Insured and In Debt: The Catastrophic Unfairness of Medical Debt

2016-09-09 | Rebecca A. Kirch, JD

States have released premium data suggesting that the rates for many insurance plans are expected to increase significantly next year, much higher than prior increases in 2015 and 2016.

As I look at the coverage landscape now and looking ahead, I can’t help but think of what it all means for the patients we serve through the Patient Advocate Foundation (PAF).

We are a national organization that provides direct support services through case management for roughly 80,000 patients and caregivers across the country each year. Most have been diagnosed with a chronic, debilitating, or life-threatening disease. They call us to help tackle healthcare access barriers they can’t resolve on their own.

The majority of our patients are insured, but they picked their plan based on the monthly premium cost – not its benefit structure.

This is what seems like the catastrophic unfairness for those confronting medical crisis. They did the right thing getting health insurance to cushion the financial blow. But the information they most need to become savvy healthcare consumers in the marketplace isn’t even available.  Nor should we require that of people as a misplaced means for reducing overall healthcare spending – particularly when they are vulnerable, distressed, and need caring help to get them through a really tough and turbulent time.

Yet today, healthcare costs are being shifted to patients at the same time their plan choices and benefits are shrinking. The results can be absolutely devastating to their finances and their health outcomes – particularly looking ahead as charitable assistance programs and subsidies continue to shrink.

It makes me think of Janet Giddens, who shared her story at our spring Policy Consortium about what her husband’s cancer diagnosis did to their family.  They had insurance – he’d worked his whole life - but still they couldn’t make ends meet once daily radiation treatments got rolling and they were sidled with mounting medical bills, prescription costs, and the transportation expenses of getting back and forth to the cancer center for treatment.  They cut back on buying groceries, struggled to pay their mortgage, and were beyond relieved to get just a little gas money assistance as part of the help PAF supplied.

Our case managers see this situation a lot. Once people get sick, they often can’t afford the combination of paying premiums, deductibles, coinsurance, copays, and their living expenses. My colleague describes it as a kind of “killing by perpetual papercut” – it’s not the huge surgical bill that puts people under (though that gets them started on the slippery slope). It’s really the steady stream of premiums plus out of pocket costs on top of all their other bills that end up burying patients and their families in a deluge of receipts.

Today as we see networks shrink and balance bills grow, patients can no longer afford to use their insurance. So they might skip appointments, delay needed treatments, split pills to make them stretch longer, or sometimes, abandon treatment altogether. 

About one-third of our patients with employer-sponsored plans say their medical debt is extremely severe, and among patients with Marketplace insurance, 44% said their debt was extremely severe.

Paying the out of pocket costs for prescriptions, doctor visits and hospitalizations are the biggest concerns of our patients whether they had Marketplace insurance plans or commercial coverage. In addition, patients with bronze plans needed deductible assistance and patients with higher level plans needed assistance with their premiums. 

These and other rising costs we’ve heard about, including anticipated premium hikes, impose overwhelming financial burdens that impair patients’ ability to afford basic cost of living expenses – their utility bills, gas, food, and rent or mortgage payments. Of the more drastic effects of long term medical debt, about 15% of the patients we surveyed this past year were evicted from their home, had their home foreclosed, or were forced to sell.  

The suffering all these patients and families endure is almost unimaginable, and the price they pay is far too steep.

NPAF looks forward to working with interested stakeholders to develop and advance policy solutions that put us on a better course to providing equitable and affordable access to high quality healthcare for everyone.


Rebecca A. Kirch, J.D., is the Executive Vice President of Healthcare Quality and Value for NPAF. In this role, she provides strategic focus and leadership in bringing millions of patients and family voices to the forefront of national health care quality improvement efforts. As a leading policy expert and advocate in her field, Rebecca is dedicated to improving the quality of life and the quality of care for all adults, children and families confronting serious illness.

This blog post was modified from remarks Rebecca delivered at a Council for Affordable Health Care Coverage Briefing at the United States Senate.