No Surprises Act cut patients’ out-of-pocket costs by about $600 a year

The federal No Surprises Act, a bipartisan law which took effect in 2022, was designed to protect patients from unexpected out-of-network medical bills. New research published in The BMJ suggests the law has delivered on its central promise, as patients in states newly covered by the law saw a significant drop in out-of-pocket spending — about $567 less per year compared with those in states that already had similar protections in place.

“One in five insured adults in the U.S. incurred surprise bills before the No Surprises Act, and these bills frequently exceeded thousands of dollars, resulting in substantial financial hardship among patients,” said lead author Michael Liu, M.D., M.Phil., a clinical fellow in the Department of Medicine at Brigham and Women’s Hospital and a research fellow at the Smith Center for Outcomes Research at Beth Israel Deaconess Medical Center. “Government agencies have called for rigorous evaluations of the law, and we believe our paper is the first to do so.”

Researchers examined data from 17,351 privately insured adults between 2019 and 2024, comparing those in 18 states that gained protections under the law to residents of six states with existing comprehensive rules.

In the newly covered states, average annual out-of-pocket spending fell from $3,674 to $2,922. No comparable change was observed in states with prior protections.

Premiums and high-cost burdens unchanged

Despite the drop in direct spending, the law did not affect premium contributions or reduce the share of families experiencing “high burden” medical costs — defined as spending more than 10% of household income on health care. Premium spending remained flat across intervention and control states, and rates of high burden medical spending were largely unchanged.

That finding, though, runs counter to earlier projections by the Congressional Budget Office, which expected that limiting surprise bills would push premiums down by curbing excessive provider charges.

Liu and colleagues suggest the lack of premium savings may stem from how arbitration under the law is unfolding, noting that providers — particularly those backed by private equity — have prevailed in most payment disputes.

Policy gaps

Rishi Wadhera, M.D., M.P.P., M.Phil., senior author of the study and associate director of the Smith Center, said the results highlight the law’s partial success and its limitations. “Our findings have important implications for patients and should inform ongoing policy efforts to prevent financial toxicity and address the health care affordability crisis in the U.S.,” he said.

Researchers also noted that while protections against surprise billing are working as intended, broader measures will be needed to ease the overall financial strain on patients. Potential next steps include expanding the law to cover ground ambulance services — one of the most common sources of surprise bills — and strengthening oversight of payment arbitration processes.

The study situates the No Surprises Act within a broader affordability crisis. As of 2020, nearly 18% of Americans carried some medical debt, averaging $429 per person.

While the law has helped shield patients from sudden, unpredictable charges, many households continue to struggle with ongoing premium costs, high deductibles and medical debt.

In that context, the No Surprises Act appears to be a step forward, but not a cure-all.

As Liu and colleagues concluded in the study, “additional efforts are needed to alleviate health care related financial strain.”