Soaring medical debt in the United States affects more than 100 million people

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Elizabeth Woodruff emptied her retirement account and took three jobs after she and her husband were sued for nearly $10,000 by the New York hospital where her infected leg was amputated.

Ariane Buck, a young father in Arizona who sells health insurance, was unable to make an appointment with his doctor for a dangerous intestinal infection because the office said he had unpaid bills.

Allyson Ward and her husband loaded up with credit cards, borrowed from relatives and delayed student loan repayments after the premature birth of their twins left them with $80,000 in debt. Ward, a nurse practitioner, took extra day and night shifts.

“I wanted to be a mom,” she said. “But we had to have the money.”

The three are among more than 100 million people in the United States – 41% of them adults – plagued by a healthcare system that systematically pushes patients into large-scale debt, a survey by KHN and NPR shows.

The investigation reveals a problem that, despite renewed attention from the White House and Congress, is far more widespread than previously reported. Indeed, much of the debt incurred by patients is hidden in the form of credit card balances, family loans, or payment plans to hospitals and other medical providers.

To calculate the real extent of this debt, the KHN-NPR survey relies on a nationwide survey conducted by the nonprofit Kaiser Family Foundation for this project. The survey was designed to capture bills that patients could not pay, as well as other loans used to pay for health care. New analyzes from the Urban Institute and other research partners also shed light on the project.

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More than half of American adults say that in the past five years they have gone into debt because of medical or dental bills, according to the KFF poll.

A quarter of adults with health care debt owe more than $5,000. And about 1 in 5 people, regardless of the amount of their debt, said they never expected to pay it back.

“Debt is no longer just a bug in our system. It’s one of the main products,” said Dr. Rishi Manchanda, who has worked with low-income patients in California for more than a decade and served on the board of directors of the nonprofit RIP Medical Debt “We have a healthcare system that is almost perfectly designed to create debt.”

The burden forces families to reduce their spending on food and other essentials. Millions of people are being driven from their homes or going bankrupt, according to the poll.

(Daniel Wood, NPR; Noam N. Levey, KHN)

Medical debt piles up on people with cancer and other chronic illnesses. Debt levels in US counties with the highest disease rates can be three or four times higher than in the healthiest counties, according to an analysis by the Urban Institute.

Debt widens racial disparities.

And it prevents Americans from saving for retirement, investing in their children’s education or buying a home.

Perhaps most perversely, medical debt prevents patients from receiving care.

According to the survey, around 1 in 7 people with debt said they had been denied access to a hospital, doctor or other provider because of unpaid bills. An even larger share—about two-thirds—delayed care because of cost.

“It’s barbaric,” said Dr Miriam Atkins, a Georgia oncologist who, like many doctors, said patients had dropped out of treatment for fear of going into debt.

Patient debt is piling up despite the landmark 2010 Affordable Care Act, which extended coverage to tens of millions of Americans but hasn’t slowed the rise of high-deductible health plans that leave patients with thousands of dollars in bills.

Today, hospitals and other healthcare providers pump millions into credit cards and other loans.

Patient debt also supports shadowy collection activity fueled by hospitals selling debt to collection companies.

America’s debt crisis is driven by a simple reality: Half of American adults don’t have the money to cover an unexpected $500 health care bill, according to the KFF poll.

Many simply do not pay. Medical debt is the most common form of debt on consumer credit reports.

Since last year, 58% of receivables registered for collection concerned a medical bill, according to the Consumer Financial Protection Bureau. That’s nearly four times as much debt attributable to telecom bills, the second most common form of debt on credit reports.

Chart showing the types of medical debt people have

(Daniel Wood, NPR; Noam N. Levey, KHN)

But medical debt on credit reports is only a fraction of the money Americans owe for health care, the KHN-NPR survey shows.

  • According to the KFF poll, around 50 million adults – about 1 in 5 – pay their bills for their own care or that of a family member through an installment plan with a hospital or other provider.
  • One in 10 people owe money to a friend or family member who has covered their medical or dental bills, another form of borrowing that is not usually measured.
  • Even more debt ends up on credit cards as patients charge their bills and accumulate balances. About 1 in 6 adults pay a medical or dental bill on a card.

