NJ residents are pummeled by hidden health care costs. Fix it, Trenton

Gov. Phil Murphy recently signed a new transparency law that prevents Garden State businesses from profiting from credit card surcharges added to bills. We all hate paying the extra few percent that some restaurants and retailers tack onto bills when we pay with Visa, Mastercard or American Express, and this law will help us avoid them. Consumers deserve to know what they're being charged, especially in these inflationary times.

However, legislators are missing a greater opportunity to protect consumers from unknown hidden costs. They should expand their focus from annoying credit card surcharges to potentially financially devastating health care overcharges.

Unknown, inflated health care bills can result in years of medical debt, bankruptcy and hospital lawsuits that garnish wages and seize assets. New Jersey hospitals even sued patients for unpaid bills during the coronavirus pandemic. In one typical story, Gina Gonzalez of Woodbridge was forced to sell her car to pay for a $13,500 settlement stemming from a lawsuit filed by Trinitas hospital.

I saw the financial devastation caused by hidden health care fees firsthand as the former head of New Jersey's state health plan. Sometimes these upcharges took the form of exorbitant "facility fees" tacked onto care — even telemedicine. But more often than not, they were just run-of-the-mill price gouging.

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For instance, Mark Gottlieb of Little Ferry received a $250,000 hospital bill, $89,000 of which he owed out of pocket, for surgery after a car accident. Richard Kodack of Morris County received a $9,000 hospital bill, $7,323 of which he owed out of pocket, for a 20-minute ambulance ride. Given such well-documented health care overbilling, price transparency is urgently needed to protect patients.

Due to the opaque status quo, 11% of New Jersey residents — and 17% of New Jersey residents of color — have medical debt in collections. Early in my career, I was a New Jersey bankruptcy law clerk and saw countless heart-wrenching stories of individuals and families trapped in spirals of medical debt, often through circumstances beyond their control. Many were bankrupted by routine treatments at outrageous and hidden prices. I remember watching their faces as they left the courtroom without hope.

In today's predatory health care system, patients are asked to sign a limitless guarantee to pay all ensuing charges as a condition of care. No wonder prices are so high. In what realm is it acceptable to potentially saddle someone with debt that could cost them everything, all while they're in their most vulnerable state?

State legislators can address this anti-consumer health care dynamic by codifying and strengthening federal hospital and health insurance price transparency rules at the state level. These rules require hospitals and insurers to post online their actual prices, including their secret negotiated rates, so consumers can shop for affordable care and have peace of mind that it won't result in financial ruin.

The federal rules have been plagued by noncompliance and a lack of standards. Many hospitals skirt the rules by using cost estimators, which allow hidden fees and overcharges to make their way to final bills. But robust state legislation can usher in meaningful price transparency for residents.

Just as the state Division of Consumer Affairs will inspect New Jersey businesses for compliance with this credit card surcharge law, a state agency can provide enforcement to ensure that health care companies offer upfront pricing that matches patients' final bills.

"All residents and visitors doing business in New Jersey deserve the utmost transparency with respect to their transactions," Murphy said when signing the credit card legislation. The governor and state legislators should follow the courage of their convictions and expand this principle to health care, where it can have a much more significant impact in protecting ordinary consumers.

Christin Deacon is a former director of health benefits operations and policy and planning for New Jersey.

This article originally appeared on NorthJersey.com: NJ health care costs: Hidden fees pummel consumers