Why Network-based Healthcare Costs Are a Major Consumer Vulnerability

A Texas schoolteacher was in his own city, in his own home, when he had a heart attack in 2017. Yet when he returned home after a successful surgery, his health insurance company said that he owed them $108,951 — all because the neighbor who rescued him happened to take him to a nearby hospital that was out-of-network.1

The in-network/out-of-network challenge plagues thousands of Americans who seek care every year. It’s one way our healthcare system can lead to confusion and alarmingly high bills, and consumers are often at a loss to predict their out-of-network costs even if they’re diligent researchers.

The teacher above experienced what is called “balance billing” — being held accountable when insurance pays for a limited amount of an out-of-network event, and the provider, free of prearranged contracts, charges whatever they feel is warranted.

There are those who perceive this problem and have taken steps to address it, but it’s been slow going.

A challenging history

This costly phenomenon is the result, in part, of a web of legislation we’ve inherited from the 1970s. ERISA, or the Employee Retirement Income Security Act of 1974, “sets minimum standards for most voluntarily established pension and health plans in private industry.”2 It has been amended periodically (COBRA was an amendment to ERISA, for example), but legislators are still trying to address unforeseen vulnerabilities, such as cases where self-funded plans, like the teacher’s, are left out of consumer protections.

Just fewer than half of U.S. states provide extra protection against unforeseen balance bills.

Unfortunately, our current political reality means that new legislative solutions are likely not forthcoming. That’s one reason why newer practices, like direct contracting between plan sponsors and care providers, are gaining traction. Though their specific applications vary, their general appeal is that they provide control and foresight in a healthcare environment that severely lacks both of those things.

How BridgeHealth can help

BridgeHealth is dedicated to bringing creative new solutions to market. Learn more about what we do to give plan sponsors and healthcare consumers control, peace of mind, and the best care available anywhere—no surprises, no balance billing.

  1. https://www.npr.org/sections/health-shots/2018/09/10/645561263/the-remedy-for-surprise-medical-bills-may-lie-in-stitching-up-federal-law
  2. https://www.dol.gov/general/topic/health-plans/erisa
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