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A pharmacy technician counts out a prescription of antibiotic pills. Joe Raedle/Getty Images
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FAQ: Understanding that unexpected medical bill

Danielle Chiriguayo Sep 30, 2019
A pharmacy technician counts out a prescription of antibiotic pills. Joe Raedle/Getty Images

Life happens — including unexpected trips to the doctor’s office or emergency room. But how to deal with an unexpected medical bill? These bills materialize when people are underinsured or forced to use out-of-network providers without their knowledge.

In the latest Marketplace-Edison Research Poll, nearly 60% of people reported fear of an unexpected medical bill. That fear is reasonably held: According to polling earlier this year, 1 in 5 insured Americans have received surprise medical bills in the last two years.

Multiple states, including Texas, have recently passed laws to prevent surprise medical billing. Members of Congress have also brought forward legislation to take action at the federal level.

But how are these bills affecting Americans, and how do you go about managing one? We asked a number of experts.

What exactly are surprise medical bills?

Put simply, said Lacie Glover, insurance specialist at NerdWallet, an unexpected bill is one you think your insurance will cover but isn’t included in your plan.

Generally speaking, unexpected medical bills can be separated into three categories: ambulance, emergency and elective surgery, according to Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy.

And that’s not counting so-called “balance bills,” issued when a provider or service you received was covered by your plan, but your insurance could only pay a certain amount. Some parts of your bill might not stem from your treatment, like facility fees or hospital fees.

Are these types of bills legal?

It depends whom you ask. According to Adler, the legality of the surprise medical bill has been up for debate for the last 30 years. Some lawyers, he said, argue that if no party agreed to see a provider not covered by their insurance and no party agreed to pay the charges ahead of time, these types of bills could be considered illegal under elements of contract and tort law.

Am I alone in facing these surprise medical bills?

According to a Kaiser Family Foundation poll conducted in April, 1 in 5 insured adults have received a surprise medical bill over the last two years. A survey from the University of Chicago puts that estimate at more than half of Americans. The Peterson-Kaiser Health System Tracker, a partnership between The Peterson Center on Healthcare and the Kaiser Family Foundation, estimates that, on average, 18% of emergency visits in 2017 led to an out-of-network charge.

What happens if I can’t afford to pay my bill?

Depending on your financial situation, you can often negotiate an installment-based payment plan with your insurance company, according to Bell. Some health care providers also offer reduced price programs, which can help individuals who are experiencing financial hardship. Paying your bill in cash, according to Consumer Reports, could also help you save money.

You are also entitled to dispute your health bill, which can often be coordinated over the phone or in writing.

“Unfortunately, this is the system we have right now: The patient has to become an advocate and an activist for their own interests. But understand that when you do that, you can save money,” Bell said.

If unaddressed for too long, medical debt can end up at a debt collection agency. Some wriggle room does exist: As of 2017, the top credit bureaus will wait six months after the billing date to report an unpaid medical bill to an agency.

Do consumer protections for these types of bills exist?

Sort of, and exceptions do apply. Some 27 states currently have some form of consumer protections in place. But existing state laws don’t always fully protect consumers — especially ones who have full insurance plans — and states are largely prohibited from regulating those plans.

No federal legislation protecting consumers currently exists.

Are there any organizations I can reach out to if I’m having trouble paying an unexpected medical bill?

A number of nonprofit and state agencies are available to help. Bell recommends contacting your local state insurance department — referred to as health plan navigators in some states — as well as legal service organizations in order to discuss options a consumer can take after receiving a bill.

Across the board and no matter the situation, Glover has this advice when working with both providers and insurance companies: Kill them with kindness.

“They get people yelling at them, people freaking out, people who are anxious all the time,” Glover said. “They will be way more willing to help you and elevate your issue if you are nice and if you go in knowing what you’re talking about.”

Personal finances got you stumped? Send us your FAQ using the form below.

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