Why Americans Are Drowning in Medical Debt

[eridani]

http://www.theatlantic.com/health/archive/2014/10/why-americans-are-drowning-in-medical-debt/381163/

After his recent herniated-disk surgery, Peter Drier was ready for the $56,000 hospital charge, the $4,300 anesthesiologist bill, and the $133,000 fee for orthopedist. All were either in-network under his insurance or had been previously negotiated. But as Elisabeth Rosenthal recently explained in her great New York Times piece, he wasn't quite prepared for a $117,000 bill from an “assistant surgeon"—an out-of-network doctor that the hospital tacked on at the last minute.

It's practices like these that contribute to Americans' widespread medical-debt woes. Roughly 40 percent of Americans owe collectors money for times they were sick. U.S. adults are likelier than those in other developed countries to struggle to pay their medical bills or to forgo care because of cost.
California patients paid more than $291,000 for the procedure, while those in Arkansas paid just $5,400.

Earlier this year, the financial-advice company NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. With a new report out today, the company dug into how, exactly, medical treatment leaves so many Americans broke.

Americans pay three times more for medical debt than they do for bank and credit-card debt combined, the report found. Nearly a fifth of us will hear from medical-debt collectors this year, and they'll gather $21 billion from us, collectively.

[Le Taz Hot]

1. This can't possibly be true

as we've been told time and again, the ACA makes all of our medical woes disappear. Except when they don't. There are MILLIONS falling through the cracks but too many of the BOG want to deny or ignore that fact. We can't even talk about it without being called "haters."

[spooky3]

3. To be fair, it's too early to assess the effects of ACA

On medical bankruptcies, because the provisions are still being phased in.

[Le Taz Hot]

6. While that may be true,

there are other HUGE problems with the ACA that can't be debated on DU without people accusing you of hating Obama. It's too bad because we need open, HONEST discussions in order to work to remedy those problems.

[spooky3]

32. I definitely agree that we need good, open debate.

[NYC_SKP]

59. Results are gonna vary, but my ACA covered over $500,000 in costs this year.

Now I had to fight them over a LOT of shit charges and am still fighting them over a $27,500 helicopter ride.

But this isn't new, this isn't ACA's fault.

Fair to say, ACA didn't exactly fix it but CoveredCalifornia was very helpful in my fighting with Athem Blue Cross to get my out of pocket down to what I was told it would be.

Most people wouldn't have known what to do.

I had an aneurism and brain surgery, then an infection and rehospitalization in May and June this year.

Much better now, but still having to fight.

[Le Taz Hot]

68. Right.

And those are the ONLY kind of stories that can be discussed on DU. If you have a different story, you're labeled an "Obama hater."

[Doctor_J]

69. it absolutely is the fault of the ACA.

The law deliberately left the insurance companies in the game. You should not have to fight to get your healthcare.

Good God, get over your crush on the president and start thinking for yourself.

[cynzke]

71. No, ACA is a law

that REGULATES insurance companies. Thats what its does. If you left out insurance companies it would be single-payer. ACA was passed to "FURTHER" regulate insurance companies not get rid of them. No one in Congress was willing to go for single-payer health care. Instead they chose to pass a law that leaves insurance companies in place but add some consumer protections.

[HereSince1628]

7. The discovery that ACA allows insurance to meet requirements but doesn't cover hospitalization

isn't particularly reassuring.

[ramapo]

21. Huh?

How/where does the ACA allow coverage that does not include hospitalization?

[Xithras]

35. The poster is correct.

The HHS requires employers who self-insure to offer plans that meet a "minimum value" threshold, and provides tools that allow them to tailor plans that just barely meet that minimum. As it turns out, if they offer a policy with very low deductibles, low copays, and a few other "optional" coverage's, they can meet the requirements WITHOUT offering hospitalization coverage...which tends to be the most expensive insurance feature for employers. Insurance companies are now starting to offer employers what they call "Minimum Value Plans" which just meet the bare minimums under the ACA and don't offer hospitalization coverage.

The real bonus for employers is that it can often cost absolutely nothing. Because the ACA simply requires that plans not exceed 9.5% of an employees wages, and because most of these minimum value plans only cost a couple hundred dollars a month, the employer can often pass on 100% of the healthcare cost to the employee. The only costs to the employer lay in the administrative overhead to manage the whole thing.

