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Medical Plans Result in Surprise Bills for Out-of-Network Services

A woman who gave birth to a baby is charged $1,600 for an epidural she figures should be covered by her insurance. The reason? She “chose” to go to an out-of-network provider. Hence, her insurance would not cover the expenses

In 2017, California passed a bill preventing insurance companies from charging for out-of-network services. In 2022, the federal government passed similar legislation under the “No Surprises Act.” 

Today, the U.S. healthcare system produces more debt than any other industry in the world. 41% of U.S. adults have some medical debt. However, the number may be underreported as these debts are moved to credit cards, personal loans, and family members. At least half of the individuals polled reported they had some form of medical debt that had yet to pay off. 25% of those with outstanding medical debt owe more than $5,000. 

It is a Feature, Not a Bug

Today, the healthcare system is rigged to put individuals into debt. Medical debt is one of the main drivers of foreclosure and bankruptcy and places an insurmountable burden on those with chronic illnesses. Often, individuals must take extra jobs, cut expenses, and cut time with their families to continue to stay afloat. 

Worst of all, medical debt is a barrier to receiving needed medical services. Meanwhile, our healthcare system is reporting record profits as the cost of care has been shifted to patients via higher deductibles. 

Hospitals then employ a shadowy industry of debt collectors to harass patients, file lawsuits, and make threats. In most cases, the law favors the hospital over the debtor. However, the debtor does have one escape route that is only applied as a last resort. That is bankruptcy. 

Today, medical debt is the number one driver of bankruptcy in the U.S. At present, 58% of collections are related to medical bills. The next most common debt is telecommunication companies. There is nearly four times as much medical debt in our country as telecommunications debt. Americans owe an estimated $195 billion in medical debt. That is more than the entire GDP of Greece.

High-Income Americans Under Threat

While poor people do not have much to lose when they are faced with $1,000,000 in medical expenses, the same is not true for high-income earners. They tend to lose everything when a hospital files a lawsuit against them to recover the debt. Even those who have spent their lives saving before retirement end up being blindsided by bills that can reach $1,000,000. The poor, on the other hand, can simply discharge the debt in bankruptcy and go back to where they were before. So those who are under the impression that medical debt harms the poor are simply wrong. The poor are often judgment-proof when it comes to recovering debts, and its those with large savings that are targeted the most aggressively for collections.

Talk to a Pennsylvania Medical Debt and Bankruptcy Attorney

Need help dealing with medical debt? Call Chris Arrington today, and we can discuss your options. 

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