Ending “Surprise” Medical Bills: The “No Surprises Act” of 2021
Many of us have experienced frustrating episodes involving the healthcare system, our health insurance, or both. Especially for those who need a procedure involving a specialist, it has been somewhat common to receive a bill—often well after the fact—listing items that the consumer may have assumed were covered under their insurance but are not, for various reasons. For example, there might be an out-of-network anesthesiologist who bills thousands of additional dollars after you carefully scheduled a procedure at an in-network facility, with an in-network surgeon. Or you may have taken an expensive ambulance ride that turned out to be out-of-network. (And if you needed a ride in an ambulance, chances are you weren’t in an ideal position to schedule it or to carefully evaluate whether it was in-network.)
For many Americans, employer plans provide valuable protection from unmanageable medical expenses. However, a recent survey found that even for people in large employer plans, 18% of all emergency visits and 16% of in-network hospital stays had at least one out-of-network charge associated with the care.
Another source of frustration stems from “balance billing,” where a physician might bill a patient directly for services rendered. A more comprehensive survey found that 39% of insured non-elderly adults received an unexpected medical bill in the previous 12 months.
In 2021, Congress passed the No Surprises Act as part of the Consolidated Appropriations Act of 2021. The act went into effect January 1, 2022, and it includes provisions designed to protect consumers from surprise charges for out-of-network providers and balance billing. The new provisions stipulate that that if you choose to receive services from an out-of-network provider or if an out-of-network provider happens to show up on your service team, you cannot be billed more than an in-network cost. The new law also requires health care providers and facilities to give you an easy-to-understand notice explaining whenever you are getting care out of network, and listing your options to avoid balance bills. You are not required to sign that notice or get care out of network in order to be protected.
In addition to these protections, consumers can also require their insurance providers to disclose in advance—when possible—what will be covered (or not) under the policy, and to ask their doctor how a medical procedure will be coded for billing purposes. So, for example, if you elect to have non-emergency surgery, you should make sure everyone with whom you interact and who participates in the procedure will be in-network. You can also comparison-shop prices for different procedures using the Healthcare Bluebook. The key here, obviously, is to be as well-informed as possible, as much in advance as possible.
For clients who qualify, such as those with a high-deductible medical insurance plan (HDP), a healthcare savings account (HSA) can offer a smart, tax-efficient way to plan ahead for unexpected medical expenses. In 2022, an individual can contribute up to $3,650 ($7,300 for families) and get a tax deduction for the contribution. Funds in the account can be withdrawn tax-free to pay for qualified medical expenses, and balances left at the end of the year can be rolled over to cover expenses for future years.
At Bernhardt Wealth Management, we understand how important it is to be well-informed about all aspects of your financial life, including careful planning around medical expenses. For interesting insights into health and longevity, click here to read our Flash Report, “The Road to Longevity: Living to 120—and Beyond?”