Affordability of medical bills
CDC report: Bills present hardship to families with and without insurance
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-
Glenn and Tracy Mccarthy said they are considering declaring bankruptcy to pay their medical bills.