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What to Do When Your ‘Good’ Health Insurance Fails You

Yes, people with insurance are still susceptible to surprise medical bills, leaving formerly stable families in staggering debt. Fortunately, there are a few things you can do about it

Enormous medical bills are the American Bogeyman, and nobody’s safe. Outrageous charges for basic medical treatments are so common, in fact, that NPR runs a regular “Bill of the Month” series, chronicling statements that would send anyone back to the doctor for additional care. Even the insured can end up paying hundreds of thousands for medical treatments that save their lives.

It happened to my girlfriend, who went to the hospital for chest pains a few months ago and left with a $8,500 bill. Her insurance only covered $3,000.

The source of our preposterous medical bills can be traced to all corners of the complicated web of American health care. As my colleague Andrew Fiouzi explained in a recent article about major wage gaps in the health-care industry, the American Medical Association relentlessly lobbies so doctors can remain the highest paid major profession in the U.S. In turn, insurance companies end up having to pay for those massive salaries, but also have to rely on often large contributions from those they insure to stay profitable. Of course, the high education costs of becoming a doctor — which takes at least 10 years and can run you up to $270,000 — are another piece of the puzzle.

The pharmaceutical industry is also a huge contributor to the medical bills draining Americans of their savings. Thanks in large part to a lack of even fundamental price controls, drug costs in the U.S. tower over those in other advanced countries. In 2019, the House Committee on Ways and Means released a report that found that “individual drug prices in the U.S. ranged from 708 to 4,833 percent higher than the combined mean price in the other 11 countries” they focused on. Because insurance companies have small profit margins, again, these high drug prices trickle down to the insured.

Last month, President Trump did sign four executive orders in an attempt to lower drug prices, but health policy experts are skeptical about them providing any meaningful difference for patients.

Congress also spent the start of 2020 arguing over how to deal with surprise medical bills, which are truly massive charges that result from seeing out-of-network doctors, often in emergency situations. Steven Brill, author of America’s Bitter Pill: Money, Politics, Backroom Deals and the Fight to Fix Our Broken Healthcare System, explains to me how these surprise bills can happen: “I got hundreds of letters, where someone would say, ‘My wife was about to have a baby. We checked out all our insurance. We made a date to go to a hospital where we had insurance. Our OB/GYN was in-network. Everything was perfect. We get to the hospital, and she’s having terrible pain. They have to give her an epidural, and an anesthesiologist gives her the epidural. When we leave the hospital, we get a bill for $8,000 for the epidural.’ Because the anesthesiologist, guess what — while he was in the hospital that was in-network, he wasn’t in-network.”

The real problem with out-of-network bills is that patients who have an accident and are rushed to the hospital, perhaps in an ambulance, have almost no way of avoiding them. “They’re letting doctors wander around with a hunting license,” Brill says. “Why would a woman who’s in terrible pain and having a dramatic moment in her life and her husband’s life stop to ask the guy who’s going to take her out of her pain, ‘By the way, are you in-network?’” 

This kind of predatory behavior is partly due to an increase in private equity firms buying up health-care providers and using business practices that place investors, instead of patients, above all else. For example, Brill says these firms often hire debt collection agencies to chase down patients and even garnish their wages.

The trouble is, even as Congress looks to fix surprise medical bills, doctors argue that they’re the very thing that keeps their salaries up. Meanwhile, insurance companies want to stay profitable. In order to have both, patients are the ones who suffer most.

All of this is to say, unless the government finds a reasonable way to step in, Americans will continue to face insane medical bills. Individually, we have very little power over this, but there are a few things you can try if you end up with a big bill.

Negotiate, Negotiate, Negotiate

The first thing you should do is ask for an itemized bill and negotiate your payment with your medical provider. “Hospitals will often write off a large portion of an outstanding bill if someone agrees to a payment plan for the remainder,” says David Hyman, health-care financing researcher and co-author of Overcharged: Why Americans Pay Too Much For Health Care. “No one should pay list price or close to it — that’s for suckers.” His co-author, Charles Silver, adds, “If the seller is a hospital, a patient may be better off paying in all cash than using insurance. Whether this is true depends on the service.”

If you feel uncomfortable arguing your case, Brill also says you can hire a specialist to help negotiate your bill. Likewise, Hyman says, “Enlist the state insurance commissioner at the Office of Consumer Affairs. Enlist the benefits office at your place of employment if you have employment-based coverage. Both can help push back and have more market power than an individual consumer.” 

You can also check if the hospital offers any kind of charity care that you’re eligible for.

If the Problem Is Drugs, Contact the Drug Company

“Many name-brand drug makers offer discounts or coupons that reduce that amount to $0,” Silver explains. “The drug makers get most of their money from insurer contributions. When they offset patient contributions, and patients buy their drugs, the makers then receive the insurer contributions and get the bulk of the money. Because the markup on name-brand drugs are enormous, the makers profit — and seem to be charitable, too.”

This is a pretty devious tactic by drug makers. “Drug companies are washing their contributions through patient-assistance funds — a strategy that has resulted in lawsuits by the Department of Justice against the charities and some of the drug companies — with big settlements,” Hyman explains. But it can still help you get your medication without cannonballing into debt.

Complain to the Media

“The media seems to like to run these stories a lot,” Hyman says (which, true). “Naming and shaming seems to get some providers to back down.”

To that end, I’d be more than happy to help.