Collection agencies attempt to collect medical debt
Medical debt in the United States is bigger than any government department, with collection agencies trying to collect debts totaling some $ 140 billion, The New York Times reported Tuesday July 20, citing a new JAMA study.
Health care debt is now the largest source of U.S. debt for collection, and largely aligns with states that did not participate in the Affordable Care Act’s Medicaid expansion program. The total arrears are almost double what officials thought. In 2016, the total medical debt held by consumers was $ 81 billion, according to a previous JAMA study.
“If you think of Americans who get phone calls, letters and knocking on the door from debt collectors, it’s most often because of the American health care system,” Neale Mahoney told NYT, the principal author of the JAMA newspaper. Mahoney is also a health economist at Stanford University.
This latest study takes an in-depth look at the information about the 18% of Americans with overdue medical expenses and also includes people without a bank account or credit card. The figures were taken from 10% of all credit reports from the credit rating agency TransUnion, according to the outlet.
Unpaid medical debts were the main source of unpaid bills Americans held that were owed to collection agencies from 2009 to 2020.
The total debt of $ 140 billion does not measure the actual amounts owed to health care providers, as it only takes into account debt owed to collection companies. The growing number of lawsuits brought by hospitals to collect debts is also not included, which can lead to salary garnishments that often include legal fees. Medical bills paid with credit cards and direct installment payments are also not included, according to the NYT, nor data from the COVID-19 pandemic.
Previous research has shown that states participating in the Medicaid Expansion Program were less likely to have people buried under medical debt. Growing states offer low-income adults medical coverage without overhead for premiums and deductibles.
PYMNTS research showed that fraud cost health insurers nearly 12% of their annual revenues. American health insurance companies must keep their shareholders happy and instruct employers and corporate workers to prevent rate hikes.
The June Healthcare Payments Innovation Handbook by PYMNTS, produced in collaboration with Rectangle Health, found that nearly 21 percent of respondents paid the full cost of their last medical visit out of pocket.