Medical Debt is Up – How to Deal

Medical debt is on the rise even as more Americans forego medical care because they can’t afford it, according to a study by Commonwealth Fund Commission, a private foundation, as reported by trade publication Insight on Accounts Receivable Management. According to a recent survey of consumers by the foundation, the number of adults saying they have problems paying medical debt rose from 34 percent in 2005 to 41 percent in 2007.

The survey found that 37 percent of American adults went without health care in 2007, the major reason being a lack of affordable insurance. Over 75 million adults were either underinsured or uninsured in 2007, a 33-percent increase since 2003.  Though the increase may at first appear to be a boon for creditors and collection agencies, which thrive on high fees generated by outstanding debts, people in the industry say that the economy is so bad that many people with high medical bills can’t afford to pay at all.

“We’ve got a lot of debt here but trying to collect it [is a challenge],” Joe Kozumplik, CEO of medical debt collector CBM Services, told Credit and Collections World.  CBM has seen medical debt rise 40 percent in the past year.

It’s no surprise people are finding they can’t afford to pay off their medical bills. In 2006, the cost of health care for the average family rose by seven percent, more than twice the growth rate of the rest of the economy, according to a Commonwealth Fund report, and that rate of growth is projected to remain high through 2017. Americans spend $12,680 on the average employer-based health care plan – twice as much as similar plans in other industrialized countries – and more than the average yearly earnings of a person working full-time for minimum wage.

“There is now an urgent need for a national solution that will provide families with affordable coverage options to ensure access to timely health care and provide protection against catastrophic financial losses,” Sara R. Collins, assistant vice president of the Commonwealth Fund, said in testimony to Congress in October.

Things you can do:
-    Get health insurance. We know it’s expensive. But right now, even a simple medical procedure could bankrupt the average worker if he or she has to pay out-of-pocket. Consider valuing health insurance over salary the next time you look for a job.
-    Don’t get sick if you can help it. Not to sound flippant, but if you smoke, stop. If you’re overweight, exercise and eat right. Following common-sense health guidelines now is an easy way to maintain your financial health.
-    Get involved. President-elect Obama and Senator Ted Kennedy have said that health care reform is among their top priorities. In the New Year, Congress will begin considering proposals for how to fix our broken system. No time like the present to get educated on the issue so you can start pestering elected leaders.

And last but not least, Credit.com has helpful advice on dealing with medical debt.

Comments

[Michelle Dunn]

This is a great post, really pointing out how the economy is affecting medical bills and debt. Thanks for the tips of things and actions we can all take to help with this type of situation. When ever we have a debt problem, we feel despair, so having a list of things "we can do" is always a great help.