We have a new name — RIP Medical Debt is now Undue Medical Debt.
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Insurance Alone is Not Enough

Undue Medical Debt

report from the Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE), shows that, thanks to the Inflation Reduction Act, the country made significant gains in health insurance coverage between 2019 and 2021 with the uninsured rate dropping to an all-time low in early 2023 at 7.7%. This is really good news — but is it enough? In a recent survey of Undue Medical Debt beneficiaries and Neighborhood Trust Financial Partners clients, we found that health insurance coverage for low- and moderate-income people is largely insufficient in shielding them from medical debt and the ancillary harms of medical debt, including financial and mental distress. The experience is succinctly explained by one respondent:

“Having medical debt comes with a lot of mental stress for me. It prevents me from saving money for myself and my family and for emergency situations. Even with health insurance, I don’t understand the high amount I have to pay out of pocket. It’s very frustrating and stressful to focus on my health.”

In our respective, initial briefs launched by Undue Medical Debt and our partner, Neighborhood Partners Financial Trust, we explore the interaction between having health insurance and one’s experiences with medical debt. These briefs provide some suggested actions for hospitals and employers, two key stakeholders in the medical debt ecosystem; the briefs are also a broader call out to government stakeholders to address high out of pocket costs for patients and workers that are a barrier to good health and financial well-being. As organizations that work closely with hospitals and employers, we are interested in identifying solutions that meet the needs of patients and our partners. Hospitals and employers are uniquely positioned to be leaders in mitigating the harm of medical debt and spotlighting the dysfunction of our nation’s healthcare financing system.

Some key findings from the two briefs include:

  • While nearly all respondents (90%) have some form of insurance, 68% also carry medical debt.
  • Of those with insurance, nearly one in three, 26%, paid for medical care in an unstable way (borrowing from family/friends or putting debt on a credit card)
  • 55% of people with medical debt deferred health care
  • 57% of people surveyed were unaware of hospital financial assistance programs designed to help low-income people with medical bills
  • Nearly half (48%) of employees surveyed struggled to understand their health insurance and more than one in three had similar issues with understanding medical bills they received

Having health insurance is critical to mitigating the harm of medical debt; however, too many people, particularly people living on lower incomes, are struggling with their medical bills. National stakeholders must collaborate to make insurance robust and affordable. At the same time, hospitals and employers can take steps in the short run to protect people from medical debt including revising their financial assistance policies and workflow while employers can take steps to ensure they are prorating premiums to keep workers healthy and also making sure that employees understand their health plan benefits. All recommendations can be found in the two briefs. The intractable problem of medical debt needs an all-hands-on deck approach that includes both short-term and long-term shifts in how medical debt is managed; we all need to roll up our sleeves and get to work.

Undue Medical Debt