ensure that the treatment plans from past and future providers align. This rule can prevent lapses in care and encourage you to be conscientious when choosing new providers.
The Limitations Included within the No Surprises Act
Of course, the No Surprises Act comes with some important limitations. While you are safeguarded in many ways, there are some important exceptions to know. As already stated, the bill does not cover ground-based ambulance transport. Beyond that, patients remain liable for bills they receive from out-of-network providers for care that is not delivered on an urgent or emergent basis. In other words, if the issue can wait until you can see your physician, then you should do so. This limitation helps safeguard against abuse of the new rule, which is meant to protect individuals in emergencies.
Furthermore, facilities can inform consumers that the care they are about to receive is out of network. If you signed written consent for this care and choose to move forward, you will receive the full bill.
The other caveat is that this rule largely applies to patients with insurance. However, the rule does provide some provisions for uninsured patients. Under the new law, providers must make a good faith estimate of the charges that will be incurred for the services provided. That way, you would at least know what the bill looks like before you agree to care.