The employer satisfies the letter of the law, and the employee is stuck spending hundreds of dollars a month on shit insurance that won't offer a bit of help. Even worse, because the employer offers a legally compliant plan, the employees are also unable to buy better insurance on the exchange.

The ACA is what you get when you let insurance industry hacks drive health reform. Nobody should be surprised to find these kinds of loopholes.

[progressoid]

12. Now, now. To be fair, many have finally agreed that ACA is just a start.

Because any day now, the for-profit medical corporations are going to let politicians pass medicare for all.

Any day now.

[raouldukelives]

33. It's coming! Just make sure to keep investing in health insurance corporations.

They will use the money made from gouging people facing pain and death to achieve single payer. And if they don't, well, at least you get a little taste of the blood money.

[ballyhoo]

25. ACA was just another bill of goods arranged by a group

of men in a secret room.

[yeoman6987]

38. You typed first!

I am not sure I believe any of these stories. I think they are made up by Republicans to bash ACA. I know of nobody who is suffering under ACA. These stories are lies. Don't fall for them.

[Le Taz Hot]

48. I'm one of the millions who fall through the cracks.

What is it that you don't believe?

[cynzke]

70. NO, Not a lie.

And this is not new. It happened prior to the passage of ACA and will continue because ACA regulates insurance NOT hospitals/health care. The hospital/surgeon makes decisions on who will perform procedures. The insurance companies set up their networks of health care providers, but neither the insurance companies nor ACA have control over the hospital. If a doctor or surgeon is called in for a consultation or procedure, the insurance company can deny covering the fee if that doctor is not in their network. The bill goes directly to the patient to pay. So, there is a gap between the ACA law and laws that regulate hospitals. Should ACA be amended requiring insurance companies to cover ALL fees including those from outside their networks if medically necessary or should (state) laws that regulate hospitals require them to co-ordinate their procedures with the patient's insurance plan and use only doctors, surgeons, etc. in the insurance company approved networks? It is a gap that existed before ACA and still does, despite ACA. But consider this practice by the doctor calling in a colleague to help perform surgery. Is it really required or are they just helping boost each others income? You scratch my back and I'll scratch yours, wink, wink! Seems to me this is ripe for abuse.

[pipoman]

2. There should be no contractual discounting of

Medical care. The lowest price charged for a given procedure should be the maximum charged to any self pay patient. Why should Blue Cross pay $90 for a $600 bill, and a self payor have to pay the $600? It should be criminal.

[napi21]

53. My doc offers the same rate to a self pay patient that is agreed to for ins. co's and medicare.

I know because it was offered to me! I didn't even ask, he offered.

[Skittles]

4. it is legalized extortion is what it is

[AlbertCat]

23. it is legalized extortion is what it is

ALL insurance is legalized extortion. Insurance companies should be non=profit.


And the ACA is not health care reform.... it is health care insurance reform.

[littlemissmartypants]

26. Bingo . nt

[raven mad]

43. +1000

I had to be medevaced to Anchorage as our local hospital and doctors had no clue what was wrong. The bill for the plane flight was $12,000. One way, less than 400 miles. The expertise of the medical professionals on board was not at all in question; they were great.

My insurance covered $158.90.

We filed for bankruptcy a year later; husband had a heart attack (yes, medevaced again), plus my ongoing care.

[LibDemAlways]

60. That is criminal, but not unusual. A relative of mine

recently took a $2800.00 ambuance ride of less than 20 miles. I am currently paying it down slowly as my relative cannot afford it.

ACA means very litte as long as insurance companies get away with paying as little as possible and continuing to stick the consumer with big bills.

[cynzke]

74. People Have NO CLUE!

What a phoney racket insurance is. You have this great piece of paper, then when you incur serious medical expenses, you discover that insurance policy is like trying to cover yourself in a hurricane with a paper napkin.

[AlbertCat]

77. It's not just the big stuff either

I understand why health care is so expensive..... new complex technologies that have to run by many high trained skilled professionals. I get that.


But... por ejemplo: I burned myself and had to be run to the Medac on the corner. The whole thing cost like $700 or so. Of course the Ins. company would not pay a dime. I've been paying in for years....hundreds of thousands of dollars! They should have just given me $700 no questions asked!!!

