Ginnie Graham: Medical debt will come to the fore after the pandemic | Columnists
The pandemic has kept accounts coming on Go Fund Me — America’s latest way to pay for health care.
A search for “Tulsa” and “COVID” brings up more than 640 accounts; various changes to the words lead to different results.
Some of them are for non-medical but important causes, such as helping minimum-wage workers and the self-employed. But, like bankruptcy filings, the crowdsourcing platform reflects a staggering amount of medical debt.
For the past year, work has focused on immediate needs: prevention, screening, treatment. Once this is lifted, medical debt will come to the fore again.
This historic moment revealed our weaknesses. Too many people go without food and Internet access. Too many workers have no savings and live paycheck to paycheck. Public systems, like unemployment, are woefully underfunded.
Medical debt is one of these unmentionable.
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The federal coronavirus relief program provided aid to COVID-19 patients. This may not have been enough, and the long-term health effects for survivors are unknown.
“COVID-19 did not create the medical debt problem,” said Allison Sesso, executive director of national charity RIP Medical Debt. “It was well underway with billions in medical debt across the country. What COVID did was exacerbate something that was already there.
“This is both a health care crisis and an economic crisis.”
Medical debt data is everywhere; all show that it is overwhelming for millions of Americans.
The latest estimate of US medical debt in collection is $45 billion, according to a USA Today report of analysis by consumer lending firm Credit Karma. This averages out to around $2,200 per person.
Nearly a third of workers currently have medical debt and 28% of them owe more than $10,000, according to a Salary Finance survey. Of these, around 54% said they had defaulted on their bills.
Another survey, from Debt.com, shows that 56% of Americans have medical debt in collection, the majority of which is less than $5,000.
For a couple over 65 retiring this year, Fidelity Investments estimates that about $295,000 (after tax) will be needed to cover health costs.
The United States ranks third in the world for medical bankruptcies, behind China and India, according to the World Population Review.
“There’s a huge stigma around it, but it’s become the American norm,” Sesso said.
RIP Medical Debt is a national, non-profit organization that works to eliminate debt by buying up old debts in collections and paying them off for patients. Tulsa couple Mark and Mona Whitmire and the local Morningcrest Foundation launched a grassroots effort last year that cleared $28 million in debt for 28,321 county families.
It’s not just the debts of the uninsured. Much of that comes from workers whose copayments and deductibles are too high to handle.
“We’re really seeing $1,000 bills,” Sesso said. “The fact that someone can’t come up with $1,000 to pay a deductible because they live so close to the edge is a big deal.”
The direct costs of COVID-19 are an ever-changing estimate.
Depending on the age of the patient, hospital costs for the uninsured average $51,389 to more than $78,000, according to HealthCare Finance from a FAIR Health study. For those with insurance, that averages between $26,152 and $40,208.
In total, COVID-19 treatment costs could reach $546.6 billion, according to U.S. health insurance plans.
The CARES Act bill provided $175 billion through a provider relief fund. Providers can request reimbursement of costs related to COVID-19 by contacting the fund. This is to ease the burden on providers and insurers.
Some providers cover all COVID-19 related costs for patients. Other approaches are to first recover costs from patients and then seek reimbursement or apply a portion to patient bills.
This relief will not extend to long-term effects and only applies to coronavirus costs. Other patients do not receive this help.
“People have this idea that anybody will do anything for their health. But if the economy is so bad, people won’t get care or they’ll do things like ration medicine,” Sesso said. “It’s real, and it’s important for access to health.”
Nationally, RIP Medical Debt has eliminated approximately $3 billion in debt since its launch in 2014.
“It’s a drop in the bucket,” Sesso said. “But for the two million people we’ve helped, we’ve helped in a major way. We must strengthen our ability to obtain the abolition of the debt.
The goal is to step up efforts to repay $10 billion a year to the United States. One challenge has been to get hospitals to sell or donate debt to the nonprofit organization.
“Many will write it off their books as a bad debt and move on,” Sesso said. “They don’t see that, and it has no value for hospitals. So, let’s get that debt.
In Tulsa, the Whitmires are creating a unique model of RIP medical debt. Instead of a one-time ride, they’re establishing an ongoing campaign to write off qualified medical debt in Tulsa County as it accumulates.
“Tulsa in these efforts is a pioneer,” Sesso said. “It’s a model that Tulsans should be proud of: trying to bring super committed people to the table to get out of debt.”
This is just a small piece to help with the problem.
Medical debt cannot be solved by the generosity of donors. There must be broader systemic changes in health care.
Oklahoma voters forced the first step with Medicaid expansion. Other measures are greater price transparency, insurance options for workers, advocates for patient billing, negotiations and reductions in administrative costs.
Encourage preventative care and control prescription drug costs.
Some providers are moving away from pay-per-service models to focus on patient-value experiences. These were retainer-type fees and other cost-sharing approaches with other vendor resources.
Communities have unique elements. Local leaders – elected officials, philanthropists, hospital and insurance executives and association administrators – should meet regularly to find ways to reduce costs for residents.
Health care is a sign of a community’s prosperity, as are poverty, unemployment, and high school graduation rates. Debt affects all of this.
“Medical debt has an impact on health,” Sesso said. “It’s a stress that can physically affect a person’s well-being. … The more communities can come together to think proactively, the more debt can be alleviated. “
Ginnie Graham 918-581-8376
Twitter: @Ginnie Graham