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Ginnie Graham: Medical debt will come to forefront after pandemic

Ginnie Graham: Medical debt will come to forefront after pandemic

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The pandemic has kept the accounts coming on Go Fund Me — the latest American way to pay for health care.

A search of “Tulsa” and “COVID” pops up more than 640 accounts; various changes on the words come up with different results.

Some of those are for non-medical-but-important causes, such as helping out minimum-wage and freelancing workers. But, like bankruptcy filings, the crowd-sourcing platform reflects a staggering amount of medical debt.

For the past year, work has been focused on immediate needs: prevention, testing, treatment. Once this lifts, medical debt will come to the forefront again.

This historic moment has uncovered our weaknesses. Too many people go without food and internet access. Too many workers have no savings and exist paycheck-to-paycheck. Public systems, like unemployment, are woefully underfunded.

Medical debt is part of these unmentionables.

The federal coronavirus relief package provided aid for COVID-19 patients. It may not have been enough, and the long-term health effects for survivors are not known.

“COVID-19 didn’t create the medical debt problem,” said Allison Sesso, executive director of the national charity RIP Medical Debt. “This was well underway with billions in medical debt across the country. What COVID did was exacerbate something that was already there.

“It’s both a health care crisis and an economic one.”

Data on medical debt is all over the place; all show it to be overwhelming for millions of Americans.

The latest estimate on U.S. medical debt in collections is $45 billion, according to a USA Today report of an analysis from consumer finance company Credit Karma. That averages to about $2,200 per person.

Nearly one-third of workers currently have medical debt, and 28% of those owe more than $10,000, according to a Salary Finance survey. Of those, about 54% reported having defaulted on bills.

A different survey, from, shows 56% of Americans have medical debt in collections, of which the majority is less than $5,000.

For a couple older than 65 retiring this year, Fidelity Investments estimates about $295,000 (after tax) will be needed to cover health care costs.

The U.S. ranks third in the world for medical bankruptcies, behind China and India, according to the World Population Review.

“There is a huge stigma around it, but it’s become the American norm,” Sesso said.

RIP Medical Debt is a national nonprofit working to eliminate debt by buying old debt in collections and paying it off for patients. Tulsa couple Mark and Mona Whitmire and the local Morningcrest Foundation launched a local effort last year that erased $28 million in debt for 28,321 families in the county.

These are not just debts of the uninsured. Much of this comes from working people with copays and deductibles too high to manage.

“We are really seeing bills for $1,000,” Sesso said. “The fact that someone cannot find $1,000 to pay a deductible because they are living so close to the edge is a big problem.”

The direct costs of COVID-19 are an ever-changing estimate.

Depending on the patient’s age, hospitalization costs for uninsured people averages $51,389 to more than $78,000, according to HealthCare Finance of a FAIR Health study. For those with insurance, it averages to $26,152 to $40,208.

In total, COVID-19 treatment costs could reach $546.6 billion, according to America’s Health Insurance Plans.

The CARES Act bill provided $175 billion through a provider relief fund. Providers can seek reimbursement for COVID-19 related costs by applying to the fund. It is to ease the burden on providers and insurance providers.

Some providers are covering all COVID-19-related costs for patients. Other approaches are to recover costs from patients first then seek reimbursement or apply a portion to patient bills.

This relief won’t extend to long-term effects, and only applies to coronavirus costs. Other patients don’t get this help.

“People have this idea that anyone will do anything for their health. But if the economics are that bad, people won’t get care or they will do things like ration medication,” Sesso said. “It’s real, and it matters to health access.”

Nationally, RIP Medical Debt has eliminated about $3 billion in debt since it started in 2014.

“That’s a drop in the bucket,” Sesso said. “But for the two million people we’ve helped, we’ve helped in a major way. We need to ramp up our ability to get debt abolished.”

The goal is ramp up efforts to pay off $10 billion annually in the U.S. A challenge has been getting hospitals to sell or donate debt to the nonprofit.

“A lot will write it off their books as bad debt and move on,” Sesso said. “They are not collecting on it, and it’s of no value to hospitals. So, let us get that debt.”

In Tulsa, the Whitmires are creating a unique RIP Medical Debt model. Instead of a one-time drive, they are establishing an ongoing campaign to forgive qualified medical debt in Tulsa County as it accumulates

“Tulsa in these efforts is pioneering,” Sesso said. “This is a model Tulsans should be proud of: trying to get super-engaged people at the table to get rid of debt.”

This is just one small piece to help the problem.

Medical debt cannot be solved by the generosity of donors. There must be broader, systemic changes in health care.

Oklahoma voters forced the first step with Medicaid expansion. Other measures are more price transparency, insurance options for workers, patient billing advocates, negotiations and administration cost reductions.

Incentivize preventative care, and control costs of prescription medications.

Some providers are getting away from fee-per-service models to focus on patient-value experiences. These have been retainer-type fees and other cost-sharing approaches with other provider resources.

Communities have unique elements. Local leaders — elected officials, philanthropists, hospital and insurance executives and nonprofit directors — ought to meet regularly to find ways for bringing down costs for residents.

Health care is a sign of a community’s prosperity, just like the rates of poverty, unemployed and high school graduation. Debt affects all that.

“Medical debt impacts health,” Sesso said. “It’s a stress that can physically affect the well-being of a person. … The more communities can come together to think proactivity, the more debt can be relieved. “

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Ginnie Graham 918-581-8376

Twitter: @Ginnie Graham


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