Even insured consumers get hit with surprisingly large bills

Willie Grace | 2/19/2015, 7:53 p.m. | Updated on 2/19/2015, 7:53 p.m.
Sometimes, that's because they got incorrect or incomplete information from their insurer or health-care provider. Sometimes, it's because a physician ...
Affordable Care Act health insurance plans

NEW YORK (CNNMoney) -- After Pam Durocher was diagnosed with breast cancer, she searched her health insurer's website for a participating surgeon to do the reconstructive surgery.

Having done her homework, she was stunned to get a $10,000 bill from the surgeon.

"I panicked when I got that bill," said the 60-year-old retired civil servant who lives near Roseville, Calif.

Like Durocher, many consumers who take pains to research which doctors and hospitals participate in their health insurance plans can still end up with huge bills.

Sometimes, that's because they got incorrect or incomplete information from their insurer or health-care provider. Sometimes, it's because a physician has multiple offices, and not all are in network, as in Durocher's case. Sometimes, it's because a participating hospital relies on out-of-network doctors, including emergency room physicians, anesthesiologists and radiologists.

Consumer advocates say the sheer scope of such problems undermine promises made by proponents of the Affordable Care Act that the law would protect against medical bankruptcy.

"It's not fair and probably not legal that consumers be left holding the bag when an out-of-network doctor treats them," said Timothy Jost, a law professor at Washington and Lee University.

Adding insult to injury, insurers are not required to count out-of-network charges toward Obamacare's annual limit on out-of-pocket expenses.

Efforts by doctors, hospitals and other health providers to charge patients for bills not covered by their insurers are called "balance billing." The problem pre-dates the Obamacare and has long been among the top complaints filed with state insurance regulators.

Because the issue is complex and pits powerful rivals against one another— among them, hospitals, doctors and insurers— relatively few states have addressed it. What laws do exist are generally limited to specific situations, such as emergency room care, or certain types of insurance plans, such as HMOs.

Obamacare largely sidesteps the issue as well. It says insurers must include coverage for emergency care and not charge policyholders higher copayments for ER services at non-network hospitals. While the insurer will pay a portion of the bill, in such cases, doctors or hospitals may still bill patients for the difference.

That means that in spite of having insurance, a consumer involved in a car wreck and taken to a non-network hospital might receive additional bills, not just from the hospital, but from the radiologist who read his X-rays, the surgeon who repaired his broken leg and the laboratory that processed his blood tests.

Networks Get Narrower

Advocates believe a growing number of consumers are vulnerable to balance billing as insurance networks grow smaller in the bid to hold down costs.

For example, there were no in-network emergency room physicians or anesthesiologists in some of the hospitals participating in plans offered by three large insurers in Texas in 2013 and 2014, according to a survey of state data by the Center for Public Policy Priorities, a Texas advocacy group.

Smaller networks are also becoming more common in employer-based insurance: About 23% of job-based plans had so-called "narrow networks" in 2012, up from 15% in 2007, according to a May report from the Urban Institute and Georgetown University Center on Health Insurance Reforms.