Has legislation to stop surprise medical bills worked?
We’ve been taking a close look on “Marketplace Morning Report” at debt to pay back medical bills. It’s the leading cause of personal bankruptcies in America, with at least 100 million people on the hook for at least some debt.
Host David Brancaccio moderated a panel and audience discussion on medical debt in St. Paul, Minnesota, just a couple weeks ago. “Health and Wealth: Why Americans are Drowning in Medical Debt” featured discussion of charitable programs that help people bridge the gap when paying for medical care, high prescription drug costs and more.
Today we’re doing a deep dive on a few of medical debt’s root causes — and legislative efforts to address them. Back in 2020, Congress passed the “No Surprises Act” to protect patients from big bills coming out of left field for out-of-network medical care.
Tradeoffs, the health policy news organization, just released an episode on this legislation, reported and produced by Alex Olgin. For an update on whether or not the law has accomplished what it set out to do, Brancaccio spoke with Tradeoffs executive editor, Dan Gorenstein, who’s also a former Marketplace reporter. The following is an edited transcript of their conversation.
David Brancaccio: You’ve been looking at this. What do we know about how well this thing is working to stop the possibility that when you open the bill from the hospital, you get a horrendous surprise?
Dan Gorenstein: Sure. Well, here’s some nice news: The health insurance trade group AHIP says more than 10 million surprise bills were avoided just last year. As recently as 2020, David, one in five emergency room visits would end in a surprise bill after people would go to the hospital and see a doctor who was not in their insurance plan, someone out of network. In those cases, insurers paid what they wanted and doctors billed patients for the rest. Now, patients are mostly protected — except from surprise ambulance bills. And doctors and insurers hash out their disagreements using a process known as arbitration.
Brancaccio: Arbitration, like in sports or a workplace dispute. That’s how it’s supposed to work here?
Gorenstein: Yes, that’s right. Congress has borrowed from the Major League Baseball system for salary disputes. And basically you have doctors and insurers each make an offer, a mediator picks one of two offers, and — because there’s no splitting of the baby — each side, in theory, has an incentive to come in with a reasonable bid.
Brancaccio: Reasonable, right. So is that what is happening? People come into this arbitration all reasonable?
Gorenstein: It doesn’t seem like it’s going that well. We just got our first glance at the numbers, and doctors are consistently winning with higher prices than expected. Lawmakers had banked on arbitration driving down prices for the entire private health insurance market, so much so that monthly health insurance premiums would drop by 1% starting next year. A new analysis from the Brookings Institution found the awards for doctors are so high that the law may end up actually increasing insurance premiums.
Brancaccio: Increasing — not what Congress intended. Where does this go now?
Gorenstein: This federal arbitration system is based on what states have done, and some sources of ours point to Washington state as a bit of a success story. The federal system is drowning in cases; Washington [state] has just a handful, in part because doctors found the risks of arbitration outweighed the benefits. So it seems like Congress has two basic options: tweak the system — maybe work more like Washington’s — or let this new system shake out. Ultimately, this law is protecting more people from the kinds of medical debt that you’re covering on the show, but that protection may come at a price: higher insurance premiums for millions.