Washington, D.C.—Even as Congress debates health reform proposals, millions of Americans—with and without health insurance—struggle to pay medical bills, and their numbers continue to grow. In response to this crisis, Families USA, the national organization for health care consumers, today released a consumer guide that offers strategies, tips, and warnings to consumers as they struggle to manage medical debt and to avoid bankruptcy.
Titled “Your Medical Bills: A Consumer's Guide to Coping with Medical Debt,” the guide details the legal rights and primary actions consumers should take to deal with rising medical expenses. The consumer-friendly guide offers step-by-step instructions on dealing with medical bills, beginning with the vital first step of reviewing each bill and learning how to appeal charges that may be inappropriate or that should be covered by insurance.
If debt looms, the guide offers advice on finding outside assistance, discusses federal and state protections for individuals dealing with medical debt, and what actions can be legally taken against them to collect medical debt. Those who find themselves deeply in debt are advised to weigh the pros and cons of filing for bankruptcy. Included in the guide is a list of Web links to additional services and information in their own states.
“Medical debt is a stealthy fiend, striking unexpectedly and feeding on both a family’s rising health care expenses and what may be a growing inability to pay because of a loss of a wage earner’s income,” Ron Pollack, Executive Director of Families USA, said today. “Medical debt can put a family over the edge into financial disaster, whether they are insured or uninsured, whether the family is low-income or middle-class.
“People faced with a mountain of unpaid medical bills need some clear signposts to guide them through this crisis,” Pollack said. “We have created this consumer guide because people in this situation need to know what their rights are and what steps to take first to deal with the problem of medical debt—a problem that a growing number of American families face each year.”
Pollack noted that in 2007, more than two out of five (41 percent) working-age adults had trouble paying their health care bills, were already paying off medical debt, or both.
Medical debt is a growing problem for both people who are uninsured and people who are “underinsured”—that is, people with coverage that has high deductibles, high copayments, many uncovered services, and arbitrary limits on coverage. More than three out of four people in families that spend more than 25 percent of their pre-tax income on health care are insured.
Undoubtedly, medical debt hits the uninsured especially hard, affecting both their health and their pocketbooks. They may delay or do without necessary care because of costs, but when they do seek care, in addition to paying the full cost of a medical bill, they may receive bills that are up to two-and-a-half times as high as those paid by public or private insurers, who can negotiate discounted prices.
Low-income families spend a higher proportion of their household earnings on necessities, such as housing, transportation, utilities, and food, and they are likely to lack health coverage. In fact, more than three out of five (62.8 percent) people in families that will spend more than one-quarter of their pre-tax income on health care in 2009 are from families earning less then $30,000 a year.
The middle class is not immune to the problem of medical debt. More than one-third (37.1 percent) of people in families that will spend more than 25 percent of their pre-tax income on health care in 2009 are from families that earn more than $30,000 a year.
Pollack noted that when people fall into medical debt, the consequences can be severe, leading individuals to postpone or forgo care and leaving families unable to pay other expenses. In addition, medical debt contributes to credit card debt, causes bankruptcy, and can threaten a family’s housing security by putting rent or mortgage payments out of reach.
“The growing number of families who are facing financial, health, and housing challenges because of rising medical costs is additional proof—if anyone needs such proof—that Congress must act to make quality health care affordable for all Americans,” Pollack said.
“In the meantime, it is our hope that our consumer guide will help families understand their rights and avoid some of the worst consequences of medical debt,” he said.
