Even with the expansion of insurance coverage through the Affordable Care Act, many American households face heaps of medical debt, according to a new study. A report released by consumer assistance agency NerdWallet Health on Wednesday finds that Americans pay three times more in third-party collections of medical bills annually than that of bank and credit card debt combined.
The results of an online survey of more than 2,000 American adults in August, along with public and private sector reports, show that more than 60 percent of Americans have accumulated medical costs that surpassed their expectations. Nearly three out of four people surveyed also said that they could have made better medical decisions had a doctor reviewed the cost of medical care beforehand.
Both American families and the federal government have taken the brunt of spiraling medical costs. In 2012, patients doled out more than $21 billion for medical bills to third-party collection agencies. This year, according to NerdWallet’s estimations, American hospitals are expected to provide more than $50 billion worth of care for which the insurer or patient will not pay.
Other research has confirmed similar findings. According to the Centers for Disease Control and Prevention, one in four American households have accumulated thousand of dollars in medical debt. Forty percent of people in that group said they haven’t made payments as of yet. Researchers said the majority of these costs derived from emergency room visits and medical procedures for which patients received charges that far exceed its market value.
“Most consumers would be shocked to learn that health care expenses are the largest category of consumer debt in collections,” Christina LaMontagne, lead author of the NerdWallet Health study, told ThinkProgress.
NerdWallet Health’s study provides a glimpse into the inner workings of an industry that often thrives on a lack of transparency when it comes to how much hospitals charge patients for care. Even doctors don’t necessarily know how much the services they’re recommending actually cost.
“There are few standards in the cost of care for medical procedures. Many people go into this process and get blindsided by the costs,” LaMontagne said. “Today, consumers have no choice but to get more proactive. We all need to be self-determinant, but the system is not allowing consumers to make the best decisions because they don’t publish the information they need.”
The labyrinth of medical expenses, insurance, and reimbursements can leave people feeling helpless when they’re faced with medically necessary procedures. Some Americans like Tiffany Leflouria have little choice but to accept whatever options doctors lay before them, especially during what they perceive as life or death situations.
In May, Leflouria, then eight months pregnant, entered a Houston emergency room after complaining of shortness of breath and swelling in her legs. A CAT scan and MRI later revealed a buildup of fluids in her heart and lungs. Doctors diagnosed Leflouria with cardiomyopathy — the weakening of the heart muscles that usually leads to heart failure. Saving Leflouria’s life and that of her unborn child would mean having an induced birth and keeping the newborn in observation until doctors deemed her healthy.
Days after her diagnosis, Leflouria gave birth to a healthy baby girl. The celebration didn’t last long, however. The cost of three weeks of care for Leflouria and her daughter totaled more than $167,000. Even after her insurance company paid the hospital, the new mother still owed $68,000 — most of which stemmed from the care of Leflouria’s newborn.
It wasn’t until NerdWallet helped Leflouria negotiate a reduction in her medical expenses that she discovered excessive charges, including $4,000 for a day of room and board for her daughter. According to the NerdWallet Health study, billing errors inflate hospital bills significantly — an audit of 34 high-risk claims in hospitals by the Office of the Inspector General in 2013 found that none of them fully complied with Medicare requirements.
“At that time, my doctors and I had no conversation about how much my care would cost,” Leflouria told ThinkProgress. “It was in the back of my mind but my main focus was on my daughter. I’m a single parent with a newborn. When I was in the hospital, I was pretty much at the mercy of whatever physician or cardiologist was there.”
Even with NerdWallet’s help, Leflouria still faces hurdles in paying off her debt and meeting other financial obligations. The unemployment compensation she received while on medical leave recently stopped and her insurance lapsed shortly after. Today, Leflouria’s monthly social security disability payments counts as her sole source of income, and she recently moved in with a friend. “Right now, I’m kind of in a homeless situation,” Leflouria told ThinkProgress.
Stories like Leflouria’s have spurred conversation among lawmakers, inspiring legislative action to protect patients against getting hit with unnecessarily large medical bills.
Earlier this month, the office of New York Governor Andrew Cuomo (D) released a report detailing how loopholes in out-of-network regulations left patients in the state with medical bills totaling the tens of thousands. The Cuomo administration has expressed interest in closing those loopholes, although no timeline has been set for a bill to address the issue.
Rep. Earl Blumenauer (D-OR) also authored legislation last year that would provide patients with more opportunities to discuss end-of-life decisions to their healthcare provider. The bill, touted as the Personalize Your Care Act, ultimately hopes those conversations will cut help down on unnecessary and expensive medical care.
The Obama administration also wants to encourage a shift toward greater price transparency in the health industry. In May, the Center for Medicare and Medicaid Services (CMS) released first-of-its-kind data detailing the prices that hospitals charge for common procedures. Experts hope that making the data public will help encourage hospitals to standardize their bills for common procedures.
But patients and their families don’t necessarily have to wait on legislative action to protect themselves. LaMontagne said that patients should learn more about their physician and specialist’s expertise in treating an ailment before using their services. Some experts also advise that consumers challenge medical expenses by requesting an itemized version of their bill that will allow them to see the cost of each procedure, tool, and amenity used.