Af­ford­abil­ity of med­i­cal bills

CDC re­port: Bills present hard­ship to fam­i­lies with and with­out in­sur­ance

Modern Healthcare - - FRONT PAGE - Me­lanie Evans

Pri­vate health in­sur­ance may of­fer house­holds lit­tle pro­tec­tion from fi­nan­cial stress as med­i­cal bills fol­low ill­ness and in­jury. Nearly one-third of U.S. res­i­dents with com­mer­cial in­sur­ance are in fam­i­lies that strug­gle to pay bills or must pay off debt over time, the Cen­ters for Dis­ease Con­trol and Preven­tion es­ti­mated in a re­port pub­lished last week. Health plans with large de­ductibles or co-in­sur­ance could leave house­holds par­tic­u­larly vul­ner­a­ble to bur­den­some med­i­cal debt. More than half of in­di­vid­u­als are in fam­i­lies with out-of- pocket ex­penses of $2,000 or more that strug­gle with med­i­cal bills, the agency said.

The CDC pro­duced the es­ti­mates for the first time based on sur­veys con­ducted with roughly 52,000 in­di­vid­u­als be­tween Jan­uary and June last year. They of­fer a snap­shot of the fi­nan­cial strain to house­holds—and providers—when pa­tients can­not af­ford med­i­cal bills.

One in 10 in­di­vid­u­als was in a fam­ily that had med­i­cal bills they could not pay, the CDC said. One-fifth strug­gled to pay med­i­cal bills in the year prior to the sur­vey.

Dis­tress was most acute among the unin­sured and the poor or nearly so, ac­cord­ing to the agency. Those groups were the most likely to be un­able to pay med­i­cal bills com­pared with those with in­sur­ance and higher in­comes.

A lit­tle more than 1 in 5 unin­sured were in fam­i­lies that could not pay med­i­cal bills; the same was true for the poor (those with in­comes be­low the fed­eral poverty thresh­old, or $22,350 for a fam­ily of four) and nearly poor (up to 200% of the thresh­old).

Nonethe­less, an es­ti­mated 16% of in­di­vid­u­als were in fam­i­lies who were cov­ered by pri­vate in­sur­ance but nev­er­the­less strug­gled to pay med­i­cal bills in the pre­vi­ous year, and 6% had bills they were un­able to pay.

For house­holds, med­i­cal debt can jeop­ar­dize credit scores or force a choice be­tween med­i­cal bills or ne­ces­si­ties. For hos­pi­tals and health sys­tems, un­paid bills erode rev­enue and can add pres­sure on mar­gins.

Wel­ls­tar Health Sys­tem col­lects roughly half the de­ductibles and co­pay­ments that pa­tients owe the sys­tem, said Jim Budzin­ski, Wel­ls­tar’s ex­ec­u­tive vice pres­i­dent and chief fi­nan­cial of­fi­cer. Un­paid bills from pri­vately in­sured pa­tients have grown and will cost the sys­tem an ad­di­tional $3 mil­lion for the year that ends in June, he said.

Dur­ing the eco­nomic down­turn, un­em­ploy­ment soared around Ma­ri­etta, Ga., where Wel­ls­tar is based and op­er­ates two of its five hos­pi­tals. Lo­cal un­em­ploy­ment re­mains above 9% and the num­ber of unin­sured pa­tients in­creased at Wel­ls­tar by 7% dur­ing the first seven months of the fis­cal year com­pared with the same pe­riod a year ago.

Budzin­ski said that will amount to $9 mil­lion of ad­di­tional un­com­pen­sated care this year. “We are wor­ried about whether the trend will con­tinue,” he said.

Losses from pa­tients who can­not or do not pay has added to pres­sure for Wel­ls­tar to curb ex­penses and find ways to op­er­ate more effi-

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Glenn and Tracy Mccarthy said they are con­sid­er­ing declar­ing bank­ruptcy to pay their med­i­cal bills.

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