Medical debt can crush even the insured

By Denise Mann
health day reporter

MONDAY, Sept. 19, 2022 (HealthDay News) — Weeks after a hospital stay, your bill arrives and you can hardly believe the amount owed. How is that possible if you have good health insurance, and more importantly, how are you going to pay for it?

Unfortunately, you are not alone. More than one in 10 American adults and nearly one in five American households have medical debt, according to a new study. Worse still, incurring medical debt more than doubles your chances of not being able to pay food, rent, mortgage or utilities, and losing your home.

“Medical debt is incredibly common and it’s toxic,” said study author Dr. Steffie Woolhandler. She is a primary care physician and Distinguished Professor at Hunter College in New York.

It’s a vicious circle, said Woolhandler, also an associate professor of medicine at Harvard Medical School in Boston and a research associate for the Public Citizen’s Health Research Group, a nonprofit consumer advocacy organization.

“People are getting sick and taking on medical debt, which leads to food insecurity and housing insecurity, which makes them even sicker, so they need more medical care and they take on even more medical debt,” he said. she declared.

The bottom line? “They’re getting sicker and poorer and sicker and poorer,” Woolhandler explained.

For the study, researchers analyzed data from the US Census Bureau’s 2018, 2019 and 2020 surveys of income and program participation for a group of people who had participated for all three years. They used this data to isolate the effects of medical debt.

The average amount of medical debt was about $2,000 for an adult and about $4,600 per US household, according to the study.

Medical debt was common even among insured people.

“There have been other reports of medical debt, but this is the first time we’ve been able to link it to consequences such as starving yourself and losing your home,” Woolhandler said.

Middle-class Americans were just as likely as low-income people to have medical debt. People with military health insurance had the lowest rate of medical debt, at just under 7%, according to the study.

Those most at risk for new medical debt are those who have become newly disabled, have been hospitalized or have lost health insurance, the researchers reported.

It’s time to fix this mess, and it can be done, Woolhandler said.

“Polls show the majority of Americans would support a system where the government pays all medical bills,” she said.

The recent No Surprises Act has helped to improve things a bit. This bill took effect in January and protects insured people from receiving surprise medical bills due to unexpected, out-of-network coverage for medical care.

There are other things you can do to reduce your risk of incurring crippling medical debt, she said. “If you go to the hospital and get a bill you can’t pay, try to negotiate,” she said. “You’re in much better shape to talk to the hospital than to a collection agency.”

Many hospitals also have financial aid programs, she said. Always review all medical bills and make sure they’re accurate, she suggested.

The results were published online September 16 in Open JAMA Network .

Allison Sesso is President and CEO of RIP Medical Debt, a national non-profit organization based in Long Island City, New York, which seeks to help people get out of medical debt.

“Medical debt is not just a mark on a person’s credit score. We know this prevents patients from seeking further care or being denied care,” said Sesso, who is unrelated to the new study.

“Medical debt doesn’t just affect the uninsured: people with health insurance are at risk of incurring medical debt because of high out-of-pocket costs,” she added.

Why? The average annual deductible for employer-sponsored insurance has steadily increased. “Making sure people have access to affordable, strong, low-deductible health insurance plans is the best way to close the health insurance gap,” Sesso said.

Implementing expanded Medicaid — which would cover more low-income Americans — in holdout states is an immediate way to help millions of people avoid medical debt, she added. And financial assistance must be extremely accessible when people see a doctor or go to the hospital.

“We would like to see a ban on extraordinary collection practices like lawsuits, wage garnishments and liens on homes for people who simply cannot pay astronomical medical debt,” Sesso said.

More information

RIP Medical Debt offers advice on how to avoid medical debt.

SOURCES: Steffie Woolhandler, MD, MPH, primary care physician, professor emeritus, CUNY’s Hunter College, New York, lecturer, medicine, Harvard Medical School, Boston, research associate, Public Citizen Health Research Group; Allison Sesso, President and CEO, RIP Medical Debt, Long Island City, NY; Open JAMA Networkn, 16 September 2022, online

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