Bankruptcy Often Related to Medical Bills
American families already coping with serious medical problems are being forced into medical debt or bankruptcy at an alarming rate, according to two new studies.
One study, conducted by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School and published in February in Health Affairs, found that half of all bankruptcies, involving 700,000 American households and affecting more than 2 million people annually, are attributable to illness or medical debt. They also found such bankruptcies increased 2,200 percent between 1981 and 2001.
The other study, still unpublished, by Jennifer Edwards of the New York-based Commonwealth Fund, a research and policy think tank, found that 29 million Americans -- 14 percent of all adults -- are in serious medical debt, which means they have put large medical bills on their credit cards, taken out second mortgages on their homes or are in a payment plan with their hospital or other provider.
The studies found that most people who wind up in medical debt or bankruptcy -- two-thirds in the Commonwealth study and three-quarters in the Harvard study -- had health insurance when a family member got sick.
The emerging picture is "frightening," said Himmelstein, an associate professor of medicine at Harvard Medical School and a primary-care physician at Cambridge Hospital. " Most of the medically bankrupt were average Americans who happened to get sick. Health insurance offered little protection." Often, people had health insurance through their employers, then lost their coverage when they had to quit their jobs because of illness.
Clearly, the system is a mess. But there are things patients can do if faced with high medical bills -- and some things they should not do. Here are some tips:
First and foremost, apply for government assistance.
With any medical bill, of course, especially a big one, it's also crucial to "make sure it is accurate," said Mark Rukavina, executive director of The Access Project, a Boston-based research and advocacy group on health-access issues. Look at the itemized bill and check each item against your medical records to make sure that you received the services for which you are being charged. "Significant billing errors can occur," Rukavina said.
Also make sure that you are not being "balance billed." It is "totally illegal" for providers to ask you to pay more if Medicaid has already paid your bill, said Randy Boyle, a staff attorney at the Los Angeles-based National Health Law Program.
Try not to put large medical bills on your credit card, "and for goodness' sake, if you owe credit card debt, don't get a home equity loan to pay it off" because you could lose your house, Boyle said. Instead, negotiate with your doctor or hospital to reduce your bill or allow you to pay in installments, said Ann Kempski, director of health systems policy at the Washington-based Service Employees International Union. But negotiate right away. "Once you pay your medical bills by credit card, you can no longer ask the hospital to negotiate," said Woolhandler, an associate professor at Harvard and a primary-care physician at Cambridge Hospital.
And don't let a hospital persuade you it can't negotiate. Hospitals are free to give discounts off their sticker price charges, Kempski said. Some hospitals also have charity care, so look into it. "Even if you have a middle-class income," Kempski said, "you can make the argument that the medical bill is so high relative to the income that it's still squeezing blood from a stone."
-Adapted from “High medical bills don't have to lead to bankruptcy” by Judy Foreman, The Boston Globe, February 22, 200502/2005