In the United States, many patients make a Faustian bargain with the doctor: Yes, the doctor promises skills, medicines, and treatments to save you, but you will live in a prison of debt as you enter a circle in America’s health care Hell.
In America, our free-market un-system, with thousands of uninsured and underinsured, has spawned a uniquely American category of impoverishment: medical debt.
A Kaiser Family Foundation analysis estimates that nearly 1 in 10 adults – or roughly 23 million people – owe medical debt; 11 million owe more than $2,000; 3 million owe more than $10,000.
Some of the “medical deadbeats” end up in “medical bankruptcy.” Their average age is 45; 46.3% are married; 60.3% attended college; their average monthly household income is $2,586; the average debt is $44,622.
The causes are legion. The uninsured are awash in debt: If an uninsured person hobbles with a broken ankle into an emergency room, the tab might run to five figures. Even people with insurance, though, risk ending up on the rolls of a collection agency.
Co-payments — often just $15 or $20 for an office visit — can run to thousands for hospitalizations. Traditional Medicare leaves patients with a 20% co-pay for hospital stays - one reason most “traditional” Medicare patients purchase “Medi-gap” policies to cover that shortfall. Regular insurance has its own deductibles and co-payments, as well as caps on coverage: a long stay can eat into a nest egg. Then there are the surprises: an insurer covers treatment at Hospital A, not at Hospital B, nearby. The patient is the buyer; s/he must shop. So too, “reference pricing” makes patients into shoppers. In “reference pricing,” the insurer sets a maximum amount it will pay; it behooves the patient to check the fine print before collapsing in an emergency room. An unlucky patient will face a hefty surcharge. As for the poor, Medicaid offers protection, but states vary in their coverage, leaving people who might be insured in the Northeast uninsured in the Southeast - debt-by-geography. (The Urban League compiled a map showing debt-by-county. See .)
To compound the misery, unpaid debt racks up interest. Finally, a swathe of religious Americans have bought into faith-based health-plans, which guarantee prayers, but not much of a financial payout.
Beyond the boggling statistics are the tales of despair. One family owed $80,000 after their twins were born, prematurely. Ten years later, the parents are still paying. Another man faced a $20,000 bill from an emergency room visit; the hospital sued to collect. People risk losing their houses to foreclosure, losing their apartments to eviction.
States can act. They can expand Medicaid. They can stop hospitals from putting liens on patients’ homes. They can force hospitals to expand financial aid. They can demand that hospitals offer free care to patients with low incomes. They can cap annual out-of-pocket charges to families below a set income. They can stop selling patients’ debt to third parties. They can clamp down on the aggressive tactics of collection agencies. They can limit interest rates on the debt. But maybe not surprisingly, the states with the poorest patients, like South Carolina, Texas and Tennessee, have not passed these measures.
Now, we have good news on the credit-score front. The federal government asked federal lenders to stop considering medical debt in loan applications; the three large credit-reporting agencies have followed suit. If you have paid a bill that went into collections, that will not go on your credit score for a year.
Yet, while the medical debt will not longer depress your credit score, it will depress your budget. You will still face the bills, the dunning letters, the threat (depending on your home state) of liens.
The solution is national health insurance, with built-in guard rails against those “gotcha” fine print codicils: pre-existing conditions, reference pricing, exclusive networks, unreasonably low caps, unreasonably high premiums, high co-payments. And most of all, we must cover all Americans, regardless of income, with no mediocre plans.
Let’s end the Faustian bargain.
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.
From The Progressive Populist, August 15, 2022
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