More people are at greater risk for debt

"Medical debt has been increasing over the past 15 years. In our state, that number has increased dramatically over this time," says Robert A. Crittenden, MD, MPH, a professor at the University of Washington School of Medicine and chief of the family medicine service at Harborview Medical Center, both in Seattle. "With the economic downturn, this is an even bigger issue. More families are facing unaffordable debt."

The fact that many hospitals and doctors strongly encourage shifting of medical bills to credit card debt hides this, he says, but this puts more people at greater risk due to the high interest rates applied to those cards. "The people hammered by medical debt are most often insured—insufficiently as it turns out—and most are surprised by their circumstance."

States have approached medical debt in these three ways:

  • Providing affordable, publicly sponsored insurance and care for low-income working families.

"Most of these programs are small and insufficient for the need," Dr. Crittenden notes.

  • Requiring hospitals, where much of the debt is accumulated, to change some of their policies to decrease the risk of bankruptcy.

This may mean improving charity care policies, strengthening community benefit provisions, and changing the method by which hospitals handle debt for low-income families.

  • Ensuring that health insurance policies actually cover the large medical bills.

"These are the expenses insurance is supposed to cover," says Dr. Crittenden.

After a lot of work in states on insurance standards in the 1990s, there now is a strong push for decreasing rules and oversight and allowing the market to set rules, coverage and prices, especially in the individual and small group market. "The result has been higher deductible plans which are less costly, but more risky for half of the population, a push for cross-state sales of plans that would reduce oversight and allow less regulated plans to be sold anywhere, and bare-bone plans," he says.

State policy-makers have a "tough road" ahead of them, says Dr. Crittenden. "The folks that want to let the market take care of the problems believe there is a problem because of the current regulatory environment," he says.

The voting public does not trust insurance companies, as they have experience with price and coverage changes that have left them or friends in trouble. "They feel powerless and do not have affordable choices to make the market work for them," says Dr. Crittenden. "Much of the market they see does not have plans that protect them or that are affordable."

The question is whether affordable means a cheap plan that people can afford but is insufficient if they get sick, or affordable health coverage that is protective. "Premiums are not like taxes," he adds. "Premiums require low-income people to pay about the same as the most wealthy people."

State policy-makers are "chipping around the margins," says Dr. Crittenden, but most are unwilling to bite the regulatory or financial bullet, hoping that the federal government will solve the problem.

Given the rise in health care costs, most people in the lower half of the income brackets cannot afford a protective health plan without some subsidy. "Luckily, many people have employers and public plans that subsidize good insurance," he says. "But, that coverage is waning and more people are in the 'market' now, with poor choices."

Contact Dr. Crittenden at (206) 744-9925 or at docbob@u.washington.edu.