Understanding Medical Debt Protections and Hospital Billing
About one in five adults overall say they had problems paying or were unable to pay medical bills in the past 12 months, according to KFF polling. This includes many who have health insurance.
Medical Debt and the Insured
Medical debt refers to debt incurred by individuals due to health care costs and related expenses, such as an ambulance ride or a doctor visit. In the United States, even patients with insurance coverage face considerable out-of-pocket responsibility. A 2009 study found that while 20% of adults with employer-sponsored insurance have been approached by collection agencies, almost 9% declared bankruptcy due to health expenses. An estimated 100 million people across the country carry medical debt, according to a 2023 national survey. Critically, about 60% of those found to have medical debt were insured, meaning a significant portion of medical financial hardship affects people who believed they had adequate coverage.
How Hospitals and Collection Agencies Handle Unpaid Bills
Medical debt differs from other forms of debt because it is usually incurred accidentally or faultlessly; people do not plan to fall ill or hurt themselves, and healthcare remedies are often unavoidable. Undue Medical Debt, a national nonprofit, buys unpaid medical bills in bulk from hospitals, physician groups, and collection agencies for a fraction of the cost. The organization’s recipient criteria is based on income: a person qualifies if they earn at or below 400% of the federal poverty level, or if they have medical debts that equal 5% or more of their annual income. In Michigan, a third round of debt relief issued by the state in partnership with Undue Medical Debt wiped $21 million in medical debt from the records of more than 9,700 residents. To date, Michigan recipients have received over $221 million in medical debt relief. The state’s debt forgiveness funding was part of a $4.5 million appropriation included in the 2024 state budget, which, when combined with local matching funds and partnerships, is estimated to erase $450 million in medical debt for more than 180,000 Michiganders once all funding is distributed.
Navigating Hospital Billing Departments and Financial Assistance
Patients can navigate hospital billing departments to dispute charges or apply for assistance. Research from the Centers for Disease Control and Prevention, using 2023 National Health Interview Survey data, reported that 21.2 percent of adults with disabilities lived in families that had problems paying or were unable to pay medical bills during the preceding 12 months, compared with 9.6 percent of adults without disabilities. The cost of health care can lead some to put off needed care; about three in ten adults say in the past 12 months they have skipped or postponed getting health care they needed because of the cost. Hospital financial assistance programs are often available, but eligibility and application processes vary by institution. Patients are encouraged to request itemized bills and verify charges against insurance explanation of benefits statements.
Utilizing Consumer Protection Laws and Managing Costs
Consumer protection laws exist to help manage unexpected medical costs. In Michigan, a package of bipartisan legislation introduced in the state Senate would cap interest rates, prevent medical debt from showing up on credit reports, require hospitals to set up financial assistance programs, and ban liens or home foreclosures based on medical debt. These bills have been stalled in the Republican-led state House of Representatives since the summer. Nationally, the disparity in medical debt burden is evident: using 2023 National Health Interview Survey data, the CDC reported that adults with disabilities are more likely to live in families struggling with medical bills than adults without disabilities. The bottom line is that medical debt remains a widespread issue, affecting insured and uninsured patients alike, and individuals should proactively engage with billing departments and explore available relief programs.
The Societal Impact and Public Concern Regarding Medical Debt
Medical debt is a uniquely American phenomenon that significantly influences public sentiment. According to a 2019 poll from the Pew Research Center, American citizens rank health care issues and medical expenses as a top public concern, often prioritizing these worries over the economy and terrorism. Unlike many developed nations where public health coverage is comprehensive, the United States leaves patients responsible for substantial costs even when they maintain insurance coverage, including plans under the Patient Protection and Affordable Care Act of 2010.
This financial strain extends beyond immediate billing, as medical debt is frequently cited as a primary cause of personal bankruptcy. Research indicates that the burden of these costs is particularly acute for specific demographics. According to 2019 research, adults between the ages of 18 and 64 and those lacking health insurance coverage are most familiar with medical financial hardship. It is estimated that up to 200 billion dollars of medical debt is currently owed across the United States. While those without insurance are highly susceptible to accumulating large debts for necessary medications and procedures, the prevalence of debt among the insured suggests that existing coverage often fails to protect families from significant financial instability.
Prescription Drug Costs and Care Delay
Beyond hospital bills, the cost of prescription medications significantly impacts patient health behaviors. According to KFF polling, about four in ten (43%) U.S. adults say they have not taken their medication as prescribed in the past year due to costs. This includes three in ten who say they have taken an over-the-counter drug instead of getting a prescription filled (31%), a quarter (27%) who have not filled a prescription, and one in five (19%) who have cut pills in half or skipped doses of medicine because of the cost.
The financial strain also leads many to avoid necessary medical attention. About three in ten (28%) adults say in the past 12 months they have skipped or postponed getting health care they needed because of the cost. Uninsured adults under age 65 (62%), young adults under age 30 (40%), Hispanic adults (34%), adults with lower incomes (32%), and women (31%) are among the most likely to report that they put off needed care in the past year because of the cost. Putting off needed health care can have health repercussions; about one in seven (15%) adults overall say their health got worse because they skipped or delayed needed care for any reason, including cost, rising to 27% among those with multiple health conditions.
Sources
- Medical debt
- Americans’ Challenges with Health Care Costs | KFF
- Michigan forgives $21 million in medical debt for more than 9,700 residents
Photo: Solomon203 (CC BY-SA 4.0)
