Medical debt is still a uniquely American problem.
An estimated 17.8% of Americans had medical debt in collections by June 2020, according to a survey by the Journal of the American Medical Association (JAMA), which analyzed consumer credit reports between January 2009 and June 2020.
The average debt amount was $429, with states in the South seeing the highest amount and states in the Northeast the lowest. The expansion of Medicaid also played a major role: States that didn’t adopt the expansion saw higher amounts in collections.
Yahoo Finance spoke to several Americans who talked about how medical debt has affected their lives.
‘I hyperventilated every time I tried to pay the bills’
Diane F. of Maine saw her biggest financial problems come from her and her family’s prescription medications, which were paid for by credit card.
She estimated that their debt amounted to $15,000, telling Yahoo Finance that “all the credit card charges for our prescriptions” were the main source of stress (as opposed to medical bills themselves).
Diane takes three different recipes, while her husband takes two. The highest price they paid for it was over $1,200.
“I have always strived very hard to keep my credit rating as high as possible,” she said. “Four or five years ago I would hyperventilate every time I tried to pay the bills. You see, medications cost my husband and I anywhere up to $1,300 for some of our prescriptions.
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Through her job, Diane signed up for an insurance plan “with a very high deductible”. Two of her medications are venlafaxine, which is free, and bupropion, which costs $64.80 for a 3-month supply. Her third drug, Latuda, cost her $398 for the first month and now costs $198 a month.
Latuda has a rebate program, but, she explained, once you take a government-sponsored program like Medicare, that rebate program is no longer in effect. When Diane turned 65, she couldn’t afford her meds because her discount “went out the door.”
“For example, a doctor played Russian roulette with my medicine for a year to find something that would work,” she said. “We never did.”
“In other words, for us ‘seniors,’ our mental health is not important,” she added. “A lot of the drugs that would help depression get expensive when you start taking Medicare. They have discount cards as long as you don’t have any government insurance.”
Despite these difficulties, Diane was still able to keep her credit score above 800 by paying bills first and then using the rest of her money for essentials like groceries and gas.
She gained just enough to make the minimum payments for both the medicines and the mortgage.
But “the minimal credit card fees were overwhelming for us,” she said.
“I almost had a breakdown every week trying to pay the bills,” Diane said. “We were maybe 5-6 years away from paying off our mortgage, but with the credit card bills, car loans, and overheads, it became nearly impossible. We ended up refinancing our mortgage to combine our credit card debt that was significantly over $10,000. lightened some of the burden.”
This year, Diane changed her insurance to a Humana Advantage plan, and although she described the cost as “outrageous,” she was able to go back to Latuda. Her first month cost her $400 before the price dropped.
“It’s terrible, but my husband and I thought it was necessary for my mental health,” she said.
‘I am not alone’
Doug, a New Jersey man, needed a biopsy, which later confirmed he had cancer. He was treated in a network hospital by a network anesthesiologist.
His procedure took place on November 15, 2019, and the collections began in July 2020. Still, the anesthesiologist still billed him about $2,500.
One of the many ways Americans are financially vulnerable to the U.S. health care system is through “surprise billing,” a type of billing where an in-network patient receives care provided by an out-of-network provider without the patient knowing. (Balance billing occurs when a patient’s insurance doesn’t cover full healthcare costs.)
“My insurance company wrote me a letter after they failed to resolve the matter saying I was being billed illegally, but they were off their hands,” Doug said. “Since then I have been approached by collection agencies and lawyers who are trying to collect this ‘debt’. I don’t know if this will ultimately affect my creditworthiness.”
According to Credit Karma data provided to Yahoo Finance, approximately 21 million Americans had $46 billion in medical debt in April 2021. collections — meaning that a third-party collection agency is trying to obtain the money owed.
“When I was diagnosed with cancer, I had a lot of medical bills and I had reached my ‘maximum co-payment’ for my insurance,” Doug said. “It was a rude awakening to learn that this means nothing when it comes to a provider making your balance bills.”
The bill is $1,406.22 and although Doug can afford to pay it,” after talking to my wife about it, we decided it was worth a potential blow to our credit not to give in to these guys .”
Doug took numerous steps to resolve the matter, including: partnering with his insurance company; respond to collection letters requesting verification of debt; filing complaints with the NJ Board of Medical Examiners, the Morristown Medical Center, the Joint Commission, and the Better Business Bureau; and contact members of the media.
“New Jersey’s ‘comprehensive’ protections have not protected me,” Doug said. “I’ve contacted everyone I could think of to complain about this, but my complaints fell on deaf ears.”
And, he added, the Google reviews for his anesthesiologist are “telling.”
“I’m not alone,” he said, “alone without a story.”
A routine test has gone wrong
In February 2021, Patty E. visited her doctor for a routine colonoscopy. Prior to the appointment, she confirmed that the office accepted her insurance.
But a few weeks after her procedure, she received a bill for more than $800 from the doctor and a bill for more than $6,700 from the place where it was performed.
“Apparently the doctor wasn’t on the network and my plan doesn’t cover anything if I go off the network,” Patty said. “When I called the doctor’s office they told me they didn’t know they hadn’t taken out my insurance until they got my bill back from the insurance company. They admitted it was a mistake on their part.”
Despite the mistake, the hospital is still billing her for the full amount, though Patty stressed that she “would never have knowingly agreed to nearly $8,000” for a procedure that is typically 100% covered.
“Why didn’t anyone tell me they didn’t get my insurance?” said Patty. “There must be a better way to identify valid insurance other than after the fact when the patient is stuck with the bill.”
Adriana Belmonte is a reporter and editor on politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at email@example.com.