Medical Debt and it's Inequalities

Jenna Sakhleh - Teen Aspect - May 27th, 2022
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Medical debt refers to debt accumulated due to health care costs. According to the Stanford Institute for Economic Policy Research, medical debt is the number one source of debt collectors. It is estimated that the United States owes 195 million dollars in medical debt, roughly approximating 16 million people owe $1000 in medical debt. However, how does medical debt affect minority groups?

Data shows that minorities are expected to have more medical debt than the national average.


Unfortunately, those with disabilities or ailing health are predicted to endure a significant amount of medical debt than ordinary people. According to the Health System Tracker, charts show that 9% of white Americans have medical debt, yet 16% of Black Americans have medical debt, almost doubling the percentage of white Americans providing class, establishing an inequality among races. (Rae, 2022).


Rich vs. Poor


Regarding class differences, the lower and middle class typically struggle with medical debt more than the upper class. The lower class, specifically among ethnic minorities, is expected to be in student loan debt and credit card debt. Data shows that the lower class's annual medical debt rate falls significantly. Accumulation of debt brings down credit scores which have lasting effects such as difficulties obtaining a mortgage and overall financial stability among wealth gaps.

How Does a Medical Bill Turn into Medical Debt?

Hospitals are known for overcharging patients for every minor inconvenience. The Rybak family has dealt with these hidden payments sent via mail. After their son was suffering from withdrawal from opioids, the hospital did not prescribe him any medication but only provided referrals to help the Rybak family's son. After their son, unfortunately, passed away, medical bills were sent to the Rybak household for $4,928, not once, but on numerous accounts (Pattini, 2022). Most medical debt comes from the billing department itself, stemming from human errors mostly from understaffed workers delaying sending bills and accidentally replicating them.


Like any other bill, if left unpaid, it turns into debt with debt collectors targeting households by pressuring about the payments of medical bills. If left unpaid, land ownership and any property one may own are lost. If the medical debt is reported to the credit bureau, a person's credit score is reduced for seven years until unpaid. Civil lawsuits can be in place, resulting in long-term effects such as property seizures. Vital everyday services such as utilities, transportation, and overall consumer spending all stand to be affected by large-scale medical debt. The continuous build-up of medical debt deliberately hinders the ability of an average American to pursue basic economic freedom. For example, car loans can become unattainable due to poor credit scores, utility companies may require a larger security deposit, and standard Americans may lack the power to receive the necessary funds to purchase a home, all thanks to the disturbing consequences of intense medical debt.


How do we Overcome the Everlasting Effects of Medical Debt?

While medical debt is a current issue, current changes are being made to provide relief to families.

Recently, Kamala Harris announced her efforts to reduce medical debt. For example, Harris announced the efforts of significant credit bureaus to reduce the amount of debt that is labeled on credit reports to eliminate the consequences of medical debt to Americans. This efficiently reduces future burdens accumulated through medical debt by relieving pressure on credit scores. (Simmons-Duffin, 2022).

Additionally, the Department of Health and Human Services announced the No Surprise Act, which prevents surprising medical bills from being sent. Like the Rybak family, the No Surprise Act would protect ambulance services and allow Americans to have every bill documented. This guarantees federal protection to the American people and a concisely yet understandable document that patients will understand.

While current changes are being developed, many civilians are still struggling with the effects of medical debt. It is essential that people consistently advocate for change and avoid further complications. Discharging medical debt should be a necessary change among the lower and middle-class population.


References

"America's Medical Debt Is Much Worse Than We Think." Stanford Institute for Economic Policy Research (SIEPR), https://siepr.stanford.edu/news/americas-medical-debt-much-worse-we-think.

Melton, Courtnee. "Medical Debt 101: How a Medical Bill Becomes Medical Debt." The Sycamore Institute, 26 Feb. 2021, https://www.sycamoreinstitutetn.org/medical-debt-101/#:~:text=Key%20Takeaways,be%20reported%20to%20credit%20bureaus.

Medical Debt Burden in the United States. https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf.

Twitter, Matthew Rae, et al. "The Burden of Medical Debt in the United States." Peterson-KFF Health System Tracker, 23 Mar. 2022, https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/#:~:text=People%20with%20medical%20debt%20report,or%20taking%20on%20additional%20debts.

The Racial Health and Wealth Gaps - Nclc.org. https://www.nclc.org/images/pdf/medical-debt/RacialHealth-Rpt-2022.pdf.

"How to Solve the Medical Debt Crisis." The Lab by the Appeal, https://theappeal.org/the-lab/policy/how-to-solve-the-medical-debt-crisis/.

Aneri Pattani | KAISER HEALTH NEWS. "Never-Ending Costs: When Resolved Medical Bills Keep Popping Up." NPR, NPR, 6 Apr. 2022, https://www.npr.org/sections/health-shots/2022/04/06/1090313100/repeat-medical-bills.

Simmons-Duffin, Selena. "What the White House's Actions on Medical Debt Could Mean for Consumers." NPR, NPR, 14 Apr. 2022, https://www.npr.org/sections/health-shots/2022/04/14/1092740251/what-the-white-houses-actions-on-medical-debt-could-mean-for-consumers.


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