Medical Bills Have Been Reduced… For Now

Medical debt has decreased in recent years as a result of a strong economy and improved coverage under the Affordable Care Act.

According to a new analysis from the Urban Institute, medical debt in the United States is anticipated to grow again after dropping during the COVID-19 pandemic. It will hurt lower-income Americans the hardest, at a time when inflation is also rising.

Researchers discovered that medical debt rates had reduced in recent years, partially due to a strong economy and partly due to the Affordable Care Act’s expanded coverage (ACA). Medical debt actually decreased as a result of the epidemic, as many people postponed medical treatment and federal relief bills provided additional coverage and financial support to many families.

A reduction in medical debt—for some, more than for others.

Medical debt fell after maintaining stable in the years leading up to the pandemic, according to the report. The survey stated that “the shares of adults with medical debt, issues paying medical bills, and medical debt in collections have decreased.” “Between March 2019 and April 2021, the percentage of non-elderly adults reporting medical debt reduced from 23.6 percent to 16.8 percent, and the percentage reporting issues paying family medical costs in the previous 12 months fell from 17 percent to 12.2 percent.” Medical debt in collections declined from 15.3 percent in February 2020 to 13.9 percent in August 2021 among persons with credit records.”

The study discovered that younger persons experienced the greatest reductions in medical debt during the pandemic, with 18–24-year-olds experiencing a drop of roughly 10%. Medical debt decreased by a similar amount among adults aged 25 to 34.

Differences in insurance coverage between older and younger Americans could contribute to the disparity in medical debt, according to the study. “Despite having substantially larger medical expenses, the youngest adults had higher rates of medical debt in collections than the oldest adults (12.5 percent versus 9.0 percent),” according to the research. “These age differences partly reflect differences in access to health insurance coverage, including universal coverage for senior persons through Medicare, and suggest that young adults may require greater support to avoid medical debt.”

An increase in medical debt is projected.

The authors of the study stated that the federal government took a number of steps to aid Americans during the economic slowdown caused by the pandemic, including direct compensation via tax credits, a moratorium on Medicaid disenrollment, and increasing ACA coverage. Most of these policies have not been renewed, and unless Congress acts to prolong or make them permanent, they will expire.

“Without further policy action, the risk of medical debt may rise again when health-care utilization rises and remaining relief measures expire,” the paper stated.

The study recommended extending enhanced subsidies for ACA plans, lowering cost-sharing requirements on those marketplaces, making ACA marketplace plans available to more Americans with access to employer-based coverage, and increasing regulation of hospital financial assistance and debt collection practices to prevent a rise in medical debt in the coming months.

Source:  https://www.benefitspro.com/2022/05/12/medical-debt-has-decreased-for-now/