[LongTomH]

50. + a zillion!

I'm tempted to say that ACA 'is a start;' but, the fact is, we need to start all over again!

I'm not cynical about the possibilities of seeing single payer in the US; but, it's going to take time, and we need to address the issue of money in politics, really address it.

[840high]

61. ...^ that

[mrdmk]

62. Actually it is much worst than that

It is a hedge-fund!!!

There, I said it...

[cynzke]

73. Can't Be Said Enough.

Why there is so much confusion and subsequent argument. ACA regulates health insurance. It added a layer of MINIMUM consumer protections to health insurance plans. HEALTH INSURANCE, not health care. But agree totally about legalized extortion. Do insurance companies actually give you health care? No! They are there to pay your bills for you with the money you gave them. Instead, they do everything in their power to deny or delay your access to any health care that cuts into their profits. WE DON'T NEED insurance companies. They only provide one thing....A TOLL BOOTH. Its disgraceful that Congress left these vultures in place.

[AlbertCat]

78. Do insurance companies actually give you health care? No!

Indeed. They just crunch numbers.
Conservatives were so worried about the elimination of health insurance companies and it's effect on the economy if single payer was implemented.

Bah! Those insurance companies can just crunch numbers for something else.... it doesn't matter what. They needn't go under or shed employees.

I remember getting some flyer for insurance to supplement your health insurance if the bill was too high and they weren't paying...

Yes... Insurance insurance!!!

[seabeckind]

5. The industry has worked out procedures to guarantee maximum return

Every industry that has consumers.

Every consumer, whether that's a commoner or another supplier.

Anecdote (plural of that is data): Periodically I need a diagnostic blood test. The procedure is that I should know when that is necessary but oftentimes the doctor tells me it's time (heh, heh).

The doctor writes an order (bills the insurance company, I get a copay).

The blood test is in the doctor's office with a subcontractor. Draw (bills the insurance company, I get a copay).

The test is done using a machine and it spits out the result and sub reads it. (bills the insurance company, I get a copay).

Sub sends a copy to the doctor. Doctor looks at it (bills the insurance company, I get a copay).

Doctor's staff updates my records, posts an entry on my record, tells me to look at it.

End of billing except for kickbacks to medical records industry. Krugman had a column a while back about that scam.

Long ago (15 years) the test (A1C) was done in the office with a thumb prick and shoved in the reader. Even the local drug store did it. Now it's a full draw, 2 vials.

[brer cat]

10. Your experience is odd to me.

My annual blood test is done while I see my PA for a checkup so there is one co-pay for the checkup, nothing extra for the draw, nothing billed for an "order". The blood is sent out to a lab so there is an additional charge for the lab. The results are sent to my PA who gives me a phone call to tell me everything is ok, no charge for that. I have in the past seen doctors with the same procedure. You either need a new doctor or need to discuss the billing with him/her. That is pretty outrageous, and your experience is good anecdotal evidence of why some medical bills are ridiculously high.

[seabeckind]

18. The area has 3 medical networks.

While there are some independent doctors, most belong to a consortium, a health "network". In effect the doctors are employees of the network. The network controls most access to healthcare, including rehab facities, etc. They have bought out the community hospitals.

That wasn't true where I used to live but the Franciscan health group was trying to move in and take over the local independent hospital and buy out the small doctor group.

As I said, this maximizing of profits thru procedures is across industries. When I moved across country using United, the company divested the drivers and they are considered independent contractors, hire their own loaders, then bill the company. In effect, their procedures increase the cost to the customer and squeeze the "employees" and then they rake off the profit.

A true competitive model would correct this but there is no competition. In the case of the health networks, they all work exactly the same. Instead of fighting among themselves for pieces of the cow, they decided that each would get half. The competitor has to be satisfied with the part that falls off.

[drray23]

55. yes same for me

I have the same experience you have. I just pay one copay for the checkup whether or not there is blood work.
The doctor also does not charge me to look at it and tell me if everything is good or not.

[cynzke]

76. Kaiser Medicare Advantage Plan

I expect my husband to live to be 300 with all the treatment he gets. He is a regular human guinea pig for Kaiser. It is to the point of ridiculousness. They have him coming in two to three times a month for different procedures and while it is suppose to be for wellness/maintenance, you know they are milking the system for profit. Just mention one little ache or pain and they will line you up for ex-rays, blood work, bone density tests, you name it, they will order it. Give them an inch and Kaiser will find a procedure for it.

