Uninsured

Below is guest post written by a friend of the Asset Building Program, Mark Rukavina. Mark runs The Access Project and is one of the country's leding experts on medical debt and its debilitating impacts. 

If you think it is implausible that co-payments for doctor or hospital visits could increase your mortgage interest rate, think again.  Medical bills, even those that have been paid in full, can and do ruin credit and increase the cost of loans.   

The reasons for this vary.   Healthcare costs, for some, are simply unaffordable and bills go unpaid.  Others are confused by their bills and allow them to go past the due date or be sent to a collection agency.  Studies have found that American patients often do not understand claims well enough to know why they owe the bill or if it is correct.  An American Medical Association study found that one of every five claims is inaccurately processed by health insurers. 

In 2010, thirty million Americans were contacted by collection agencies for unpaid medical bills.  Research published in the Federal Reserve Bulletin found that more than half of all collection accounts on credit reports are medical in nature. 

Total healthcare spending in America amounted to $2.6 trillion in 2010.  Of this total, $300 billion was paid out of pocket, for example through deductibles and co-payment fees.   Between 2009 and 2010, the growth in out-of-pocket spending accelerated as more people switched to higher deductible plans or increased co-payments in exchange for lower premium costs.  

As out-of-pocket healthcare costs increase, people are left wondering whether they or their insurer is supposed to pay the bill.   Understandably, providers want payment in exchange for their services.  When they do not receive prompt payments, they initiate action similar to other businesses and send the bills to collection.

It is a common misconception that medical debt cannot hurt your credit score.  Collection agencies typically report medical bills to the credit bureaus and view all collection accounts as delinquent.  They do so without regard for why the bills were sent to collection. With medical collections, many people pay off the balance promptly upon hearing from a collection agency.  They are frequently surprised to find that these accounts stay on their credit report and lower their score.

This is the fourth and final installment in a series of interviews with policy experts who participated in an event we hosted on November 22nd, "Poverty, Inequality, Mobility, Oh My," where we explored different ways of assessing how families are doing post-Great Recession and how applying these different approaches to the design of public policies might improve the conditions and opportunities of low-income families.

For Immediate Release - October 4: Recognizing the need to assist California residents struggling with medical debt, healthcare practitioners joined financial services providers and community groups last week to discuss how best to implement the Affordable Care Act and strategies for keeping Californians from acquiring medical debt.

LOS ANGELES – Recognizing the need to assist Los Angeles residents struggling with medical debt, healthcare practitioners today joined financial services providers and community groups to discuss how best to implement the Affordable Care Act in Los Angeles and strategies for keeping Angelenos out of debt. Speakers also highlighted options for those plagued by medical debt.

Tarnish on the Golden State, a new report issued by the New America Foundation, exposes how medical debt can lead to ill health and financial insecurity for individuals and families. Tens of millions of American families struggle to pay health insurance premiums and medical bills. In 2010, 44 million working aged American adults had medical debt or medical bills they were paying off over time. In California, over two million people had medical debt prior to the recession and the problem has likely become worse since then.

Over two million Californians have medical debt. These residents find it difficult to access needed health care or affordable credit. Medical debt and its consequences illustrate the detrimental effect of inadequate health insurance coverage. The financial stress resulting from unaffordable healthcare costs makes it harder for Californians to pay other bills. For Californians with medical debt, their physical, mental and financial health are at risk, as is their long term financial security.

Over two million Californians have medical debt. These residents find it difficult to access needed health care or affordable credit. Even with the passage of the Affordable Care Act, many East Bay residents will continue to struggle with medical debt that makes it harder for them to pay other bills and leads to financial and mental stress.

Over two million Californians have medical debt. These residents find it difficult to access needed health care or affordable credit. Even after the passage of the Affordable Care Act, an estimated 80% of farm workers, who are undocumented, will continue to struggle with being uninsured and accessing healthcare. This can lead to medical debt that makes it harder for them to pay other bills and leads to financial and mental stress. For residents with medical debt, both their physical and financial health are at risk.

Over two million Californians have medical debt. These residents find it difficult to access needed health care or affordable credit. Even with the passage of the Affordable Care Act, many Los Angeles residents will continue to struggle with medical debt that makes it harder for them to pay other bills and leads to financial and mental stress.

Almost two-thirds of the most economically vulnerable Californians, who are uninsured and in public programs, are people of color. Join New America's California Asset Building Program and the Latino Community Development Foundation for a summit exploring the challenges and opportunities that the implementation of the Affordable Care Act holds for underserved communities in California.