ACA Premiums Are Going Up Again and Patients are Paying the Price
Lawmakers wanted to reform surprise billing so patients weren’t hit with unexpected charges. But they also created a parallel system with new middlemen that is increasing health care costs.
By David Dayen
August 13, 2026
Official Washington, and more surprisingly Donald Trump’s administration, is doing something that you almost never see: admitting policy failure. In late 2020, Trump signed the No Surprises Act, which was intended to prevent the intolerable situation of patients getting unexpected and enormous bills for medical treatment undertaken by “out-of-network” providers. Routine practices where patients didn’t have a choice like anesthesia or radiology services could suddenly trigger bills equal to an American’s median income, if not higher.
The No Surprises Act set up a process whereby insurance companies and providers would negotiate over these out-of-network charges, and patients wouldn’t take the hit. It’s succeeded in that respect: People aren’t getting surprise bills. But it’s failed on virtually every other score, merely shifting an overly bureaucratic, wildly extractive, and unendingly wasteful nightmare to another venue. Patients are paying for this, just in overall premiums instead of unlucky one-off bills. Practically everyone else involved in the process is churning out profits, including an entirely new group of middlemen capitalizing on the dispute resolution process.
The situation has been mirrored in U.S. health care so often that yet another layer of extractive bureaucratic waste is, well, no surprise. A confounding administrative system is deemed broken, and a new administrative system replicates the problem in a slightly different way. The solution is well known enough that every industrialized country has adopted it in some form—universal public insurance—but it’s zealously opposed by the very industries benefiting from a fragmented status quo.
WHILE POLICYMAKERS WERE ADAMANT that sticking patients with huge bills was politically untenable, powerful industries fought viciously over the solution. On one side was a concentrated collection of insurance companies seeking lower payouts; on the other were private equity–owned staffing companies that own doctor’s practices and wanted to maximize profits.
Eileen Appelbaum, a private equity expert with the Center for Economic Policy and Research, wrote for the Prospect when the No Surprises Act was being debated that while the arbitration process to resolve claims proposed in the bill, known as the independent dispute resolution (IDR) process, was supposed to consider the in-network rate for various services, that was not mandated as a benchmark. This, Appelbaum said, would lead to more subjective judgments and “higher costs and premiums.”
Empirically speaking, that’s what happened. The government estimated that fewer than 20,000 disputes would be heard each year. But last year, there were 2.2 million, with payouts more than tripling relative to 2024, according to data from the Centers for Medicare & Medicaid Services reported by The Wall Street Journal. Providers are winning around 85 percent of the IDR cases, and some seemingly outrageous payouts, like $440,000 for a breast reduction and nearly $200,000 for a physician assistant on a scoliosis operation, have been recorded. The data caused a CMS spokesperson to claim that the system is being “gamed.”
Last year, there were 2.2 million disputes, with payouts more than tripling relative to 2024.
Some of that gaming may have come from CMS itself. Inside the data were 25 awards of over $10 million for individual procedures that cost in-network between $100 and $2,000; nine of those awards were over $200 million. This handful of awards accounts for $2.7 billion of the $15 billion in CMS-documented awards, which seems totally implausible. CMS did not respond to a request for comment about potential errors in the data.
UPDATE: CMS responded after press time that the disputing parties and IDR entities entered that data, and that any errors that are visible have been corrected by those parties and will be reflected in the next release.
But even putting the outliers aside, there’s been a substantial jump in disputes filed and awards given. The government should have known that arbitration would be widely used; their estimate was based on a state-based No Surprises Act in New York, which actually used a real benchmark and was thus shunned by providers. The year before the federal arbitration system went into effect, the state-based, no-benchmark arbitration law in Texas yielded 49,000 requests; extrapolating that out nationally, you get something much closer to what we’re seeing today.
The runaway awards directly contradict the other benefit that the No Surprises Act was supposed to provide: lowering overall health care costs. Everybody involved in the system intends to do the exact opposite, in fact.
FIRST, YOU HAVE THE PROVIDER GROUPS. Private equity–owned staffing firms that spent heavily to influence the makeup of…
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