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Medical Debt: The New Norm for Patients in America | Commentary

Without fanfare, medical debt has swiftly become the new norm in America.

How normal? To echo my college professor, look to your left, then look to your right. According to the Kaiser Family Foundation, one in three Americans report having problems paying medical bills. Already, while paying for medical treatments, 28 million Americans have exhausted their savings accounts, 21 million are paying off large credit card debt and an additional 21 million are unable to afford basic necessities. The problem is so pervasive that medical-related debt is the most common cause of bankruptcy in the United States, with 62% of individuals who declare bankruptcy citing medical debt as the trigger in their financial ruin.

This statistic closely mirrors the experience of the Patient Advocate Foundation, where we work with patients nationwide to provide case management services and copay relief. We see first-hand the untold stress, exacerbated illness and devastated finances of not only the very poor, but those in the middle class. More than 67 percent of PAF patients are insured. More than 57 percent of the cases we served were related to medical debt crises.

This tragedy is the inevitable result of a health care system that promotes both high costs and irregularities. For example, one NIH-sponsored study showed an enormous variability in emergency room charges: The charge for a sprain, researchers found, can range from $4 to $24,110. These prices, which combine both the patient and insurer’s costs, showcase the extreme fluctuation and unpredictability that is symptomatic of the American health care system as a whole. We must, therefore, acknowledge the effect this variation and unpredictability has on those the system is designed to serve: patients.

And while the Affordable Care Act has allowed millions of Americans to be insured, often for the first time, it does nothing to help those already dealing with high costs. For although medical debt has become the norm in this country, there is no acknowledgement of its unique, unpredictable and involuntary nature. In fact, it is often unfairly lumped in with credit card debt. Patients who have declared bankruptcy because of medical debt should not have to go through debt counseling, where they are asked, “What would you do differently?” For many of the patients that PAF serves, the only true answer is “not get cancer,” and unfortunately, we have no control over such a scenario.

Currently, the United States Bankruptcy Code does not specifically define or address medical-expense-related debt. As a result, it is not possible to file for “medical-expense-related bankruptcy” and patients, some of whom have paid for their medical expenses with a credit card, are forced to file for Chapter 7 or Chapter 13 bankruptcy relief, which can result in substantial losses. Basic protections, like those proposed in the 2009 Medical Bankruptcy Fairness Act, would protect homeowners from the loss of their home due to medical debt, restore protections for caregivers and provide a means-tested exemption for those with debt caused by serious medical problems.

Legislation is critically needed, then, that will provide protections for those already overwhelmed with medical debt and for future patients that will acknowledge the unique and unpredictable nature of medical debt.

We need a reformed system that:

Promotes price transparency

Promotes patient, provider and payer responsibility

Provides homeowner protections

Provides protections for family members and other caregivers

Provides fairness and equity in credit rating within a system that recognizes medical debt as unique among other types of debt.

It is not uncommon for our case managers to talk to patients who normalized their pain for too long, living with it every day until their previously manageable condition became untreatable. In the same way, we have ignored the destructive effects of medical debt on millions of patients in this country, normalizing the situation until we have become a nation of silent debtors in economic crisis. It is imperative that responsible lawmakers establish a new norm in America.

Nancy Davenport-Ennis is the founder and Chairman of the Board of Directors for the National Patient Advocate Foundation and the Patient Advocate Foundation.

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