[marym625]

8. K&R!!

I just love your posts. I would say more but I am too tired to deal with the people who live blindly to some things.

[deafskeptic]

9. even medicare won't cover all the costs.

It has a 20% deductible under plan b. For example, a diabetic with some fairly serious complications could end up in an extended stay in the hospital and rehabilitative services and and up with a 100,000 bill with 80% covered under part B. However, you will have to co pay 20k. That's difficult for low income people.

[brer cat]

11. Good point about the deductible,

but I would add that even "middle" income people have problems with that. 20k is a lot to pay.

[redstatebluegirl]

13. This happened to me, not as much money but enough.

I was never told there would be three surgeons in the room during my back surgery until the bill came. My insurance refused to pay the third one, I argued for months and months. I had to pay it while I argued so my credit wasn't ruined. I finally won the battle, I think I wore them down after a while. I kept everything so I had all of the documents I had signed. It was $12,000, a lot of money to us.

They do this to increase the income in these large medical practices. All three of the surgeons were from the same practice.

We can't fix the cost of medical care until we address things like this.

[yeoman6987]

39. We're you refunded the money you did pay?

Did you pay monthly? 12K is a lot of money.

[redstatebluegirl]

46. Yes, it took 6 weeks

After the doctor agreed i had not approved this extra doctor. They refunded the insurance company too. It yook over a year total. We used two credit cards to pay it initially.

[vanlassie]

56. I think often these "assistant" doctors are in training,

and getting experience on your/our dime. I saw this when I worked for a major health insurance company. Many second assistant surgeons were subsequently denied, but I'm sure they billed just in case they could score a payment from someone.

[cynzke]

75. You have to ask yourself...

are these assistants REALLY needed in all cases or are some of these doctors abusing the situation, taking advantage to increase their income? Are they mutually helping a colleague, returning a favor to pad their wallets....I call you in to assist, you call me in......we make extra money and either the insurance company or the patient get the check! I think this may be the case in many circumstances.

[progressoid]

14. I look a lot like that chart.

But with more mortgage debt.

[bigwillq]

15. The health care and health insurance industry is still a disaster

K and R

ACA has done nothing to eliminate issues like this. It's a very flawed law.

[littlemissmartypants]

17. Agreed, it is exceptionally flawed.

It is just a matter of time before the commercial insurance companies decipher it and hatch the plan to exploit it's flaws in every way possible. I saw this cannibalistic behavior when BBA and PPS was rolled out during the Clinton administration.

Hospital staff members were sent to seminars to learn how to use CPT codes, with combined ICD codes, to maximize profits when billing payments.

Until we control for cost and bill for patient care and NOT for profit, the system remains deeply flawed.

I am hugely disappointed with ACA. It's like a band-aid on a gaping bleeding wound, as far as I am concerned.

Love, Peace and the Righteous Fight.
~ littlemissmartypants 🙇

[bigwillq]

24. Not-for-profit

is the way to go.

[Enthusiast]

16. Kicked and recommended a whole bunch!

We have got to transition to a non-profit single payer system.

We must ask our Democratic candidates and office holders, "Ultimately, do you favor transitioning to a not for profit single payer system?"

If they do not favor this we should know which ones do not and why. We already know they have no good answers if they favor the status quo.

[seabeckind]

19. I don't think that would solve the problem

unless the oversight would include insistence on savings procedures.

In my anecdotal above I have no idea whether Medicare would have an effect on the billing procedures. I doubt if it would cause each step in the process can justify itself. It's only when you take the 30,000 foot view that the extra costs become glaring.

Or you're the one who gets the bill. And in that case you're just the meat being divided.

I think the solution is a true competitive model. Force the consortium to compete. Use anti-trust to prevent them from becoming too large. Squeeze the doctor to make him reduce his cost to the consumer.

[Enthusiast]

47. All the existing single payer systems come in with a wonderful savings

advantage over the US profit driven system. And they are all more effective at Health Care.

The only way it isn't an enormous improvement over the US status quo is if we give the insurance industry a hand in crafting it.

[KansDem]

20. $117,000 for an “assistant surgeon?"

For this one gig?

