MEDICAL DEBT FACT SHEET

Of Households Currently In Medical Debt:

43% 62% 43% Delayed or did not fill a Did not see a doctor for a Did not get a recommended prescription. medical problem. test or medical treatment.

Source: The Burden of Medical Debt: Results from the Kaiser Family Foundation/NY Times Medical Bills Survey, Jan 5 2016.

Background

Millions of people in the US each year are at risk for losing their health, homes, credit standing, and financial security because of the harms of medical debt. A widespread and growing problem, medical debt currently affects 1 in 4 individuals regardless of age, income, insurance status or ethnicity1. Unlike regular consumer debt, which is often incurred in a voluntary and predictable manner (such as in buying a car), a serious illness diagnosis or other medical emergency is unplanned, can strike at any time, and leaves families little room to anticipate and prepare for the unexpected costs of treatments or potential reduction in the patient's or caregiver's ability to work and maintain steady income.

Credit evaluators and other private organizations have confirmed that medical bills are often reported to credit reporting agencies in error2, forcing patients and families to try and fix a billing problem that occurred through no fault of their own. Even in cases where a medical bill has been paid in full or otherwise resolved, the recorded debt may remain on credit reports and negatively affect a patient's credit score for up to seven years.

Fortunately, the three major credit reporting agencies - Experian, Equifax and TransUnion - have recently responded to these concerns by instituting a 180-day waiting period before medical debt can be included on a consumer's credit report3. This reform is an important first step in giving consumers more time to resolve coverage or billing disputes with insurers, so they are not unfairly penalized in circumstances where they may delay making payments pending a resolution. Additional consumer protections for patients and families are still necessary, however, to minimize the impact of medical debt and its distressing consequences.

National Patient Advocate Foundation September 2017 The Issue The Solution

Patients will often cut corners in their own health care NPAF supports policies and practices that protect in an effort to maintain financial viability and avoid patients and families from the distressing harms of medical debt. CDC data show that adults will try medical debt, specifically to: numerous methods to lower their prescription drug 1. Promote fairness in credit rating and reporting costs, including not taking a prescribed medicine or practices by addressing the crippling manner that missing diagnostic tests4. Patients have reported being medical debt can follow patients for years, even after disapproved for loans or mortgages due to medical the debt has been settled. debts and, as a result, are unable to purchase a new car or home for their family. They also report inability to 2. Assess all patients for their financial support afford basic cost of living expenses. In a survey needs to help navigate to safety-net services. conducted by the Patient Advocate Foundation in 2015: 3. Increase cost transparency concerning patients’ • 42% of patients reported paying utility bills late. out-of-pocket cost-sharing requirements for medical • 39% reported they could not afford groceries. treatments, drug pricing, etc.

• 27% reported they have missed rent or mortgage 4. Enhance notification and support for payments. patients of their eligibility for charity care prior to sending medical debts to collections.

DID YOU KNOW?

Approximately 32 million Over 70 percent of those Over 20 percent of medical Americans report a lower with medical debt were bills are sent to collection in credit rating as a result of insured at the time care was error1. medical bills5. provided6.

1Gerety, R. “Healthcare Reform Leaves Widespread Medical Debt Largely Untouched.” Northwest Public Radio April 21, 2015. http://nwpr.org/post/ healthcare-reform-leaves-widespread-medical-debt-largely-untouched#disqus_thread 2 Silver-Greenberg, J. (2013, October 13). “Patients Mired in Costly Credit from Doctors.” The New York Times, p. A1 3 Andrews, M. (2017, July 11). “Your Credit Score Will Soon Get a Buffer from Medical Debt Wrecks.” Kaiser Health News. 4Cohen RA, Kirzinger WK, Gindi RM. Strategies used by adults to reduce their prescription drug costs. NCHS data brief, no 119. Hyattsville, MD: National Center for Health Statistics. 2013. 5 Collins et al. Insuring the Future, April 2013 6 Karpman, M, Long, S. (2015, May 21). “Most Adults With Medical Debt Had Health Insurance at the Time Debt was Incurred.” http://hrms.urban.org/ briefs/Most-Adults-with-Medical-Debt-Had-Health-Insurance-at-the-Time-the-Debt-Was-Incurred.html

ABOUT NATIONAL PATIENT ADVOCATE FOUNDATION

The National Patient Advocate Foundation, the advocacy affiliate of the Patient Advocate Foundation, represents patient voices, both the powerful stories of individuals and the collective needs of the community. Our staff and advocates work at the local, regional, and national level to promote equitable access to affordable, quality health care for people with serious and chronic illnesses. We are thought leaders in developing person-centered policies that promote communication, shared-decision making, quality care improvement, and safety-net services navigation National Patient Advocate Foundation September 2017 supporting quality of life for all patients and caregivers.