When medical bills lead to debt, financial hardship piles on top of sickness : Shots - Health News The U.S. health system now produces debt on a mass scale, a new investigation shows. Patients face gut-wrenching sacrifices.

Sick and struggling to pay, 100 million people in the U.S. live with medical debt

  • Download
  • <iframe src="https://www.npr.org/player/embed/1104679219/1105451267" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

A MARTINEZ, HOST:

More than a hundred million people in the U.S. are saddled with health care debt. In the past five years, more than half of all adults say they've gone into debt because of a medical or dental bill. A new investigation by Kaiser Health News and NPR finds the U.S. health care system produces debt on a massive scale, forcing families to make gut-wrenching sacrifices. Joining us now to talk about this is Noam Levey with Kaiser Health News.

All right, so tell us about this investigation and how you got to this awful number - a hundred million. I mean, that's a lot of people in debt.

NOAM LEVEY: It certainly is. I mean, I'm sure it's not a surprise to anyone that health care is really expensive in this country. And covering health for the last 15 years, I can't tell you the number of people I've met whose lives have been upended by medical bills. And that's why we wanted to better understand just how widespread this problem is, as well as what's causing it and what it's doing to people's lives.

So one of the things we did was conduct a nationwide poll with the polling team at KFF, the Kaiser Family Foundation. And we didn't want to just find out how many people had medical bills and collections. That's the usual way of measuring medical debt. We wanted to know about people using credit cards, payment plans and other loans. And what we found is pretty sobering, I think. About 50 million adults - 1 in 5 - are on a payment plan with a hospital or medical provider. These are the kind of installment plans that can weigh people down for years. One in 10 owe a family member or friend who covered their medical or dental bills. And 1 in 6 - that's about 42 million people - put a medical bill on a credit card they haven't been able to pay off, which, as you know, often means fees and interest get piled on top of what folks owe for health care.

MARTINEZ: Yeah. Now, I think I'm going to cringe before I ask this, Noam, but how much do people owe?

LEVEY: So some owe just a few hundred dollars. But we found about 1 in 4 owe at least $5,000, and 1 in 8 owe more than $10,000. And many of these folks - 18% of all people with medical debt - don't expect to ever pay it off.

MARTINEZ: And who has this debt? I mean, are we talking mainly about people who are uninsured?

LEVEY: Amazingly, no. There's no question that medical debt hits vulnerable Americans hardest. Lower-income households are more likely to have debt; so are the uninsured. But one of the remarkable aspects of health care debt in this country is how widespread it is. Even wealthier Americans can't escape it. We found that nearly half of adults in households making more than $90,000 a year have incurred health care debt in the last five years. And having insurance is no magic bullet either. Close to two-thirds of working-age adults with coverage have gone into debt.

These are people like Allyson Ward. She's a nurse practitioner in Chicago whom we interviewed for this project. Ally (ph) and her husband are solidly middle-class. They had health insurance when their twin boys were born 10 years ago. But the boys came early and had to spend months in the NICU, the neonatal intensive care unit. And one of the boys, Theo, had a blocked airway. It was a scary time. Here's Ally.

ALLYSON WARD: We didn't know what Theo's problem was. So I think we also had a lot of worry about what was going to happen to him. And he did stop breathing at home at one point. And I just threw him in the back of the car and turned up his oxygen and, you know, really didn't know - we didn't know that he was going to survive.

LEVEY: Then the bills started coming.

WARD: And then we started seeing bills that were, like, a few hundred dollars. And then we would get bills - I think we got a bill at one time that was around $12,000.

LEVEY: In the end, they got hit with about $80,000 in medical debt. They loaded up credit cards. They borrowed from relatives. Ally took on extra nursing shifts. We talked to lots of people like Ally all over America who found themselves in the same boat after an unexpected or serious illness.

MARTINEZ: All right. So let me get this straight. The sicker you are, the more likely you are to incur debt.

LEVEY: That's right. That's really one of the defining features of medical debt in America. You get sick in this country, and you're basically headed for debt. We worked with the Urban Institute in Washington to analyze which counties have the highest medical debt in the U.S. and why. And what we found is that the most powerful predictor of debt in a community is how sick the residents are. So places with the highest levels of chronic illness - diabetes, heart disease, cancer - they have the most debt. So on top of struggling with a life-threatening illness or an unexpected emergency, like premature twins, millions of Americans have to navigate the stress of going into debt. Here's Ally Ward again.

WARD: I mean, I think cruel is the word to describe it because no one should have to think, OK, well, what if I get sick with something that's completely out of my control, and I don't have a way to deal with my sickness without, in some ways, going completely bankrupt or affecting my financial health of our family for the rest of our lives?

MARTINEZ: So, I mean, how did we get here? I thought the Affordable Care Act was supposed to solve these kind of problems.

LEVEY: I mean, the ACA did a lot. Millions of people have gained insurance since 2010, and the law put some important new limits on how much health plans could make patients pay. So the problem could be a lot worse without the ACA, for sure. But the law didn't slow the rise of high-deductible health insurance. High-deductible plans are now standard. And as millions of us know, these plans require you to pay thousands of dollars out of your own pocket before coverage kicks in.

Now, one other question we asked in our poll was whether people had $500 to cover an unexpected health care bill, and only half of U.S. adults said they do. It doesn't take a Ph.D. in economics to figure out that that's going to produce a lot of debt. And part of what's happening now is that this debt is fueling a whole new industry that's basically dependent on patients' inability to pay their bills.

MARTINEZ: So a new industry - what do you mean by a new industry?

LEVEY: Well, it used to be when someone couldn't afford to pay a medical bill, they'd often work something out with the hospital or the doctor's office. It was kind of informal - ad hoc. Now there are so many more people who can't pay the bills that hospitals and providers are starting to adapt. Many are going into business with lenders or credit card companies. So that means that if you go into the hospital and you can't afford your $5,000 bill, you may get routed to a lender. And in many cases, that loan will come with interest. So you may end up paying 5 or 10% on top of what you owe for care. And sometimes hospitals - some of them public university systems or nonprofits that can't collect from patients - they sometimes sell the debt to collection companies. So medical debt is now big business.

MARTINEZ: Noam Levey, thanks a lot. NPR's ongoing series on medical debt is produced in partnership with Kaiser Health News. Noam, thanks.

LEVEY: Thank you.

(SOUNDBITE OF SEB WILDBLOOD'S "SKETCHES")

Copyright © 2022 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.