Nice work if you can get it...

[CTyankee]

22. Perhaps a highly skilled specialist in a rare aspect of the surgery being performed?

but s/he would have to be pretty damned spectacular for that kind of money...

[WillowTree]

27. Just a hint for any here who run into a situation such as this.

I used to work for a medical billing company. When situations arose where one of the patients that we were billing for utilized an "in network" hospital but were being billed for an out-of-network provider that they had no control over, such as a radiologist who reads x-rays from that facility or an anesthesiologist or assistant surgeon (which, by the way, is often necessary, even though the patient never sees this physician or knows anything about her/him until the bill arrives), if the patient contacts the provider and explains the situation, I never saw in instance where the provider did not agree to accept the "in network" payment amount. Occasionally, it was also necessary to contact the insurer and explain the situation to them, but then they always agreed to pay the provider, but at the "in network" schedule amount.

Yes, it can be a hassle and yes, it ought not to be necessary to jump through said hoops, but it could save you a pile of cash, so I thought I'd throw that out there on the off chance it might help someone here out.

[Egnever]

45. Good info. Thank you!

[CrispyQ]

28. Health and education - two of the many things I think government should provide for it's citizens.

But we'll never get that in our everything-for-profit model.

[seabeyond]

29. i have been going ot this urgent care. with whole family.. get an xray and a month later a bill,

of $20. cause someone else, somewhere else did a read. well after the fact. checked, fixed, healed. he glances at an xray supposedly. i did not approve. i am damn tired of it. paid one after 2 yrs. have one or two sittin to be paid. and you know. i really really do not want to give this ass 20 for nothing. i really really resent the fuck out of it.

thanks for this article. i read it early. and i have been thinking about this since. appreciate.

[WillowTree]

31. What would be the point.......

.......of having an x-ray taken if no doctor read it?

[seabeyond]

34. a doctor, that we are seeing, that takes care of the issue, reads it and then

does what she needs to do. then, a month later, i get a bill for a second opinion. fuck that. the incident well over. and this man in another city, an hour away is supposedly looking at the same xray. no.

[WillowTree]

40. Your x-rays have almost always been read by a radiologist.......for the last 40 years or more.

It used to be that, in many instances, the bill from the hospital or radiology lab that took the x-ray would include the fee for the radiologist, who would be reimbused by the facility. Medicare, however, insists that the facility fee (for the room, equipment and technician who takes the x-ray) be billed separately from the radiologist's fee. That's why you're seeing a separate bill now.

The issue of "another city, an hour away" could be a matter of the images being forwarded digitally to the radiologist with whom the facility contracts (making distance irrelevant), or, more likely, the remote address is that of the billing company which provides billing and collections for the radiologist, who may or may not be local.

But if you're committed to believing that the radiologist is billing when s/he has provided no integral service, have at it. Doesn't change the facts.

[seabeyond]

41. Wow willow. I was appreciating the info until the unwarranted snark at the end

[No Vested Interest]

65. I understand that many x-rays are read by radiologists in India,

transmitted digitally.
Certainly, they are paid less than radiologists in the US.
I would imagine they are contracted by US firms, billed by US firms, and the patient would be none the wiser.

Anyone have experience or solid information re out-sourcing of X-ray interpretations?

[Initech]

30. We've become a nation of debt slavery.

That's 149 years of progress since the Civil War. Well done Republicans!

[uppityperson]

36. I am still paying off debt from the 2013/2012 insurance premiums.

Yes, I went into debt to pay those premiums. Another year and I should have them paid off. I am very happy to have the insurance under the ACA that I have so I do not have to go further into debt playing the health care insurance gambling game.

[FiveGoodMen]

37. So the investor class can get richer.

There are lots of important details about HOW it works, but that's WHY.

[Dirty Socialist]

54. Exactly

Medical profiteers are as bad as war profiteers.

[GummyBearz]

42. Grrr

On top of this (which makes me sick to my stomach) is the fact that I was a lucky person, who had great insurance before ACA, and the ACA actually degraded the insurance offered to me, as well as increased my bill for the crappier insurance. The system (meaning big insurance) is so damn wretched at every turn of the corner.

I do applaud a few things, like coverage for an existing health problem, but I expected better than a compromise between something "normal" and something "absolutely evil".

