High costs for out-of-network care by physicians and hospitals drive health insurance premiums in New Jersey up by nearly $200 a person each year, according to a report [click here] released by a group of consumer advocates Thursday.
Employers and people who buy their own coverage pay nearly $1 billion a year more in premiums because of bills to insurance companies from hospitals and physicians that deliberately choose to stay out of insurance networks, according to the report by New Jersey Policy Perspective, a progressive think-tank in Trenton. While most hospitals participate in all insurance networks, a small number stay out-of-network in order to bill insurers higher rates.
State insurance regulations shield only 1.4 million state residents from paying the bills themselves in emergency situations, the report said. But insurers still must pay them, and end up passing the costs through to consumers in premiums.
The report added that an estimated 168,000 state residents each year — whose insurance plans are regulated by the federal, rather than state, government — receive unexpected bills from providers who aren't in their insurer's network, even when the patient has chosen an in-network hospital for care. Those bills average $2,500 each, the report estimated.
The report was released on a "day of action" by NJ For Health Care, a coalition organized by New Jersey Citizen Action, a statewide community action and advocacy group. The coalition urged legislators to pass a law that would protect consumers and contain costs, while making health-care pricing more transparent. Last year, a measure introduced by four Democratic lawmakers after months of discussion with various interest groups failed to make it out of committee.
That measure — the "Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act" — was reintroduced in the current legislative session, but lawmakers have taken no action on it. It is scheduled for an Assembly committee hearing on Monday.
The problem of out-of-network bills is bigger than most people think, said Ray Castro, the report's author and an analyst with New Jersey Policy Perspective. The state's "antiquated health laws are making medical care increasingly unaffordable," he said. Employer-based premiums in New Jersey in 2014 were the second-highest in the United States, after Alaska), according to the Kaiser Family Foundation, a non-profit, non-partisan health policy organization.
In the past two years, lawmakers in New York, Florida and Connecticut have passed laws that protect consumers from surprise medical bills.
The New Jersey coalition was joined the at the Statehouse Thursday by two national groups — Consumers Union, the policy arm of Consumer Reports, and the National Patient Advocate Foundation — to draw attention to the issue for legislators.
Copyright 2016 North Jersey Media Group Inc.