Up First from NPR - The Sunday Story: The Unbearable Weight of Medical Debt

Episode Date: December 10, 2023

Today on The Sunday Story host Ayesha Rascoe explores the growing crisis of medical debt in America. Nationwide, 100 million people have health care debt, according to a KHN-NPR investigation, which has documented a crisis that is driving Americans from their homes, draining their savings, and preventing millions from accessing care they need.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

I'm Aisha Roscoe, and this is a Sunday Story. Across the country, people lose their homes, empty their retirement accounts. Some struggle to feed and clothe their families, all because they face crushing medical bills. For more than a year, NPR and our partner KFF Health News have been investigating medical debt. The project has exposed the enormous scale of this problem. More than 100 million people in the U.S. are saddled with some kind of health care debt, often forcing them to make heart-wrenching sacrifices. People like Penelope Wingard from Charlotte, North Carolina. And it's like you're being punished for being sick.

And it's not your fault. And no one should feel like they're being punished. Today, NPR health correspondent Yuki Noguchi and Noam Levy from KFF Health News are here to talk about the project, the people they've met during the investigation, and the impact their reporting is having. So welcome to you both. Hi.

Thank you. So when we're talking about medical debt, what exactly do we mean? Are we talking about medical bills that people don't pay or can't afford to pay or just any medical bill? What is medical debt? Well, Sue, historically, I think people thought medical debt is a medical bill that someone couldn't pay. It ends up getting reported to a credit bureau. It goes on people's credit scores. And that traditionally is the way that medical debt was actually calculated. But the truth is

that vastly understates kind of how big this problem is. Because a lot of people, when they get their medical bills or their dental bills, they're putting it on a credit card and then they don't pay the credit card off and the credit card debt lingers for maybe years at a time. Well, that's not technically medical debt, it's credit card debt, but it comes from a medical bill. Same thing with a payment plan. Increasingly, a lot of patients go on these payment plans

with a hospital or a doctor and they're paying hundreds of dollars a month for like three or four years. Or maybe they borrow money from a hospital or a doctor, and they're paying hundreds of dollars a month for like three or four years, or maybe they borrow money from a bank or a payday lender or friends or family, and they're in debt to pay off this medical bill, but it doesn't actually get recorded as medical debt. And when you put that all together, that's how you get 100 million people. Okay, so it's not just the actual bill being paid.

It's if you have to put it on a credit card or go to your mama or whatever. It's all of that. Yuki, I know you were digging into some of the statistics around medical debt. So what were you seeing? Just how broad the problem was, our partners at KFF did a poll asking people about their experience with health care debt, and they polled more than 1,200 people across the country. And the survey found 41 percent of U.S. adults have health care debt. That is huge. But the KFF polling also found that there are groups bearing a disproportionate share of that burden. So Black Americans are 50 percent more likely to have debt, and low-income people, you know, they have a lot less margin to play with. And so they are more

than twice as likely to carry debt from medical bills. And young people below 30 are actually more likely than seniors to carry this kind of debt. So I think overall, when you look at that number, it tells a story that it's really the people least likely to afford it who are carrying this kind of debt. And so we're not just talking about the uninsured here, right? Like people who don't have health insurance. Or are we just talking about people who are uninsured? Well, it's true that people who lack health insurance are more likely to carry debt than those who have health coverage. This is actually a problem that touches people who have all kinds of health insurance too. And that's

increasingly because many of us have these health plans where we have to pay thousands of dollars out of pocket before our health insurance kicks in. And so, you know, if you go to an emergency room with a hangnail, you can't get out of there for less than $2,500. And, you know, if you go to an emergency room with a hangnail, you can't get out of there for less than $2,500. And, you know, if you have a high deductible health insurance plan and you don't have money in the bank, you're going to end up in debt. Well, I know I've lived that, you know, when I had my kids, I was not a host at that time. And, you know, I got those thousand dollar bills and I had to call up the hospital and say, look, either I don't know if y'all can do a return policy on a baby or we're going to do a payment plan. You know, Aisha, just really quickly, one thing we saw that was really kind of sobering was that the people we heard from most frequently were new parents who didn't expect that even a standard labor and

delivery, the kid comes home with you, doesn't go to the NICU, you still have thousands of dollars. That was mine. And they charged for you and the baby. The baby got bills. What? I just had a baby. I didn't know complications. Wouldn't people think that the whole point of insurance is to pay medical bills? Like, isn't that the point? Well, it is. But as Noam said, you're seeing higher deductible plans, less coverage for the insurance that you do have. And it's harder for patients to navigate that and know what's covered and what isn't. So if people are burdened by this much debt, how are they coping? Well, there's the emotional coping, which has negative effects on your health, right? So there's kind of a vicious cycle going on there.

