The Cost of The Healthcare Crisis on Americans

That there is a healthcare crisis in America should be about as surprising to people as the sky being blue. Healthcare costs have been rising significantly while companies have been scaling back on their insurance coverage. That has left individuals left to bear the burden, and the cracks in their financial situations are beginning to deepen.

Look, for example, at information released recently by The Commonwealth Fund, which surveyed individuals earlier this year about their healthcare coverage. The number of individuals who have healthcare plans where the deductible is at least 5% of their income has doubled in the past decade, to 15% of the population. Forty-six percent of individuals had healthcare deductibles that were at least $1,000 in 2020, up from 22% in 2010.

In what is likely one of the more dramatic understatements in The Commonwealth Fund’s report is that individuals who do not have adequate healthcare coverage are more likely to have problems paying their medical bills. About 27% of individuals who are adequately insured had problems paying their medical bills, compared with 49% of individuals who have medical insurance, but are considered to be underinsured, and 52% of individuals who had no health insurance whatsoever.

One-quarter of individuals without medical insurance had been contacted by a third-party collection agency about an outstanding healthcare debt, according to the report. Accounts are placed with third-party agencies after the healthcare provider has been unsuccessful at attempting to collect on a debt. More than one-fifth of the survey’s respondents said they had to change their way of life so they could make payments on their medical bills.

Having to shell out more of their own money to cover their medical bills has left individuals with some real financial hardships. Forty percent of respondents said an unpaid medical bill has lowered their credit score, which could lead to higher interest rates when trying to get a mortgage, credit card, or car loan. More than one-third of the survey’s respondents said they have used up all of their savings to pay for medical treatments. And more than 25% said they are unable to pay for basic life necessities, like food, rent, and heat.

Collection agencies and healthcare providers would benefit from understanding the difficult financial position that many individuals are in, especially if they are carrying some amount of healthcare debt. Working with agencies that understand this dynamic and are able to collect effectively and empathetically can help providers recover much-needed funds to keep themselves open.