KIYC: New law may not protect against surprise medical bills

Posted: Updated:

If you think a new state law will protect you from surprise out-of-network medical bills, a Kane In Your Corner investigation finds you may be in for another surprise. 

The new law, signed by Gov. Phil Murphy last week, provides no protection to the vast majority of New Jersey residents.

Lisa and Eric Waterman, of Howell, have had to deal with two large surprise out-of-network bills. The first came when their son, Dylan, was born in 2014. They went to an in-network hospital and were seen by an in-network doctor. But when Lisa ran into complications during labor, an out-of-network specialist was called in, who billed them for the portion insurance didn’t cover. It came to over $1,000.

“Everyone kind of pointed the finger at the other one, and you’re stuck in the middle,” she says. “You pay because you don’t want to end up in collections.”

The Watermans were featured in a 2015 Kane In Your Corner investigation. At the time, Assemblyman Craig Couhglin and Sen. Joseph Vitale (D – Woodbridge) were working on legislation to ban surprise out-of-network bills. But later that year, the Watermans wound up with another one, after their older son, Braeden, was bitten by a dog. Once again, they used an in-network hospital, but the emergency room staff called in an out-of-network plastic surgeon to handle the sutures. Even after negotiating a discount of nearly 50 percent, they wound up paying about $4,000.

This year, the legislation finally passed, and Gov. Murphy signed it into law on June 1, triumphantly declaring, “Today, at long last, New Jersey’s consumers win!”

But most won’t. 

Even the sponsors’ most optimistic estimates are that the law will regulate, at most, 30 percent of New Jersey health insurance policies. That’s because most people get their health insurance from their employers, and the federal law known as ERISA trumps state insurance law. The only state-regulated employer health plans are the state’s own employee plan and plans offered to church employees. On the individual market, some plans are state-regulated, but self-insured plans aren’t. The sponsors hope federally regulated plans voluntarily abide by the state’s regulation, but there’s no guarantee any will.

One of the many families that won’t be covered by the new law are the Watermans. But if you expect them to be angry, it turns out that’s yet another surprise.  

“I think it's a great start,” Lisa Waterman says. “And hopefully it will be expanded to families like mine, so we can take care of our kids and not worry about what we have to pay in the end.”

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