Unpaid medical debt after hospital visits has become of increasing concern for many Americans.
Healthy individuals and those with preexisting conditions are facing rising medical costs associated with care that can quickly turn into unpaid debt, according to The Robert Wood Johnson Foundation, which found that more than one in seven (15%) of adults in the United States report past-due medical debt.
Medical debt is any balance owed after receiving medical services. Overdue medical expenses have significant impacts on the patient. Often, patients with large sums of medical debt choose to forgo medical assistance in the future to avoid further fees. Impacts of debt also include struggling to afford expenses such as food and rent, in addition to dealing with damaged credit.
Discounted care
Many hospitals in the United States are not-for-profit, which qualifies them for federal tax exemptions. These types of hospitals account for 60% of the hospitals in the nation. Nonprofit hospitals must provide charity care and community benefits to receive tax breaks.
Charity care is financial assistance or discounted medical services for individuals (under specific eligibility criteria) who are unable to pay for health services. Hospitals have flexibility when it comes to establishing eligibility criteria for discounted healthcare.
The immense flexibility hospitals have when determining eligibility criteria leads many patients who qualify for financial assistance to not receive it, with some even facing debt collection, according to The Robert Wood Johnson Foundation. “Though about one-third of adults with past-due hospital bills reported working out a payment plan, only about one-fifth received discounted care,” according to The Robert Wood Johnson Foundation.
Disproportionate debt
Medical debt is prevalent in the United States, especially debt related to hospital visits. Among adults who report owing past-due medical debt to hospitals, 29.7% owe all their debt to hospitals, and 45.1% owe their debt to hospitals and other providers, according to The Robert Wood Johnson Foundation.
Medical debt is found to be higher for certain populations, especially adults with disabilities, minorities, and individuals with low income. “Adults with disabilities were more than twice as likely as those without disabilities to report past-due medical debt, and Black and Latino adults were more likely to report past-due medical debt than White adults,” according to the Robert Wood Johnson Foundation.
Solutions
Current federal policies in place have been in the process of change so those seeking care can afford the medical assistance they need. Standards also have been set in place to improve access to affordable care.
According to The Robert Wood Johnson Foundation, “Federal legislative and regulatory efforts could build on state-level protections by clarifying and strengthening community benefit standards for nonprofit hospitals, expanding consumer protections to other hospitals and health care providers, increasing standards and oversight of aggressive collection practices, and improving reporting of charity care and collection actions.”