Kaiser Health News, September 10, 2018
Michelle Andrews and Julie Appleby

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When Drew Calver had a heart attack last year, his health plan paid nearly $56,000 for the 44-year-old’s four-day emergency hospital stay at St. David’s Medical Center in Austin, Texas, a hospital that was not in his insurance network. But the hospital charged Calver another $109,000. That sum — a so-called balance bill — was the difference between what the hospital and his insurer thought his care was worth.

Though in-network hospitals must accept pre-contracted rates from health plans, out-of-network hospitals can try to bill as they like.

Calver’s bill eventually was reduced to $332 after Kaiser Health News and NPR published a story about it last month. Yet his experience shines a light on an unintended consequence of a wide-ranging federal law, which potentially blindsides millions of consumers.

The federal law — called ERISA, for the Employee Retirement Income Security Act of 1974 — regulates company and union health plans that are “self-funded,” like Calver’s. That means they pay claims out of their own funds, even though they may be administered by a major insurer such as Cigna or Aetna. And while states increasingly pass laws to protect patients from balance bills as more hospitals and doctors go after patients to collect, ERISA law does not prohibit balance billing. [...]

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