We all know that medical bills can cause a little stress. Unexpected medical bills can cause a lot of it. We try to avoid them—seek preventive care, live as healthy as possible, set aside extra money when possible. But sometimes they are unavoidable. Medical emergencies happen. As a matter of fact, there are 129.8 million emergency department visits in the United States each year.And every now and then we hear the kind of real-life story that nightmares are made of, stories like that of Megan Rothbauer, a 29-year-old Wisconsin woman facing bankruptcy due to expensive out-of-network care received when she went into cardiac arrest. A New York Daily News article cited balance billing as a cause for her more than $250,000 in hospital bills.
“Such circumstances are rare,” says Dr. April Seifert, Data Innovation Lead of HealthCare.com, “but when it does happen, it’s very costly.”
There are numerous reasons a situation such as Rothbauer’s might occur: The inability to tell emergency responders where you wish to seek care, is one. State laws require ambulance drivers and EMTs to take people in emergency situations to the nearest hospital. Limited access to network hospitals can be a scenario in many towns across America, especially in rural settings.
The best things consumers can do include becoming familiar with healthcare laws, their health insurance benefits, and the measures they can take to minimize out-of-network emergency costs.
Emergency services and balance billing under the ACA
You may have heard that emergency care is covered under the Affordable Care Act. It’s true. Emergency services are among the 10 essential health benefits categories that ACA-compliant health insurance must include. Though specific benefits within this category vary from state to state, this EHB requires the following for all qualified health plans:
Coverage for emergency department services will be provided without a pre-authorization requirement or limit to in-network providers; and
When emergency services are received out-of-network, the cost-sharing requirement (i.e., copayment and coinsurance rate) is the same as it would be in-network.
Check with your health insurance company for specifics on out-of-network emergency care, but there shouldn’t be too many gotchas.
“Emergency services are emergency services. These are covered.” says Jeff Smedsrud, HealthCare.com CEO, “What might happen, though, is that something is not considered an emergency.”
So, if emergency services cannot be limited to in-network providers and are subject to identical cost-sharing requirements, how can one be charged substantially more out-of-network?
An out-of-network provider may charge more for the same care than an in-network provider. After your health insurance plan pays the allowed amount, also known as the usual, customary and reasonable amount, you will be charged the difference. This is known as balance billing, the practice of healthcare providers billing a consumer the difference between what they charged and the amount the insurance company paid.
You incur $15,000 in hospital bills. You have already met your annual deductible and must pay 30 percent coinsurance, as outlined in your policy—that’s $4,500. However, your insurance company will only pay $5,000 because that is what such services would be billed in-network. You now owe an additional $5,500.
Balance billing can be a real concern, especially when health insurance plans sold on the state-based and federally facilitated health insurance exchanges tend to have narrower networks, which can significantly limit which healthcare providers and hospitals insured members may visit to receive in-network care. Balance billing is prohibited for in-network care.
State laws on balance billing vary, and some prohibit the practice. Kaiser Family Foundation’s list of state restrictions against balance billing managed care enrollees provides an extensive summary.
Plan ahead for the worst
Know your network and be prepared for emergencies. More likely than not, you will likely be able to tell emergency personnel your preferences. Of course, as mentioned above, state laws vary and you may be transported to the nearest hospital.
“The fear is that during an emergency the person will be unconscious or unable to speak for themselves to indicate where they would like to receive their care,” Seifert says. “That’s not always the case, but a little pre-planning can help.”
She recommends that after you sign up for your health insurance plan, your next step should be to locate an in-network emergency room and urgent care facility and select a primary care doctor. Verify with your health insurance company that they are still in-network. Be sure to ask your insurance company whether the facility, as well as the doctors who practice there, are in-network.
Then, write it down and make sure it’s easily accessible—in a planner, in your phone, on a piece of paper stuck to the fridge. Make sure those you live with know or have access to this information, too. That way, if you are unable to direct where you are taken, these individuals may be able to do so.
Throughout the year, check in with your health insurance plan and make sure your primary care physician and preferred hospital are still in-network.
“Networks change without people’s knowledge midway through the policy year. Insurance companies say ‘you should have checked the network,’” Smedsrud says. “Provider networks change. There is no guarantee that certain providers will stay in that network year-round.”
He also cautions, “There are sometimes discrepancies between what is published about who is in a provider network and who is actually in that network on the day somebody uses services.” As such, consumers who checked the network and are later told they received out-of-network care should be able to make a pretty compelling argument with their insurance company.
Know how to react
If you do receive out-of-network emergency care, be proactive. Make the unknowns known and start discussing options with your insurance company as well as provider billing departments.
“People should find out in advance, if they can, what their bill might be. Let [the provider] know they have insurance.” Smedsrud advises—he recommends consumers also use online tools such as HealthcareBluebook to get a sense of what costs might be. “Find out if there are ways to prepay and get a reduced fee. There is a surprising amount of negotiation that goes on.”
As for the situation mentioned earlier, CBS News reported that Rothbauer was able to work with her insurance company and the hospital where she received care to reduce the total out-of-pocket amount owed.
At the end of the day, we know medical bills of any sort can create financial strain for many Americans. In 2013, more than 20 percent of American adults struggled to pay medical bills, and 3 in 5 bankruptcies were due to medical bills, according to NerdWallet. In 2010, the average medical debt for families reporting problems paying medical bills was $6,500. We cannot always prevent these situations, but we can do our best to mitigate them.
When shopping for a health insurance plan, pay attention to out-of-network benefits for emergency and non-emergency care alike. Carefully consider plan networks. Which providers and hospitals are near where you live and work? Will the plan you select cover them in-network? Is there another out-of-network hospital closer to you, where you could be taken instead? What plan includes that hospital in-network? The answers to these questions may influence you decision.
Visit HealthCare.com to browse plans in your area, and use the HealthCare.com tax subsidy calculator to see if you are eligible for a premium tax credit. If you find you are eligible for subsidies, apply and enroll through your state’s health insurance exchange. If you need help deciding which plan is right for you, call 877-275-0485 to speak with a licensed agent.