For many Americans, medical or dental debt can be relatively small. About a third owe less than $1,000, according to the KFF poll.

But health debt can be catastrophic.

Sherrie Foy

Sherrie Foy of Moneta, Va., had her retirement plans turned upside down when surgery to remove her colon left her with more than $800,000 in bills and forced her and her husband, Michael, into bankruptcy .

(Carlos Bernate/For Kaiser Health News)

Sherrie Foy, 63, and her husband, Michael, saw their retirement turned upside down when Foy’s colon had to be removed.

After Michael retired from Consolidated Edison in New York, the couple moved to rural Virginia. Sherrie had the space to look after the rescued horses.

The couple had saved diligently and had health insurance for retirees. But Sherrie’s surgery resulted in medical bills that exceeded the $1 million cap on their health plan.

When Foy was unable to pay more than $775,000 she owed to the University of Virginia Health System, the couple filed for bankruptcy.

The Foys cashed in on a life insurance policy and liquidated savings accounts the couple had set up for their grandchildren.

“They took everything we had,” Foy said. “Now we have nothing.”

Medical and dental bill debt affects nearly every corner of American society, overwhelming even those with insurance coverage through work or government programs such as Medicare.

About 1 in 8 medically indebted Americans owe $10,000 or more, according to the KFF survey.

Americans have been particularly hard hit by the rise of high-deductible health plans, which require people to pay thousands of dollars out of their own pockets before coverage kicks in.

About a third of older people owe money for care, according to the survey. And 37% said they or someone in their household had been forced to cut back on food, clothing or other essentials.

Nearly half of Americans living in households earning more than $90,000 a year have incurred healthcare debt in the past five years, according to the KFF poll.

Women are more likely than men to be in debt. And parents have health debts more often than people without children.

Nationally, according to the poll, black adults are 50% more likely and Latino adults 35% more likely than white people to owe money for care.

The mounting debt burden has sparked new interest from elected officials, including the White House, which in April announced new initiatives to crack down on debt collectors and track financial aid to hospitals.

The changes are unlikely to address the root causes of this national crisis. “The #1 reason, and the #2, 3, and 4 reasons, why people take on medical debt is that they don’t have the money,” said Alan Cohen, co-founder of the Centivo insurer who worked in the field of health. benefits for decades.

Buck, Arizona’s father who was denied care, saw this first hand selling health insurance plans to seniors. “I’ve had elderly people cry on the phone with me,” he said. “It’s horrible.”

Buck, now 30, recovered from the gut infection, but after being forced into a hospital emergency room he was hit with thousands of dollars in medical bills.

Today, the Bucks, who have three children, estimate they owe more than $50,000.

“We all had to scale everything down,” Buck said. Children wear second-hand clothes. They skimp on school supplies and rely on family for Christmas presents. “I feel like I failed as a parent.”

The couple are about to file for bankruptcy.

ABOUT THIS PROJECT

“Diagnosis: indebtedness” is a reporting partnership between Kaiser Health News and NPR exploring the magnitude, effects and causes of medical debt in America.

The stories are inspired by KFF Healthcare Debt Survey, a poll designed and analyzed by public opinion researchers from the Kaiser Family Foundation in conjunction with KHN journalists and editors. The survey was conducted from February 25 to March 20, 2022, online and by phone, in English and Spanish, among a nationally representative sample of 2,375 American adults, including 1,292 adults with current health debt and 382 adults with health debt over the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.

Further research has been conducted by the Urban Institutewhich analyzed credit bureau and other poverty, race, and health status demographics to explore where medical debt is concentrated in the United States and what factors are associated with high debt levels.

The JPMorgan Chase Institute records analyzed from a sample of Chase credit cardholders to examine how customer balances can be affected by large medical expenses.

Reporters from KHN and NPR also conducted hundreds of interviews with patients across the country; spoke with doctors, healthcare industry leaders, consumer advocates, debt lawyers and researchers; and reviewed dozens of studies and surveys on medical debt.

Levey writes for Kaiser Health News, an editorially independent publication Kaiser Family Foundation. Kaiser Health News is not affiliated with Kaiser Permanente.

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