Medical Debt Plagues the US

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Insurance Reform Needed to Stop the Debt Trend

Medical debt remains one of the greatest causes of debt in the US. In the past, only about 10% of the nation’s GDP was spent on healthcare. Today, that figure has risen to approximately 18% of the GDP. Moreover, approximately half of all debt in the US is due to medical debt. Medical debt is defined as the remainder of a medical bill for which the patient is responsible and cannot pay. The amount of debt is growing because medical bills have skyrocketed and healthcare costs are out of control. Those same debts that result from the inability to pay medical bills then lead to a worsened state of health as the debt leads to stress and often pushes some to suicide.

Patients who have cancer often must spend up to 30% of their gross income to pay for their care while many others refuse treatment that might save their lives in order avoid falling into debt. While insurance may cover many costs, many policy owners are not aware of the costs that are not covered. The coverage offered by insurance is frequently limited by excessively narrow networks, a device of the insurance companies. Many consumers take for granted that their treatment is covered only to find out later that they must pay enormous out-of-pocket costs.

It’s not unusual for your hospital to be in network but for the doctors who treat you there to be out of network, leaving you with a surprisingly large bill. Many of those who have coverage through insurance must still pay five to ten thousand dollars in deductibles before the insurance even begins to fully kick in. One of the causes of the spiraling costs was the creation of Medicare and Medicaid. When those benefits were introduced, hordes of doctors jumped at the opportunity to become specialists because of the financial benefits to be gained.

There is a need for policymakers to look at insurance reform alongside the efforts to implement healthcare reform. The nation has a broken healthcare insurance industry contributing to an unacceptable level of uninsured and underinsured people. An average of 10% of the general US population is affected by medical debt while 16% of the population in black communities suffer from the debt. In the southern states, more than 40% of the population carries medical debt on their credit report.

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Vic Alper
NRN • New Right Network
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