Unexpected medical bills are surprisingly common. They can take many forms: charges higher than expected; bills from unexpected doctors; and bills from out-of-network providers when patients thought they were in-network. States around the nation are taking a close look at these issues, particularly where patients received an unexpected bill from an out-of-network provider through no fault of their own.
A 2018 survey of Kentucky adults examined shows how prevalent surprise bills are in the Commonwealth. Respondents reported receiving unexpected bills regardless of insurance status. This analysis focuses on the respondents with private insurance (about 500 responses). Compared to adults with Medicare, Medicaid, Tri-care or Veterans Health, consumers with private insurance have fewer protections against high and unexpected out-of-pocket costs.
Kentuckians tried a number of strategies to address the surprise bill but were often not satisfied with the resolution. A slight majority (55%) of privately-insured Kentuckians who received a surprise bill tried to resolve the bill before paying it. As a first step, 38% contacted their insurance plan and 31% contacted the doctor, hospital or lab to resolve their unexpected medical bill (see Table 1).
Among privately-insured Kentucky adults with an unexpected medical bill in the past 12 months, most (66%) paid the bill in full or through a payment plan. A sizable minority were able to negotiate a lower bill or have their bill dismissed (28%) while 7% of privately insured respondents indicated their unexpected medical bill was sent to collections and left unpaid (see Table 2).
One-quarter of unexpected medical bills were not resolved satisfactorily; many remain unresolved. Among privately-insured Kentucky adults who had an unexpected medical bill, just under half indicated that the issue was resolved to their satisfaction. One-quarter indicated that the issue was not resolved to their satisfaction. For another 24%, the issue had not been resolved (see Table 3).
In contrast, consumers dissatisfied with how their medical bill was resolved more often reported paying their bill without disputing it (35%). They were also more likely to ask a friend or family member for help.
Perhaps not surprisingly, consumers satisfied with how their medical bill was resolved were more likely to have either negotiated a lower payment or had their bill written off or dismissed (see Table 4).
Privately-insured Kentucky adults receive unexpected medical bills at an alarming rate. The nature of these bills takes many forms from charges higher than expected, to bills from doctors they didn’t expect, to surprise out-of-network bills. Distressingly, one-quarter of these unexpected bills are not resolved to the satisfaction of the recipient. These Kentucky findings are consistent with other survey data showing unacceptably high rates of unexpected medical bills.
Prevention is worth a pound of cure. A more effective strategy would be to prevent unexpected bills from happening in the first place. States have looked at ways of simplifying benefit designs5 and many states are taking a hard look at are consumer protections to address inadvertent bills from out-of-network providers whose charges can be many times those of in-network providers.6 While less common that other types of unexpected bills, the result can be exceedingly high bills that patients cannot manage.
Kentucky residents would benefit significantly from state actions to alleviate these closely related medical billing problems.
1. A Consumer Reports survey found that nearly one third of privately insured Americans had received a surprise medical bill. https://consumersunion.org/research/surprise-bills-survey/ In addition, a Kaiser Family Foundation survey found that among insured, non-elderly adults struggling with medical bill problems, charges from out-of-network providers were a contributing factor about one-third of the time. A study by Yale University found 22% of visits to emergency rooms resulted in surprise medical bills. https://news.yale.edu/2016/11/16/yale-study-sheds-light-surprise-er-billing.
2. Across all types of medical bills—expected and unexpected—involvement of a collection agency was common. One quarter of ALL Kentucky adults have been contacted by a collection agency over a medical bill in the prior 12 months. See: Kentucky Residents Struggle to Afford High Healthcare Costs; Express Bipartisan Support for a Range of Government Solutions, Healthcare Value Hub, Data Brief No. 7 (May 2018).
4. Healthcare Value Hub, The Office of the Healthcare Advocate: Giving Consumers a Seat at the Table, Research Brief No. 25 (May 2018).
5. For examples, see Corlette, et al. Missed Opportunities: State-Based Marketplaces Fail to Meet Stated Policy Goals of Standardized Benefit Designs, Urban Institute (July 2016).
6. Lucia, Kevin, Jack Hoadley and Ashley Williams, Balance Billing by Health Care Providers: Assessing Consumer Protections Across States, Commonwealth Fund (June 13, 2017).
The survey used a web panel from SSI Research Now with a demographically balanced sample of approximately 1,000 respondents who live in Kentucky. The survey was conducted only in English and restricted to adults ages 18 and older.
Respondents who finished the survey in less than half the median time were excluded from the final sample. For purposes of this data brief, we restricted the analysis to only those with privately insurance (through respondent’s employer or purchased on their own) leaving 461 cases for analysis.