More people have health insurance than ever before, but many still struggle to pay for care. A new report finds that medical debt is the biggest reason consumers are contacts by collection agencies.
The study by the federal Consumer Financial Protection Bureau found that 59 percent of people who reported they had been contacted by a debt collector said it was for medical services. Telecommunications bills were the second most common type of overdue bill for which debt collectors pursued payment, at 37 percent, and utilities were third, reported by 28 percent.
Unlike other types of debt, people with medical debt were prevalent across a range of income levels, credit scores and ages. A poll conducted in 2015 by NPR, The Robert Wood Johnson Foundation and Harvard’s T.H. Chan School of Public Health found that many people with health insurance still struggle to pay medical bills. Some 26 percent said health care expenses have taken a serious toll on family finances.
If efforts to overhaul the Affordable Care Act result in more people losing their coverage, those numbers could rise.
If that happens, consumer protections could be even more important. Before the health law passed in 2010, some states passed hospital fair pricing laws that generally restricted how much hospitals could charge uninsured patients for care to no more than what is paid by public and private insurers. The law typically also required hospitals to provide free care to low-income uninsured patients.
The laws were often initiated in response to aggressive billing and collection practices by hospitals, which would charge uninsured patients far higher rates than those paid by insured patients, who benefited from discounts negotiated by their health plans.