Millions of emergency room patients could face financial ruin — even if they deliberately seek care at hospitals covered by their insurers.
That's the disturbing finding of a new study published in the New England Journal of Medicine. Conducted by two Yale professors, the study shows that one in five ER visits involve doctors who are not in the same insurance network as their hospitals. The patients treated by those out-of-network physicians are forced to pay for a portion of their care out-of-pocket. The average out-of-network ER charge is $600.
A bill that size spells disaster for many patients. About half of Americans wouldn't be able to cover a surprise $400 bill without selling something or borrowing money.
It's a travesty that, in the midst of medical emergencies, people who specifically head to hospitals covered by their insurance plans are still getting hit with huge bills. Unfortunately, these out-of-network ER charges are just the latest tactic that health insurers have devised to shift costs onto patients.
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The contracts that hospitals establish with health insurers typically don't cover ER doctors. Those physicians have to negotiate with insurers directly. Many insurers decide ER physicians' fees are too high and cut them out of coverage networks.
Patients hardly ever suspect that the ER doctors at in-network hospitals could be out-of-network. Take Candice Butcher, a Salem, Va., mom who rushed her two-year-old son Logan to the ER after he cut his head on a dining room chair. Candice made sure to take her son to a hospital covered by her insurance. And Logan's treatment — cleaning and suturing the wound — was relatively straightforward. So she was stunned when she got the news: Her out-of-network ER doctor was charging her $750.
Or consider Craig Hopper, who got hit with a $937 bill by his Austin, Texas, hospital for ER treatment for a sports injury. "It never occurred to me that the first line of defense ... could be out of the network," says his wife, Jennifer. "In-network means we just get the building? I thought the doctor came with the ER."
The Hoppers are in a particularly unfriendly state. Fully half of the Texas hospitals covered by the state's main private insurers have zero — yes, zero — in-network ER physicians, according to work from the Center for Public Policy Priorities. Emergency patients all are getting hit with huge, unexpected bills. "There's little consumers can do to prevent it and protect themselves" says Stacey Pogue, an analyst at the CPPP.
This out-of-network trickery is largely a response to Obamacare's crippling mandates on insurers. The outgoing president's signature legislative accomplishment straps coverage providers with invasive, costly regulations, squeezing bottom lines and forcing insurers to cut expenses and boost revenues anyway they can.
The obvious insurer response is to ratchet up premiums. The average premium for plans available on the Obamacare exchanges in 2017 jumped 22% over the 2016 rates.
But insurers also have resorted to subtler tactics.
That includes raising deductibles, the amount that customers have to spend out-of-pocket before benefits kick in. The average health insurance deductible for individual plans shot up 42% in Obamacare's first year — and that figure continues to climb. Today, the average deductible for the "bronze" plans in the exchanges — the cheapest possible coverage — is a whopping $6,000 for individuals and $12,000 for families.
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Insurers also are restricting their official networks — limiting the doctors and hospitals that their customers can use. This strategy enhances insurer bargaining power in negotiations with healthcare providers, but it hurts patients by denying them access to convenient care. People get stuck traveling long distances to unfamiliar caregivers for vital treatments. McKinsey calculates that about four in 10 exchange plans exclude more than 70% of hospitals in the plan's coverage area, and a further three in 10 plans exclude at least 30% of hospitals.
Insurers are feeling the squeeze under Obamacare, and they're resorting to devious tactics to cut costs. Too often, that straps patients with staggering, unforeseeable medical bills. That should all change when Obamacare is repealed and replaced — which is why lawmakers must move with all due haste in the new year.
