Medical Debt is An American Heartache
Kirsten Stewart reported about medical debt in the Salt Lake Tribune recently (http://www.sltrib.com/sltrib/news/54935642-78/medical-debt-kiarah-mccoy....).
Medical debt is a common burden in America, shouldered not just by the poor and uninsured, but scores of fully insured, middle-class families. It’s a leading cause of bankruptcy and well-documented drag on the economy, which industry experts say is getting worse.
And it’s uncertain whether federal health reform will bring relief.
"It’s a problem that affects everyone but the extremely wealthy, a problem of the 99 percent. And it’s a matter of bad luck for the people who incur it," said Mark Rukavina, a former consumer advocate and founder of the hospital advisory group, Community Health Advisors in Massachusetts.
The Affordable Care Act aims to reduce medical debt by insuring more people, thereby easing the charity-care burden on hospitals, which will have fewer losses to pass onto paying customers.
The law puts limits on what nonprofit hospitals can do to collect debts and puts new restrictions on insurers, which can no longer deny coverage to the sick or charge them more. Insurers can’t impose lifetime caps on coverage, and they have to spend more of the premiums they collect on actual medical care.
"Health reform will probably succeed at reducing many of the large bills," said Rukavina. "But there will still be out-of-pocket costs that eat into people’s budgets."
Indeed, the pioneering reform law in Massachusetts upon which federal reform was built may have kept debt in check, but it hasn’t solved it.
A survey of Bay State residents who filed bankruptcy in 2009 showed 53 percent blamed medical bills, down slightly from 59 percent in 2007 when the law wasn’t yet fully implemented, a study in the American Journal of Medicine showed. But the difference wasn’t statistically significant, the authors said.
The Blue Cross Blue Shield of Massachusetts Foundation reported in a 2010 survey that 1 in 5 adults were carrying medical debt and paying it down — statistically the same as in 2006.
Authors of both surveys blamed the high cost of U.S. medical care, which is rising faster than wages and inflation. Feeling squeezed, insurers are passing more of those costs onto consumers in the form of higher premiums, deductibles, co-payments and co-insurance — practices that neither President Obama’s health care law nor Mitt Romney’s health plan will limit.
Data on how many bankruptcies in Utah are caused by medical debt are hard to come by.
But nearly 88 percent of a random sample of bankruptcy filings between 2003 and 2007 reported at least some medical debt, said Levi Pace, a doctoral candidate in economics at the University of Utah, who for his dissertation is researching the effects of changes to bankruptcy laws.
ObamaCare does not alleviate the problem of medical debt. Neither does RomneyCare. That is because no one is really talking about what causes the high cost of American medical care. And it isn't the lack of health insurance, which is why coverage initiatives like ObamnyCare do not solve this problem. Medical debt is due to the high cost of health care in the US which in turn is due to waste caused by poor quality care and inefficiency. Both kinds of waste are generated through the health insurance business model, which is why requiring people to buy health insurance does not reduce medical debt. Do we want families to be wiped out financially when their child has a congenital hip problem? Does that make any sense at all? Isn't it time to get rid of ObamnyCare in whatever format it is presented and instead just reduce the waste?
Dr. Joe Jarvis