A nationwide survey conducted by the Commonwealth Fund has found that contrary to a common view that it is the uninsured that incur medical debt, the reality is that a sizeable fraction of adults in the U.S. with health insurance have medical debt.
The survey data reveals that about 33% of Americans that have private health insurance have medical debt, and nearly 40% of this group revealed that they drained part or all of their savings so they could pay bills. This finding offers a sobering reality check: health insurance is failing to deliver on one of its key objectives of protecting people from being devastated financially as a result of illness.
Approximately 30% of the adults with medical debt reported that they delayed getting the necessary healthcare they needed because of financial challenges, while another 30% revealed that they cut back on rent, heat or food in order to get by on a month to month basis.
The prevalence of medical debt prompted the researchers involved in this survey to suggest a number of interventions to be considered by policymakers. For example, they suggest that medical debt be banned from being reflected on credit reports across the country. They also called for factors, such as deductibles, that cause healthcare costs to rise so much to be addressed. Capping the payment rates for providers is also floated as a policy intervention to reduce the burden of medical debt.
Medical debt is very common among people who don’t have health insurance, according to research conducted on the subject. 6-in-10 of all uninsured adults reported that they had medical debt, while only 4-in-10 among those with insurance revealed that they had medical debt.
It was found that hospital care was a major driver of the medical debt that people carry. About 67% of the survey participants with medical debt said it was as a result of the care they received while hospitalized. Other settings, such as dental care, lab work and visits to doctors also contribute to the medical debt phenomenon, but not as much as hospital care does.
Who do these people blame for finding themselves saddled with medical debt? The insurance company, the healthcare system, healthcare providers, and the government. Some blame themselves.
Medical debt is one of the symptoms of a healthcare system that isn’t working for everyone and is in need of reform. For entities like Astiva Health that are at the forefront of providing MA plans to vulnerable communities, the realities of medical debt could be something they witness on a near daily basis.
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