While the Affordable Care Act made it possible for millions of people to have health coverage, that doesn't mean it's easy to deal with medical bills. Medical debt is the top reason consumers say they're contacted by collection agencies — and if the ACA goes away, taking people's coverage with it, the situation could get a lot worse.
Kaiser Health News writes in a report that 59 percent of people reporting contact from a debt collector say it is for medical services. The data, from a study by the Consumer Financial Protection Bureau, indicates the second most common reason for collection calls is overdue telecommunications bills (37 percent), followed by utilities, the third most common (28 percent).
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And it doesn't seem to matter how much people's income is; medical debt is pervasive in a range of income levels, credit scores and ages.
In 2015, a poll conducted by NPR, The Robert Wood Johnson Foundation and Harvard's T.H. Chan School of Public Health found that even people covered by health insurance say it's a struggle to pay their medical bills, with about 26 percent saying health care expenses harmed their family finances.
In the CFPB study, people were asked about experiences with debt collectors over the previous year.
While there were some state fair pricing laws passed prior to the ACA which restricted the pricing hospitals could charge uninsured patients — laws passed because of aggressive billing and collection practices by hospitals, which would set much higher fees for uninsured patients than for insured patients who were able to benefit from their health plans' negotiated discounts — the ACA made those state laws unnecessary.
But if the ACA goes, so do its protections against high medical debt. Under the ACA, nonprofit hospitals must, if they want to retain their nonprofit status, establish written policies for charity care as well as take other actions.
They must also determine whether patients are eligible under their policies, and provide charity care for eligible individuals. They must also limit how much uninsured patients are charged and restrict aggressive billing and collections activities.
Under those rules, nonprofit hospitals are also forbidden to launch "extraordinary collection actions," including reporting to credit bureaus, garnishing wages, placing a lien on property or taking legal action, until 120 days after the first billing statement is sent.
And it's not just the debt itself, nor the calls from collection agencies, that threatens consumers' financial well-being. The report says medical debt turned over to collections can also drop credit scores, thus endangering any efforts at obtaining other credit.
In the report, Mark Rukavina, a Boston-based health care consultant focusing on affordability and medical debt, was quoted saying, "It's not just that people may be reluctant to go for care because of the debt they might incur. It might also ruin their credit."
Repeal of the ACA would repeal its protections, unless Congress specifically retains them. And that could mean that many more people would be uninsured; according to a Congressional Budget Office estimate, one Republican plan advanced for repeal would leave 18 million people uninsured the first year; that figure would rise to 32 million in 2026.
Sara Collins, vice president of health care coverage and access at the Commonwealth Fund, whose biennial insurance surveys examine issues of medical debt and underinsurance, was quoted in the article saying, "Because more people would be uninsured, they'd be exposed to the full cost of their care and you'd very likely see the number of people who are carrying medical debt increase."
And that means there are likely to be a lot more people being called by collection agencies.
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