Because of COVID-19: Managing Medical Debt
Americans were struggling with medical debt long before the COVID-19 pandemic hit. For the last year, many people have struggled to handle bills in the midst of job loss and financial hardship exacerbated by the public health crisis.
Side Effects reporter Carter Barrett spoke with John Brengle, attorney with Indiana Legal Services; Jenifer Bosco, attorney with the National Consumer Law Center; and Dan Weissmann, host of An Arm and a Leg podcast, about the scope of the medical debt problem and what resources people can tap if they find themselves struggling with medical bills.
How big a problem is medical debt in the U.S.? How do we understand, or quantify, the problem?
There aren’t a lot of straightforward answers, Bosco said.
“We don't have national statistics on, you know, what is our total amount of medical debt, or how many people are sued,” she said. “Or, you know, how many wage garnishments are there every year, not on a national level.”
However, thanks to research from individual states, we do know some important facts about medical debt. About 24% of non-elderly Americans report having past-due medical bills; and that percentage increases to 31% for non-elderly Black households. Medical debt is the top reason that people file for bankruptcy, and represents more than half of the items on credit reports.
“I could go on and on with numbers and statistics, but you know, it's a significant problem and unfortunately continues to be a problem over the past year, that consumers are still facing medical debt collection, lawsuits and wage garnishments and legal actions over medical debt,” Bosco said.
What do we know about the way COVID has changed the issue of medical debt--or has it?
In some ways, it’s hard to tell. It can take months for a consumer to receive a bill after a hospital visit or medical procedure. And testing and treatment for COVID-19 is supposed to be covered by your insurance company--though there are cases where people have received bills for services that should have been covered, Bosco pointed out. If there are debts associated with COVID-19 treatment, it won’t start showing up on credit reports for months.
In general, the medical debts people have struggled with during the pandemic were likely incurred before the pandemic began. But managing it has gotten more complicated, thanks to social distancing necessities after courts reopened. Some hospitals and collections agencies are still taking people to court for unpaid debts, sometimes requiring people to show up in person to courtrooms despite the ongoing COVID threat.