Medical Debt Overview

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According to data from NerdWallet, an estimated 56 million Americans have problems paying for medical debt. The ability to access health insurance is increasing with the Affordable Care Act, so many are left wondering why they struggle to afford their medical care.

The costs are often associated with ongoing confusion about insurance plans, individuals still not having insurance, high deductibles and high premiums for the insured. The costs of out of pocket medical care have become so immense that it is now the leading cause of personal bankruptcy and affects a large percentage of the American public.


Medical Debts

medical_billing_advocate-116Medical debt creates undue strain on American families. With medical costs continuing to rise, the insured, underinsured, and uninsured will all be affected. Not only do medical bills affect a household’s ability to pay for necessities, but they also limit the household’s ability to save money and produce high credit ratings.

NerdWallet found that of those 56 million Americans struggling to pay their bills, 17 million will see a reduction in their credit rating due to the debt, 16 million will use their savings to pay for their medical bills, 11 million will use a credit card to pay for their medical bills, and 10 million will be unable to pay for other necessities due to medical debts.

The problems associated with high debt have become so globalized that not even the insured are protected from financial stress related to medical debt. According to a survey conducted by the Henry J. Kaiser Family Foundation, an estimated 10 million insured Americans will struggle to pay their medical bills.

The data also revealed that in 2010, insured Americans with a family of four spent $20,000 on healthcare expenses. With a recovering damaged economy that has already resulted in lower savings for Americans, medical debt is truly an undue burden.

For the uninsured, they are often billed at higher rates than that of an insurance company and end up paying out of pocket for approximately 35% of their care, according to other data from the Henry J. Kaiser Family Foundation.

Because all providers, with the exception of the emergency room, can turn the uninsured away, patients often wait to see a physician until the problem has become more serious and complex, which will likely create additional high costs.


Associated Problems

Americans who are burdened by high debts often compromise their health to save money. NerdWallet data reported that 25 million people either avoid taking their prescriptions correctly or do not take it at all in an effort to save money.

In 2012, an additional 58% of people reported putting off care due to costs. By delaying care or not taking necessary preventative medications, any immediate savings are overshadowed by more costly services, such as emergency room visits, in the long run.


medical_billing_advocate-3Surprisingly large bills affect even people who do everything in their power to keep their medical costs down. 63% of Americans report being surprised by a large hospital bill, according to NerdWallet data.

For some of the insured who are struggling with medical debt, the high medical bills may be attributed to uncertainties regarding what their health insurance plan covers and what providers or facilities it may include. Many insured individuals who are struggling with medical debt have been billed for out of network care that they do not understand.

Hospitals employ physicians that are covered by a range of insurance options. So, just because one doctor at a hospital is in-network, it does not mean that all of the providers at the same hospital are considered in-network.

For example, if you are having a procedure done, the anesthesiologist may be out-of-network while the surgeon may be in-network. When a patient is preparing for a medical procedure, it is not always known to ask if a particular physician or provider is within the health insurance network.

Adding to the in-network/out-of-network confusion is the fact that hospitals’ and doctors’ fees vary greatly, depending on the provider. Recent studies have indicated that this variation can be 54 times higher than the charges for the same procedure at a different hospital.


Hospital Billing

Hospital bills often contain errors that uninformed people never notice nor question. Often, these incorrect medical bills can be adjusted to reflect only True and Accurate charges and Fair and Reasonable prices. It is not unusual for providers to erroneously double bill, bill non-billable charges or charge for out-of-network rates when the patient had no knowledge.

Understanding all of the medical bills you receive and requesting a detailed itemized statement can help you to check for errors in billing. Additionally, patients can access advocacy groups designed to help them find errors in billing.


Controlling Costs

One way to reduce anticipated medical costs is to shop around for care that is more affordable and utilize discount programs and other available means for savings. Such programs are prescription discount programs offered by pharmaceutical companies and discount options available for medical equipment such as glasses. Additionally, consumers can attempt to find the lowest quality care by researching different providers.


Problems with “Shopping Around” for Care

While it may make sense to shop around for the most affordable care, you may not always have this luxury. When a medical emergency happens, the patient has little control over where they receive care. Additionally, sometimes it is not geographically possible to find an in-network provider.

For those who call ahead to ask about pricing, they may be surprised to find out that each procedure does not have an easily determined sticker price. The price for the same procedure at different hospitals can vary depending on whether or not the patient is insured, whether the patient’s physician is an in-network provider, the amount of time the procedure takes, what resources are needed and numerous other variables.



medical-billing-advocate_159601586As opposed to waiting until you need treatment, a preventative approach to handling medical costs could be employed where needs are anticipated. Understanding the plan you have and knowing which local providers are in-network and out-of-network are essential to this planned approach.

Additionally, it can be helpful when traveling to call your insurance company ahead of time to find out where you can find covered emergency care if needed. There will always be situations you cannot prevent, such as needing ambulance transportation that brings you to an out-of-network provider; however, through research you can limit these events to the best of your ability.

The communication with your health insurance provider and the hospital prior to treatment for routine procedures and care can also help keep costs down. Ask the hospital to give you a list of all providers and physicians that will be associated with your care. Then, talk to your insurance company ahead of time to ensure all of them will be covered.

This might sound time-consuming, but it could result in vast savings. Discussing circumstances with the hospital in which another provider might assist in the procedure or service can also help you to make informed choices about which hospital you select.

Finding a provider that can assure you with 100% confidence, and in writing if at all possible, that the services are entirely in network can make going to a hospital that is slightly further away a more affordable option over a more local provider that is out of network.

As medical debt increases and hinges an undue burden, American families are filing for bankruptcy to relieve the pressure. Medical debt increases the financial burden of the insured, underinsured, and uninsured within the American household and is continually increasing as health costs rise.

It is important to exercise preventative measures to avoid the excessive, error laden billings that contribute to the rise in healthcare costs. Every patient has a right to True and Accurate charges and Fair and Reasonable billing.

Filed under: Obamacare, Resources, US Healthcare, Medical Debt, Hospital Bill Review, Consumer Section, Healthcare in Politics, Affordable Care Act

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