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People Have Less Trouble Paying Medical Bills, But Concerns Remain

A new HHS report shows that fewer people report having trouble paying their medical bills, but the agency maintains that the burden of healthcare costs is still a public health concern.

Jacqueline LaPointe
By
Published: 18 Jan 2023

Paying medical bills has gotten a little easier for patients, according to a new report from HHS.

The report released by the Centers for Disease Control and Prevention (CDC) found that the percentage of people who were in families having trouble paying medical bills over the last year fell from 14.0 percent in 2019 to 10.8 percent in 2021. That means 10.5 million fewer people were in families having problems paying medical bills compared to a few years ago.

The downward trend, according to the CDC, can be explained by pandemic-era legislation that may have indirectly mitigated the impact COVID-19 had on people who report trouble paying medical bills.

Pandemic-era legislation, including the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Consolidated Appropriations Act of 2021, and The American Rescue Plan Act of 2021, provided direct monetary payments, flexibility with payments to creditors, additional unemployment assistance, subsidized payroll for certain small businesses, and improvements in paid sick leave, among other provisions.

Additionally, the American Rescue Plan Act of 2021 increased the percentage of people covered by insurance using COBRA premium subsidies, eliminated the income limit for subsidy eligibility for those buying private plans through the Marketplaces, and increased subsidies already available to those with lower incomes. This law also made changes to the Medicaid program to increase coverage and expand benefits.

Together, the provisions may have mitigated the impact the pandemic had on people experiencing difficulties paying for their medical bills, the CDC stated.

People may also have gotten a reprieve from medical bills during the early days of the pandemic when utilization was low due to community shutdowns, the agency hypothesized in the report.

Still, millions of Americans struggled to pay their medical bills during the period. The report showed that people were more likely to have problems paying medical bills if they had low family income, were uninsured, or lived in non-Medicaid expansion states.  

People who struggle to pay their medical bills not only experience financial consequences, such as increased debt from credit cards and other means of paying for medical bills, but they may also forgo care and prescription drugs altogether, the CDC said.

A Gallup poll released just one day before the CDC’s report showed that the percentage of Americans reporting that they or a family member postponed medical treatment in 2022 due to cost increased by 12 points in one year, reaching 38 percent of respondents. That is the highest percentage in Gallup’s 22-year-trend.

“Despite the decreasing trend in the percentage of people with problems paying medical bills, the burden associated with unpaid medical bills remains a public health concern,” CDC said in its report.

Addressing the burden of medical debt

Unpaid medical bills have become a major burden for Americans, especially as healthcare costs rise. Some healthcare providers and medical debt collectors have even placed liens against patient homes over unpaid bills, while others have garnished patient wages.

Federal and state governments are seeking to prohibit aggressive medical debt collection. New York, for example, modified civil practice law last year to ban healthcare providers from placing liens on an individual’s primary residence or garnishing wages to collect medical debt.

"No one should face the threat of losing their home or falling into further debt after seeking medical care," New York Governor Kathy Hochul said at the time. “With medical debt a burden for far too many, this is an important step to address this crucial issue.”

The Biden Administration has acknowledged the problem of medical debt and promised to protect consumers through several reforms, including requesting data from more than 2,000 providers to evaluate medical bill collection practices and financial assistance offerings.

The Consumer Financial Protection Bureau (CFPB) also plans to investigate credit reporting companies and debt collectors that violate patient rights and hold the violators accountable. In addition, CFPB will monitor credit reporting and determine if credit reports should include past-due medical bills.

Healthcare providers are also seeking ways to make it easier for patients to pay their portion of the bill. Many organizations offer financial assistance programs and payment plans to ease the burden of unpaid medical bills, while others have implemented technology to make bill payment more intuitive and convenient for patients.

However, lack of insurance and low income, among other factors, hinder the effectiveness of some provider strategies, perhaps necessitating a different approach to addressing the burden of medical debt.

Next Steps

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