The No Surprises Act is lowering patient out-of-pocket costs — but premiums and financial strain remain unchanged, according to a new study from Harvard University and Mass General Brigham, which finds the No Surprises Act is cutting out-of-pocket spending for privately insured adults, but premiums and overall financial strain tied to medical bills haven’t budged.
By the numbers:
- Out-of-pocket spending fell by $567 annually for adults in states that gained NSA protections.
- That’s a bigger impact than other federal cost-reduction efforts, including Medicaid expansion (–$152) and drug savings under the Inflation Reduction Act (–$400).
- Nearly 10 million surprise bills were prevented in the first nine months of 2023.
- Premium spending showed no significant change despite earlier projections.
- High-burden medical spending — defined as spending more than 10% of family income on medical costs — also remained unchanged.
Why it matters: Surprise bills have long been a major driver of financial stress for patients, especially following emergency visits or in-network hospital stays involving out-of-network providers. The NSA, effective since 2022, was designed to protect patients from these scenarios and cap cost-sharing at in-network rates.
Between the lines:
- Providers won 85% of independent dispute resolution (IDR) cases in late 2023, with awards often 3x higher than the qualifying payment amount insurers argued for.
- More than two-thirds of IDR cases came from providers backed by private equity firms, who tend to secure higher payouts.
- That dynamic may explain why premiums have not fallen, and why healthcare costs overall have not declined as originally forecast.
Yes, but: Lower out-of-pocket bills haven’t translated into broad relief. Nearly 18% of Americans carried medical debt in 2020, averaging $429, and the NSA has not reduced high-burden spending at the population level.
What’s next:
- Researchers suggest extending the NSA to ground ambulance rides, which generated surprise bills in more than 70% of cases before the law went into effect.
- Policymakers may need to tighten arbitration rules, giving more weight to qualifying payment amounts.
- Increased public awareness is critical: many disadvantaged patients remain unaware of their rights and protections, limiting the law’s reach.
