Widespread medical debt is a uniquely American problem. Roughly 40% of U.S. adults have at the very least $250 in medical debt, in keeping with a survey conducted by Kaiser Family Foundation.
“The history of medical debt is essentially a history of the changing answer to the next query: When the patient cannot pay the bill, who foots it?” said Dr. Luke Messac, an emergency physician at Brigham and Women’s Hospital in Boston who’s writing a book concerning the history of medical debt.
As health-care prices rose over the past fifty years, patients were being asked to pay more out of pocket after they received care.
There are a lot of complicated reasons for the rise in the fee of care resembling not prioritizing preventive care or a lack of price transparency, but one among the largest catalysts for inflation was the rise of medical health insurance.
“It was while you get this third-party payer system where the patient doesn’t must pay all of the fee of it directly, the insurer pays a piece of it,” said. Dr. Peter Kongstvedt, a senior health policy faculty member at George Mason University. “That provides you relentless upward pressure on pricing, because should you’re going to receives a commission, why not receives a commission some more?”
Within the early 2000s, federal laws led to a serious restructuring of how insurance policy shared costs, with the 2003 Medicare Modernization Act spurring a boom in high-deductible medical health insurance plans.
A deductible is the quantity a policyholder has to pay upfront before their medical health insurance plan kicks in. The common deductible for a person in 2022 is around $1,760, which is double what it was in 2006 when adjusted for inflation.
Roughly 70% of lower-income adults said they would not have the opportunity to afford a $500 unexpected medical bill. Nearly 1 / 4 of those in households with an income of at the very least $90,000 also said they would not have the opportunity to instantly afford it.
“It doesn’t really take a Nobel Prize in economics to appreciate that if most individuals cannot afford a $500 bill, and the typical deductible on a health plan that somebody gets at work is north of $1,500 now, that is that is going to create an issue,” said Noam Levey, senior correspondent for Kaiser Health News. “You possibly can’t walk into an emergency room or a hospital on this country and get out normally for lower than just a few thousand dollars.”
Watch the video above to learn more about how medical debt became so common within the U.S. health care system and what we will do to alter it.