[ballyhoo]

44. You got it. Wait until the premium increases

hit next year. I hope to God (is that expression still permissible?) that folks like you will be afforded some kind of relief next year. There is something going on in California right now that may be commensurate to a 3rd party compromise to ACA and former insurances people held, but I haven't DDed yet so I won't say more. Good luck to you.

[KamaAina]

49. 'Cause we don't have single-payer?

[Louisiana1976]

51. America needs single payer. That's the only solution to the problem of medical debt.

[pnwmom]

52. I was worried about the issue of out-of-network, though I didn't realize that most ER physicians

would be out of network -- and that should be changed, by law. In fact, there are two states that require every facility and its physicians to be in-network. (I think Maryland is one and don't recall the other.) We should adopt the same law.

In the meantime, when my son had to choose an insurance policy, I told him to choose the one with his doctor that had the best out of network coverage. There was one that had a $12,000 limit on out of network (as opposed to no limit for the others), so that's what he went with. So he might be better covered than we are, with our group insurance.

[Gormy Cuss]

57. A patient should NEVER be subject to out-of-network charges after the fact.

No one in an ER should be out-of-network if the hospital is in-network, period. A patient in crisis shouldn't have to worry about random big ticket out-of-pocket expenses.

Managed care networks need to go away. It's an idea that doesn't work anymore. The old indemnity plans were better than this.

[pnwmom]

58. I agree. And if I'm ever consciously admitted to the hospital,

I'm going to add something to the contract. "In-network providers only; and out-of-network providers with my specific authorization."

Can't hurt.

[99th_Monkey]

63. Make that "medical debt AND EDUCATION DEBT

two things that most civilized nations provide FOR FUCKING FREE (or nearly so) to their citizens.

[woo me with science]

64. +100000

[liberalhistorian]

80. Amen to that!

Something is going to have to be done about student loan debt, the same as medical debt. We simply cannot continue effectively as a nation with our people weighted down with trillions of dollars of student debt. Period. Curse everyone who lobbied for and voted for that damn bankruptcy "deform" bill that changed the law from allowing student loans to be discharged to NEVER allowing them to be discharged. BAH.

[liberalhistorian]

66. The only good thing about this disgusting

mess is that FICO no longer includes or considers medical debt when calculating credit scores, something I've advocated for many years. It doesn't mean you don't still owe it or the medical debt collectrolls can't still harass you for payment for it, but you no longer have to worry about your credit being ruined if you get sick or injured and can't pay the bills. And I still can't believe there were people here who thought this was just a terrible thing, and people should continue to be financially ruined and punished for the "crime of getting sick or injured, when this was first announced a few months ago.

[LAGC]

72. Is it really completely excluded though?

I thought I read somewhere that it just wasn't given as much weight (insofar as FICO calculations go) anymore, but still shows up on your credit report which future lenders can see.

Does medical debt ever even drop off your record after 7 years like defaulted credit card debt does? I only ask because I honestly don't know.

[liberalhistorian]

79. It still shows up on your credit report, but

FFICO does not give it any weight in calculating credit scores, which is a huge step in the right direction. In many places, credit scores matter more than what is on your report. That is not to say that some lenders/landlords/employers/insurance companies and others whose money props up the fraudulent private credit reporting and scoring industry do not give the medical debt a lot of weight, but, frankly, many don't as they recognize that it is not a measure of your financial responsibility and reliability as much as, say, not paying rent or running up and then not paying credit card bills, etc.

It doesn't mean you're not still responsible for the debt and that you cannot be pursued for it. And yes, all debts fall off the credit report after seven years, unless a collectroll agency has "re-aged" it, which is illegal. The only exceptions to the seven-year-rule are bankruptcies, which stay on the report for ten years, and court judgments, which can be renewed several times if left unpaid. The Fair Credit Reporting Act and the Fair Debt Collection Act gives this information in more detail.

Personally, I don't believe medical debt should be permitted on credit reports AT ALL, period, not as long as we have a for-profit, insurance-driven health care system. But you've got to start somewhere, and the FICO announcement is a step in the right direction.

[flamingdem]

67. Why did they tack on the assistant surgeon without clearing the insurance issue?

That sounds like a fuckup and they'll have to pay for it.

I wouldn't throw ACA out with the bathwater.

This example seems hinkey