In an effort to help control healthcare costs, the New Jersey Business & Industry Association urged an Assembly committee on Thursday to protect patients, employers and taxpayers from the impact that “surprise” out-of-network medical bills have on the state’s healthcare system.
“Out-of-network bills have saddled patients with higher out-of-pocket costs, triggered higher insurance premiums for consumers and employers, and added an estimated $2 billion to the cost of the state healthcare system in 2015,” said NJBIA President & CEO Michele Siekerka. “Ultimately, these costs affect every New Jersey taxpayer because of the impact on the state budget.”
“Solving the problem of out-of-network bills, both for consumers and their employers who pay most of their employees’ healthcare premiums, remains one of NJBIA’s highest priorities,” Siekerka said. “Healthcare costs are consistently ranked in our member surveys as the biggest problem they face,” Siekerka added.
Mary Beaumont, NJBIA’s vice president for Health and Legal Affairs, told the Assembly Appropriations Committee in support of A-1952 that NJBIA has joined together with a broad coalition of stakeholders, including consumer groups, public employee unions, trade unions and other employer associations, to work toward balanced out-of-network reforms.
“We recognize that some in the healthcare community continue to have concerns with the legislation and that there are many different sides of the issue,” Beaumont said. “In trying to balance the interests of all our members, NJBIA supports out-of-network reform because of the direct impact it will have on healthcare costs.”
Beaumont said out-of-network medical bills occur for a variety of reasons. Sometimes a facility is in-network with the patient’s health insurance plan, but the emergency room doctor or surgeon who works there is not. Patients can also receive out-of-network bills from providers they had no role in selecting, such as radiologists, pathologists and laboratories that were involved in their care.
“The law now allows out-of-network providers to balance bill for the difference between what a patient’s insurance company pays and the total medical bill, and that difference can be a substantial amount of money,” Beaumont said. “Out-of-network bills from one illness or accident can collectively add up to thousands or tens of thousands of dollars, leaving patients buried in debt even though they technically have health insurance,” Beaumont said.
Siekerka said out-of-network bills have a substantial impact on the cost of doing business in New Jersey because they cause higher premiums. NJBIA’s 2016 Healthcare Survey of its 20,000 member companies found healthcare premium increases have the greatest impact on small businesses. Companies with fewer than 25 employees saw 12.5 percent rate increases, compared to a 10.5 percent average increase for member companies of all sizes.
Not surprisingly, only 76 percent of small businesses (fewer than 25 employees) currently provide health insurance for their employees, compared to 85 percent of NJBIA members overall, she said. The survey also found businesses are coping with the financial realities of this by passing more costs associated with healthcare along to their employees.