How effective are different medical debt policies?  A researcher steps in - Illinois Newsroom

How effective are different medical debt policies? A researcher steps in – Illinois Newsroom

LOS ANGELES — Wes Yin says it’s impossible to study health care these days without encountering the problem of medical debt.

“There are a lot of people who are struggling,” said yinassociate professor of economics at UCLA and one of the nation’s leading researchers on medical debt.

Listen to this story here.

More … than 100 million Americans have health care debt, according to a survey by Kaiser Health News and NPR. Another study estimates that Americans have at least $140 billion in medical debt.

Medical debt can ruin people’s credit scores, cost them their homes and force them into bankruptcy. Investigations show that it leads people to avoid care and skip prescriptions, especially among people of color and people with disabilities. Some studies have linked medical debt to a greater likelihood of suffering from chronic pain, depression, premature death and attempted suicide, but there is little research on whether medical debt directly causes people’s health is deteriorating.

As for the solutions, Yin’s own research suggests that writing off medical debt leads to short-term problems. increase in patients with access to necessary medical care, and that the expansion of Medicaid leads to significant discounts in medical debt.

Over the past few years, state, federal, and industry leaders have enacted several policies to try to address this pervasive problem, and in an interview, we asked Yin to rate them on a scale of 1 to 10.

Yin said many policies target different points in what he calls the medical debt pipeline — from when a patient receives care they can’t afford, to the impacts debt has on their health. life.

“They are not necessarily substitutes that we necessarily have to compare to each other,” Yin said. “They are all potentially good complements to each other.”

This interview has been lightly edited for length and clarity.

Compromise : Let’s start with the more than 20 states that have laws requiring hospitals to provide free care to poor patients or limiting certain fundraising tactics.

Ying: For this one, I think it’s a two. It’s not for lack of effort or good intentions. It’s just that a lot of states don’t really know how much financial help is needed. It is also very difficult to apply. So I’ll give it a two.

Compromise : Now what about these two Biden administration policies? First, the administration will consider medical debt when deciding whether to give someone a loan, such as for a small business or a house.

Ying: [This] is like a doctor treating an already present disease. It is not preventive. But we know that when people are in debt, it affects their credit score, it affects their ability to get loans, it increases their interest rates. So if [this] is implemented well, it really limits the negative impact that medical debt has on people’s ability to get federal loans. So that’s a good thing. I’ll give it a six.

Compromise : OK, let’s talk about Biden’s second policy: They plan to use data on hospital debt collection practices to decide which facilities receive federal grants.

Ying: This is the big joker for me. All the devils are in the implementation details. If they don’t really mandate using that for potential grants to those hospitals, it might not have a lot of power there. But at the very least, the fact that the federal government is getting more data on debt collection practices, the amount of debt held by hospitals, really has the potential for big changes down the road. So I’m going to give him a six as well, but I’m going to give him a slight edge just for his potential.

Compromise : It’s true, and the more information you have, the easier it is to develop policies that address the problem.

Ying: Exactly.

Compromise : OKAY. So let’s move on to Congress, which prohibits out-of-network surprise medical bills through the law with no surprises.

Ying: I’m split on this one. [Surprise medical bills are] not a very big source of medical debt, but it really is one of the most infuriating sources of medical debt. Emergency department spending accounts for about one-tenth of all hospital spending, and surprise billing is only a small portion of emergency department billing. And so it eliminates that, which I think is great, but it doesn’t solve a bigger source of the problem. So let’s give it a five overall.

Compromise : OK, we have one more to file, Wes. Starting next year in 2023, the three largest credit bureaus announce that they will remove unpaid medical debt under $500 people’s credit reports. It could be up to 70 percent medical debt currently on credit reports.

Ying: I’m really bullish on this one too. Having medical debt can impact a person’s credit rating, which affects their interest rates and ability to borrow. It can even affect employment decisions and hiring decisions. So anything we can do to lessen the negative effects of medical debt is a good thing. So I’ll give it a six.

This story is from the Health Policy Podcast Compromisepartner of Public media on side effects. Dan Gorenstein is the editor of Tradeoffs and Ryan Levi is a reporter/producer for the show, which published this story on November 3, 2022. Tradeoffs health care cost coverage is supported, in part, by Arnold Ventures and West Health.

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