Investigating medical debt
Medical debt continues to impact Americans across the country at an insidious rate. The United States spends $3.5 trillion on health care per year. This casual epidemic shows no signs of abating as many people learn to navigate life in perpetual debt.
Approximately 23 million people owe money for health costs. “About half of those reporting significant medical debt owe more than $2,000,” according to a Kaiser Family Foundation report from 2016. A small percentage of the population owes more than $10,000.
Garnished wages, debt collectors, and a sense of dread pervade all those with debt, but perhaps none more so than people who have accumulated medical debt — some with insurance, some without it — after undergoing necessary and sometimes basic healthcare procedures.
Everything is bigger in Texas, including medical debt.
The Lonestar state is estimated to have $14.6 billion in medical debt, according to data released by Nicerx, a company whose mission is to provide safe and affordable access to prescription medicine. Florida boasts $8.2 billion in medical debt, closely followed by California with $7.5 billion. Georgia assumes fourth place with $3.6 billion in debt, just above South Carolina with $3.5 billion.
These numbers are staggering, particularly when learning which states have the least medical debt.
Vermont has the least amount of debt, but that debt is still $42 million. The other states with the lowest medical debt include North Dakota ($61 million), Rhode Island ($72 million), South Dakota ($79 million), and Hawaii ($126 million).
Dani Honeycutt is a 36-old married woman from rural East Tennessee. She has spent years navigating the challenging medical industry, first trying to get a diagnosis, then learning just how much everything would cost.
“I have several autoimmune diseases that affect my daily life,” Honeycutt told us. “It took five years just to get a diagnosis and help,” she says. But that was just the beginning of her troubles.
Five years of trying to get a diagnosis also means five years of accumulating medical debt.
“I work full-time and run a side business just to keep up with my medication costs, co-pays, and trying to handle my medical debt, but it feels like it’s never enough,” she says. Honeycutt juggles making ends meet, her health, and playing catch up, paying back an industry that was supposed to help her.
Honeycutt has even been taken to court over her medical debt. In 2022, she received a summons over an emergency room bill for a hospital that closed four years ago. “It was for an emergency room visit where I received no help at all,” she says.
Hospital lawsuits against patients are not uncommon. In Wisconsin, lawsuits involving unpaid medical bills increased by 37 percent from 2001 to 2018, disproportionally affecting Black and low-income patients.
Honeycutt still owes more than $500 for that emergency room visit, but her total debt is more daunting. She estimates her outstanding medical bills amount to $10,000, which doesn’t include medications and co-pays she’s currently responsible for.
“Just trying to cover my regular bills and keep up with my current health bills has left me penniless,” says Honeycutt. She’s not alone.
There are more than $140 billion in unpaid medical bills in America today. According to the National Conference of State Legislatures, nearly 20 percent of the population struggles with medical debt. Their investigation also found “consumers may face legal challenges, wage garnishment, and other debt collection practices by health providers to obtain payment.”
Medical debt impacts everyone. It can lead to bankruptcy and future illness left untreated for fear of the cost. The Survey of Income and Program Participation (SIPP) found race, education, and insurance to impact medical debt.
27.9 percent of Black and 21.7 percent of Hispanic households were more likely to have medical debt when compared to white families. Homes whose members didn’t complete a college degree were more likely to have medical debt (26.2 percent) than those who finished college (15.5 percent).
And while health insurance may seem like a way to avoid medical debt, it’s not impenetrable to the debt epidemic. Households with full health coverage still had a median medical debt of $2,000.
Although medical debt can be scary, there are certain steps you can take to manage your debt. We spoke with Jessica Baladad, the founder and chief advocate of Feel For Your Life, to learn her tips for negotiating medical bills.
Don’t give out your social security number when seeing a new provider for the first time. “They don’t need it to treat you,” explains Baladad, “they only need it to turn your bill over to collections if you default on payment.”
Negotiate the price if you know you’re about to have a procedure done. Baladad suggests paying up-front and asking for a discount. Alternatively, you can volunteer for a fast-tracked payment plan with a discount. “Your provider will want to work with you because they don’t want to sell your debt to a collections agency,” she says.
If the procedure has already been done, request an itemized bill and look up the codes. “Be aware of upcoding, unbundling, and balance billing,” she cautions.
The average medical debt in the U.S. still amounts to approximately half of all debt period. It’s a sobering reality that extends far beyond state lines. The debt epidemic continues to spread with no tangible end in sight.