Medical debt remains a uniquely American problem.
An estimated 17.8% of Americans had medical debts in collection as of June 2020, according to a study by Journal of the American Medical Association (JAMA), which analyzed consumer credit reports between January 2009 and June 2020.
The average amount of debt was $ 429, with the southern states recording the highest amount and the northeastern states recording the lowest. The expansion of Medicaid also played a major role: States that did not embrace the expansion saw higher amounts of debt in collections.
Yahoo Finance spoke to several Americans who shared the impact of medical debt on their lives.
“I hyperventilated every time I tried to pay the bills”
Diane F. from Maine saw her biggest financial problems come from herself and her family’s prescription drugs, which were paid for by credit card.
She estimated their debt to be as high as $ 15,000, telling Yahoo Finance that “all of the credit card charges for our prescriptions” were the main source of stress (as opposed to the medical bills themselves).
Diane takes three different prescriptions while her husband takes two. The highest price they paid for one was over $ 1,200.
“I have always strived to keep my credit rating at the best possible level,” she said. “Four or five years ago, I hyperventilated every time I tried to pay the bills. You see, the drugs were costing my husband and I up to $ 1,300 for some of our prescriptions.
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As part of her job, Diane signed up for an insurance plan “with a very high deductible”. Two of its medications are venlafaxine, which is free, and bupropion, which costs $ 64.80 for a 3-month supply. Her third drug, Latuda, cost her $ 398 in the first month and now costs $ 198 per month.
Latuda has a rebate program, but, she explained, once you participate in a government-sponsored program, such as Medicare, that rebate program is no longer in effect. When Diane turned 65, she could no longer afford her medication because her rebate “had gone”.
“So for a year a doctor played Russian roulette with my medicine trying to find something that would work,” she said. “We never did.”
“In other words, for us seniors, our mental health is not important,” she added. “A lot of drugs that would help with depression get expensive once you buy Medicare. They have discount cards as long as you don’t buy any government insurance. “
Despite these difficulties, Diane was still able to maintain her credit rating over 800 by first paying her bills and then using the rest of her money for essentials like groceries and gasoline.
She earned just enough to make the minimum payments for drugs and the mortgage.
But “the minimum credit card fees were overwhelming us,” she said.
“I was almost broke every week trying to pay the bills,” Diane said. “We might have been 5 or 6 years away from paying off our mortgage, but with credit card bills, car loans and general expenses, it was becoming almost impossible. We ended up refinancing our mortgage to combine our credit card debt that was significantly over $ 10,000. It lightened some of the burden.
This year Diane switched her insurance to a Humana Advantage plan, and although she described the cost as “outrageous,” she was able to switch back on Latuda. Her first month cost her $ 400 before the price dropped.
“It’s awful, but my husband and I found it necessary for my sanity,” she said.
‘I’m not alone’
Doug, a man from New Jersey, needed a biopsy, which later confirmed he had cancer. He was treated in a network hospital by a network anesthetist.
His procedure took place on November 15, 2019 and the samples began in July 2020. Yet the anesthesiologist has always billed him around $ 2,500.
One of the many ways that Americans are financially vulnerable to the American health care system is “surprise billing,” a type of balance billing where a patient receives networked care that is provided by an off-network health care provider. without the patient knows. (Balance billing occurs whenever a patient’s insurance does not cover the full cost of care.)
“My insurance company wrote me a letter after they failed to fix the problem saying I was illegally billed on balance, but they’re washing their hands of it,” Doug said. “I have since been contacted by collection agencies and lawyers trying to collect this ‘debt’. I don’t know if my credit will ultimately be affected by this.
As of April 2021, according to Credit Karma data provided to Yahoo Finance, approximately 21 million Americans had $ 46 billion in medical debt they faced. collections – which means that a third party debt collector is trying to get the money owed.
“Having been diagnosed with cancer, I had a lot of medical bills and had reached my ‘maximum amount’ for my insurance,” said Doug. “It was a rude awakening to learn that it means nothing when it comes to a provider balancing you.”
The bill is $ 1,406.22 and while Doug could afford to pay it, “after talking with my wife about it, we decided it was worth the credit not to give in to these guys.”
Doug took many steps to try to resolve the problem, including: working with his insurance company; respond to collection letters requesting verification of the debt; filing complaints with the NJ Board of Medical Examiners, Morristown Medical Center, Joint Commission and Better Business Bureau; and contact members of the media.
“New Jersey’s ‘comprehensive’ protection didn’t protect me,” Doug said. “I contacted every person I could think of to complain about this, but my complaints fell on deaf ears.”
And, he added, Google’s reviews for his anesthesiologist are “revealing.”
“I’m not alone,” he said, “just without recourse.”
A routine test gone bad
In February 2021, Patty E. visited her doctor for a routine colonoscopy. Before the appointment, she confirmed that the office had accepted her insurance.
But a few weeks after her procedure, she received a bill of over $ 800 from the doctor and a bill of over $ 6,700 from the place where she was performed.
“Turns out the doctor wasn’t on the network and my plan doesn’t cover anything if I go out of the network,” Patty said. “When I called the doctor’s office, they told me they didn’t realize they hadn’t taken out my insurance until they got my bill from the insurance company. assurance. They admitted it was a mistake on their part.
Despite the error, the hospital still charges her the full amount, although Patty pointed out that she “would never have knowingly agreed to be billed close to $ 8,000” for a procedure that is usually 100% covered. .
“Why didn’t anyone tell me they didn’t take my insurance?” Patty said. “There has to be a better way to identify valid insurance other than after the fact, when the patient is stuck with the bill.”