New Rule Could Save Consumers From Surprise Medical Bills

Medical bills can drive consumers into debt. A new rule could make unexpected bills less common.

Healthcare costs can be quite expensive, even for people with health insurance. Sometimes, those costs can come as an unpleasant surprise.

It's not unheard of to get treatment at an in-network hospital or facility, only to find out one of the doctors who treated you is out of network, leaving you on the hook for that bill instead of having your insurance company cover it. In fact, these occurrences are so common that Americans routinely wind up with medical debt because of unexpected bills. That debt can even lead some consumers into bankruptcy, which comes with its own set of negative consequences.

A new rule seeks to curb that practice. Once it takes effect, consumers may not fall victim to surprise medical bills quite as frequently.

Eliminating a key source of financial stress

When patients can plan ahead for medical care, it's easier to avoid a scenario where an out-of-network provider needs to be used. But patients don't get that luxury in an emergency situation. Rather, they're taken to the closest ER and are treated by whoever's available.

That's where so many people get into trouble. It's estimated that 20% of emergency care claims from private insurers include an out-of-network component, reports the Kaiser Family Foundation. While some insurance companies offer some coverage for out-of-network providers, it's also common for patients to end up having to pick up the entire out-of-network bill themselves.

The No Surprises Act is looking to make that practice a thing of the past. Beginning in 2022, there will be few situations in which a patient can receive a bill for out-of-network care they believed would be covered by their insurance company. This new rule should especially benefit patients in emergency situations who don't have the time or luxury to dig up the details on every provider they encounter.

The No Surprises Act also requires insurance companies to provide patients with at least 90 days of coverage if an in-network provider moves out of network. That way, patients aren't forced to switch providers immediately if such a move happens while they're in the middle of a treatment plan.

Now, the No Surprises Act does have its limitations. Patients can still get a bill for out-of-network care if they visit an urgent care clinic for non-emergency purposes. Also, if consumers are informed that the care they're about to receive is out of network and they give written consent to move forward, then they may get billed for that care even once the new rule takes effect.

A positive development for medical bills

When surprise medical bills arise, consumers are often forced to put those charges on their credit cards and pay them off over time. The result? Hefty interest charges and high balances that can cause a major reduction in a person's credit score.

The No Surprises Act should help spare consumers from surprise medical bills that have long wreaked havoc on their finances. Consumers should also read up on the No Surprises Act so they know what protections they're entitled to come 2022.