Nearly half of Americans with health insurance said they received a recent medical bill or a charge that “should have been free or covered by their insurance,” according to a survey released Thursday.
The survey, from the Commonwealth Fund in New York City, found 45% of working-age consumers last year were erroneously billed, however, fewer than half of those patients challenged their health insurance company or a medical provider about the unexpected charges.
More than 1 in 3 consumers who contested surprise medical bills said the extra work paid off and the costs were reduced or eliminated.
Officials at the Commonwealth Fund said the survey underscores a fundamental problem in the health care system. People expect their health insurance plan to provide access to timely medical care and protection from financial harm, but, instead, they frequently face unexpected medical bills or are denied care.
Sara Collins, Commonwealth’s vice president for health care coverage and access, said the survey documents the reality many Americans are experiencing. Consumers often don’t know what their insurance plans will cover or which services provided by their doctors or other providers will show up on their bills. The lack of transparency from officials overseeing insurance coverage and medical bills confuses patients and saps their confidence that they’ll get the care they need.
The bottom line for consumers: Health insurance often does not guarantee affordable, timely care for consumers “without fear of incurring a lot of medical debt,” Collins said.
Consumers don’t know they can fight medical billing errors
The survey aimed to address a basic question: Why do so many Americans struggle to get their health insurance to work for them?
To answer that question, the survey polled more than 5,600 insured working-age adults under 65, between April 18 and July 31, 2023. The survey tracked figures based on consumers’ insurance plan. It looked at employer-sponsored insurance and Affordable Care Act plans or Medicaid, the government insurance program for low-income families and individuals. Some survey respondents also had Medicare, the federal health insurance program for adults 65 and older. Disabled individuals are eligible for Medicare at a younger age.
Consumers said they were confused by their health plan’s complex rules and coverage exclusions. While Affordable Care Act plans require preventive care coverage for annual checkups or colon cancer screening free of charge other types of insurance do not mandate these services to be offered for free. Individual states can also impose specific requirements about what services must be covered.
More than half of the people who said they didn’t challenge medical billing errors said they were unaware they had the right to do so. The survey said consumers under 50, people with low-to-moderate incomes and Hispanic residents were the least likely to challenge a medical bill.
Another 17% of consumers said their insurance plans denied coverage for a doctor-recommended medical service or procedure. When an insurance plan refused to cover care, 47% of consumers said their health condition worsened.
Rising health care prices drive consumer angst
The underlying reason so many consumers get unexpected medical bills is the expensive prices set by hospitals, doctors and drug companies, said Ge Bai, a Johns Hopkins University professor of accounting and health policy and management.
“A fundamental reason is our health care prices are so expensive, and many employers will go to high-deductible plans,” Bai said.
High-deductible health insurance plans typically require consumers to pay a set amount out of pocket before most coverage kicks in. The Internal Revenue Service defines a high-deductible health plan as one that charges an annual deductible of at least $1,600 for an individual or $3,200 for family coverage.
Most employers who provide health insurance for working-age adults have turned to high-deductible plans. This allows companies to deduct less from workers’ paychecks for premiums. The tradeoff is people need to shoulder more of the cost at the hospital, doctor’s office or pharmacy before their coverage kicks in.
Bai recommends consumers evaluate what type of health care they need before selecting a health insurance plan. If they pick a plan with a high deductible, they can budget for expenses when they visit a doctor or pharmacy.
Healthy people can expect to cover most of their health care costs because more often than not they don’t meet their plan’s deductible, Bai said. But they still need catastrophic coverage in the event they need emergency care or are diagnosed with a costly medical condition, such as cancer.
Consumers with chronic medical conditions such as cancer might choose a health insurance plan with more robust coverage.
A recent American Cancer Society study found nearly 3 in 5 working-age adults with cancer faced at least one financial challenge. They took unpaid leave or lost jobs or health insurance, the study found. In the aftermath of these losses, they suffered financial problems that made it difficult to cover costly cancer care. Some were forced to delay treatment and many reported the situation caused them stress.
The issue of Americans grappling with rising health care costs and medical debt has captured the attention of Congress.
In July, The Senate Health, Education, Labor & Pensions Committee held a hearing last month about potential fixes to the nation’s growing medical debt problem. More than four in 10 adults reported having some medical debt. More than 1 in 10 Americans owed $10,000 or more in unpaid medical bills, according to Senate HELP committee documents.
“Medical debt is a symptom of a larger problem – the high cost of health care,” Sen. Bill Cassidy, R-Louisiana said during the Senate HELP committee meeting.