In 2009, Joclyn Krevat thought she had a simple case of the seasonal flu when she was admitted to the hospital for an illness. Instead, she was diagnosed with giant cell myocarditis, a severe inflammatory heart disease that can lead to heart failure. She spent seven months on life support before receiving a heart transplant that saved her life.
After recovering, Krevat began to receive debt collection calls and even LinkedIn requests from debt agency employees, despite the fact that she had good health insurance. Unbeknown to her, many of the doctors who treated her were out-of-network, meaning that she was on the hook for approximately $50,000 in medical bills. She was just another victim of surprise medical billing—a practice that allows the provider to bill the patient for the balance between the amount paid by insurance and the full charges.
In the years since, there has been significant progress to address the issue. Many states have enacted laws to protect against surprise billing, and at the end of 2020, Congress passed the federal No Surprises Act as part of the end-of-the-year coronavirus relief legislation. The legislation bars surprise billing for out-of-network emergency care as well as out-of-network care provided at in-network facilities. It also institutes an arbitration system for insurers and the provider to negotiate payment.
While modifying the practice of surprise billing to include more financial safeguards will help protect Americans from unexpected costs after an illness or accident, the issue hasn't disappeared and the overarching problem of medical debt will still continue in other forms. Hospitals and physician groups across the country have sued thousands of patients for unpaid medical bills unrelated to provisions covered in Congress's surprise billing legislation. Even prior to the COVID-19 pandemic, unmanageable medical debt pushed millions of Americans into financial distress, ranging from damaged credit to bankruptcy. The pandemic has only exacerbated these preexisting failures.
Think about it this way: The U.S. is the only economically developed country where a slip and fall could spell financial ruin.
Polling from Data for Progress and The Lab, the policy hub of The Appeal, shows that a majority of Americans have either delayed or fully passed on necessary healthcare—with 19% reporting that they have done both—because they were afraid of the cost. Nearly two-thirds of Americans (64%) worry about being unable to afford medical bills due to the expense.
Beyond ending surprise billing, state and federal governments can take a number of steps to alleviate the abomination that is medical debt. First, consumer protections against medical debt should apply to a wider range of providers, including all types of hospitals, physician groups, emergency rooms, and clinics.
Second, assistance thresholds should be standardized by patients' household income and medical expenses to limit providers' discretion on eligibility. These protections would extend not just to uninsured patients, but also to underinsured patients with high out-of-pocket expenses. Under a federal policy, providers could receive further payments to their Medicare disbursements if they offer more generous assistance to patients than prescribed by the standard policy.
In addition, providers should be required to offer eligible patients an option for an extended payment plan with no or limited interest, and should prohibit certain collection practices, like forcing the sale of a primary residence or seeking wage garnishment. Polling indicates that more than two-thirds of those surveyed support prohibiting healthcare providers from suing their patients, garnishing patients' wages, or seizing patients' homes to recover medical debt.
Finally, states could and should create an enforcement action by state officials for violations of medical debt protections. Violations of any of these provisions should constitute an unfair trade practice under the state's Unfair and Deceptive Acts or Practices statute, which nearly all states have enacted.
We are still deep in a crisis in which nearly a quarter of working-age Americans carry medical debt and often have come to fear medical bills more than the illness itself. While eliminating surprise billing will help alleviate some of the issues surrounding medical debt, we must also recognize that the U.S. faces a medical debt catastrophe.
