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: New laws blocking surprise medical bills are already preventing unexpected bills — here’s how many so far


In the first two months since a new federal law started blocking unexpected medical bills, consumers have avoided two million would-be surprise medical bills — and it could potentially be over 12 million unanticipated bills this year.

This is according to estimates released Tuesday on the early impact of the “No Surprises Act” from the Blue Cross Blue Shield Association and AHIP, a health insurers’ trade association.

The law took effect on Jan. 1 and it prevents patients from getting blindsided by medical bills — and saddled with more medical debt — for out-of-network medical treatment. In recent years, one in five people undergoing elective surgery wound up with unplanned bills, researchers said in February 2020.

Almost a year later, then-President Donald Trump signed the No Surprises Act into law in December 2020.

The law most importantly applies when patients need emergency-health services and don’t have the time or wherewithal to question which doctors and services are covered by their health-insurance plan.

The law bars patients from getting billed above their in-network cost-sharing amount. The protections aren’t air-tight and, for example, “generally don’t apply to ground ambulance services,” according to the Centers for Medicare & Medicaid Services.

After AHIP and the Blue Cross Blue Shield Association polled health insurers in April, they determined 0.23% of all commercial claims could fall under the law’s protections. The survey responses reveals 600,000 eligible claims, but researcher methods assumed an undercount between claims processing delays and historical claims processing data.

The small percentage of potentially eligible claims “may seem rather low but multiplied by the total number of claims in the commercial market, it yields a substantial number of potential surprise bills that have been avoided,” researchers said.

Patient advocates have previously told MarketWatch the No Surprises Act will create a “major difference” for consumers.

“As recently as last year, an emergency visit to the hospital may have left patients on the hook for steep, surprise medical bills,” said Kim Keck, president and CEO of the Blue Cross Blue Shield Association. “The No Surprises Act has not only put an end to this loophole, but it has provided undeniable financial protection to millions of Americans.”

A day ahead of the estimates on avoided bills, Federal Reserve research underscored the financial pitfalls when people need unplanned medical care. The central bank’s annual report on Americans’ economic well being said last year 20% of people surveyed had “major, unexpected medical expenses” in the previous 12 months. The median size of the bill was between $1,000 and $1,999.

Americans have $88 billion in medical debt on their credit report, according to the Consumer Financial Protection Bureau. The three major credit reporting companies, Equifax

and Experian
have said they are overhauling their medical debt reporting methods and the results will blot out nearly 70% of medical debt from Americans’ credit reports.

The share of Americans with medical debt last year decreased, according to recent research from the Urban Institute. But the twist could be temporary, with researchers noting many Americans skipped health care treatment to avoid potential COVID-19 exposure.

The Fed’s Monday report on American’s financial health noted 24% of people skipped some type of medical care because they couldn’t pay for it.

That’s a slight increase from 23% the year before, but down from 32% in 2013, the Fed report said.

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