“Medical debt is the number one driver of personal bankruptcy in America. And a law designed to protect you from surprise bills is being actively undermined by the companies it was supposed to control.”
What You Need to Know
The American Medical Association just sent a letter — signed by 112 physician organizations — warning federal regulators that health insurance companies are systematically undermining the No Surprises Act. The law that was supposed to end surprise medical bills is being gamed from the inside.
Here’s what insurers are doing right now:
- Increasing your costs after losing a dispute. When an independent arbitrator rules against the insurer, some plans respond by raising the patient’s cost-sharing amount anyway.
- Reopening settled cases to avoid paying. Insurers are exploiting a June 2025 technical guidance loophole to reopen final arbitration decisions — then withholding payment from your doctor.
- Ignoring the 30-day payment rule. The law says insurers must pay within 30 days of an arbitration decision. Many are paying late, paying partial amounts, or simply not paying at all.
The result: your doctor eats the cost, limits the services they offer, or passes the bill to you. Either way, you lose.
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Why You Need to Know It
Medical debt is not a side issue in the debt conversation. It’s the central issue. More people file bankruptcy over medical bills than any other single cause. And this is happening while hospitals are adding hidden facility fees and spending billions on expansions.
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The math nobody shows you: The No Surprises Act was supposed to protect you from bills when you go to an in-network hospital but get treated by an out-of-network doctor you didn’t choose. It does — on paper. But when insurers refuse to pay the arbitrated amount, the financial pressure lands on the provider, who then has fewer resources and less reason to stay independent. The long-term effect: fewer independent doctors, more consolidation, higher prices for everyone.
Michigan just passed bipartisan legislation to limit medical debt practices — hospitals can’t charge more than 3% interest or impose late fees within 90 days. But most states haven’t caught up, and the CFPB is being gutted at the federal level precisely when enforcement matters most.
Things to Consider
If you have a medical bill you think violates the No Surprises Act, you have real options — but you need to act, not wait.
The No Surprises Act applies when you receive emergency care, when you’re treated at an in-network facility by an out-of-network provider you didn’t choose, or when you receive air ambulance services from an out-of-network provider. If any of those apply to your situation, the bill should be limited to your in-network cost-sharing amount. If it was a flight, my air ambulance bill guide walks through comparing the bill to your Explanation of Benefits and filing with the No Surprises Help Desk.
The challenge right now is that the enforcement mechanism — the independent dispute resolution (IDR) process — has generated over $5 billion in costs since 2022, and both insurers and providers are manipulating it. That doesn’t mean your individual rights are gone. It means you may need to push harder to claim them.
What to Think About Doing
- If you got a surprise medical bill: File a complaint with the No Surprises Help Desk at CMS.gov/nosurprises or call 800-985-3059. They investigate compliance and can refer your case to the right enforcement authority.
- If your insurer increased your cost-share after an arbitration ruling: File a complaint with your state insurance commissioner AND the federal Help Desk. This practice may violate the law directly — document everything.
- If you’re facing medical bills you can’t pay: Ask the hospital’s financial assistance program first. Under the ACA, nonprofit hospitals are required to have one. Many will discount or eliminate bills for people earning under 200-400% of the federal poverty level.
- If medical debt is destroying your credit: As of 2023, medical debt under $500 and paid medical debt no longer appear on credit reports. If you’re seeing old medical debt on your report, dispute it.
- If medical debt is the thing making all your other debt unmanageable: This is exactly the situation where bankruptcy eliminates the problem completely. Medical debt is fully dischargeable. Schedule a free consultation with Damon Day, an independent debt coach and my co-host on the Get Out of Debt Guy podcast, to talk through whether the math favors a fresh start — I receive no payment for this referral.
Don’t assume your insurer is following the law. 112 physician organizations just told federal regulators that health plans are routinely violating the No Surprises Act. If you receive a bill that seems wrong, challenge it. The complaint process exists. Use it.
The Bottom Line: The No Surprises Act is the law. But laws only work when they’re enforced, and right now 112 medical organizations are sounding the alarm that insurers are gaming the system. If you’ve been hit with a medical bill that feels wrong — especially from an out-of-network provider you didn’t choose at an in-network facility — you have rights. File the complaint. Ask for financial assistance. And if medical debt has become the domino that’s knocking everything else down, know that it’s 100% dischargeable in bankruptcy.
Medical debt is the most unfair debt there is — nobody chooses to get sick. After decades of watching this play out, my advice is simple: don’t let a billing dispute become a financial crisis. You have more leverage than the bill makes you feel. Use this as a map, not a mandate — your situation has specifics that only you know.
Dealing With Debt? Understanding your options is the first step. See how all your debt relief options compare — including ones most sites won’t tell you about. The Find Your Path quiz gives a recommendation based on your actual numbers, and the Scam-O-Meter checks any company’s complaint history before you sign. Federal Reserve research shows bankruptcy filers recover faster than those who don’t file.