But, you know, the gut-wrenching part of it is also the financial sacrifices that these families make. 63% of those with medical debt said they cut back on basics like food and clothes. 40% took on extra work. And a fifth of people with medical debt had to change their living situation as a result of that debt. Noam, you also explored the particularly troubling impact that medical debt is having on minority communities and how that deepens racial disparities in health. Talk to me more about that. Yeah, you know, this is one of the kind of particularly uncomfortable truths, I think, about medical debt in this country. And that is that it is perpetuating, frankly, an ugly legacy of racial discrimination in this country. And so what do I mean by that? Well, we looked at

one community in particular, Knoxville, Tennessee, which was historically very segregated. The east part of town was where the black community was centered. And for many years in the 1800s, it was poor, but there were businesses, there were churches, doctors, lawyers, theaters. And then after the Second World War, the city basically leveled that whole part of town to put in a freeway, build a bunch of parking lots and a civic center. And it basically eviscerated kind of what black wealth there was in that part of town. Hundreds of homes were torn down, churches, more than 100 black-owned businesses, and basically never recovered. And when you look now at where medical debt is concentrated in this community, and this is repeated all over the country, but if you look in Knoxville, medical debt is three times higher in that part of town, the black part of Knoxville, than it is in the western suburbs of thehip, you don't have the wealth. And if you get a big bill, a big medical bill, you can't pay it. And so it becomes this vicious cycle where medical debt is essentially another barrier for people who've historically been held back by discriminatory policies in housing and employment and so forth.

You're listening to The Sunday Story. We'll be right back. past and promising future. Find the limited edition Royal Canadian Air Force $2 coin today. We're back with the Sunday story, talking with Yuki Noguchi and Noam Levy about the impact medical debt is having on families across the country. So in the course of your reporting, both of you talked to a lot of people directly affected by medical debt. What did they tell you? We talked to hundreds of people across the country, people who lost their homes, had to cut back on food, drain their retirement accounts, put off their education. One family that really stuck with me are the Bucks, Arian and Samantha Buck. They live just outside Phoenix. They have

three kids. They work, but they don't have a lot of money. And they've had their share of medical challenges over the years. Several trips to the ER. She had ovarian cysts. He had an intestinal infection. One of their kids is autistic. And they say it all added up to about $50,000 in medical debt. And that led to a lot of scrimping. Arian said that's been really hard on the kids. They want to go to the mall. They want to go to just on trips to like Sedona or Flagstaff and day trips. But even that little bit extra money is just too much. We just don't have it. Arian said they sometimes go without school supplies. They rely on family for Christmas gifts. Yeah, it makes you feel like a failure. I'm not giving my kids the best life possible. I mean, the best I can do for them is just put and have a regular life and provide for their kids. It's really heartbreaking. The problem is that it's actually blocking people from getting the care they need.

We found that one in seven people said they'd been turned away from a doctor or a hospital or other provider because they owed money. And this happened to Arian Buck, too. He came down with a really bad stomach bug a few years ago. I just got sick and I wasn't able to keep anything down. I wasn't able to use the bathroom properly to the point where it was really concerning. And I tried to call my doctor that I had at the time to go see him. However, when I called to make the appointment, I was denied due to me owing them less than $100, actually. He ended up having to go to the emergency room, actually, and thankfully he recovered. But the visit meant thousands of dollars in more bills because the care wasn't covered. And, you know, the whole experience just left the Bucks feeling pretty disillusioned. So the Bucks are talking about debt related to physical health care. But I think most of us know that mental health care can also be very expensive. Like,

there are a lot of people struggling with that as well, right? Well, that's right, Aisha. I mean, I think that's where you find a lot of hidden debt. You know, for years now, we've had this mental health crisis and not enough care to go around. And really what it means is that even if you have insurance, you know, there might not be a psychologist or social worker in network or close enough to make any sense to go to. And I talked to this one woman, Rachel, a woman from Michigan, we're only using her first name to protect her family's privacy. And when her teenage son desperately needed inpatient help, the family was repeatedly

denied insurance coverage for her son's care for various reasons. So at the time, she was spending $12,500 a month for a therapeutic school, not something she could do for very long, having spent, you know, easily a quarter of a million dollars by that point on his care. All of our savings is gone. How are we going to send our kids to school? How are we going to, like, how are we going to recover from this? I don't know. Those thoughts in your mind, like, there's no space for that when you are just trying to keep your child alive. And Rachel says she likes to point out that she is a woman of privilege in many ways. She had insurance. She had savings. But now she's saddled with this debt and debt that creditors wouldn't even classify as medical debt, right? Because like smaller debts out there that can be still

upsetting. I think you guys have a particularly infuriating story about a young woman who was haunted by this small debt. Yeah, we met Edie Adams during our reporting as well. She's a medical student down in Texas. But when she was an undergraduate in Chicago, she was sexually assaulted and went to the hospital and underwent a medical exam. And she sort of moved on with her life. And then a couple of years later, she gets out of the blue, a call from a collector saying she owes like $131 for this rape kit that she had gotten after the assault. And she tried to explain that a lot of states have laws that bar medical providers from charging rape victims. And the medical collector, you know, said, okay, we'll put this in the file.

And that was that. And then, you know, six months later, Edie would get another call. And so it just kept getting like passed around. And no one ever actually did the thing where they made it go away. They just made it go away for them, not for me. And so basically, these calls just kept coming and coming. For years, she would plead with people

to take this debt off of her record. But she said it was basically like being forced to relive the worst day of her life because this $131 debt just wouldn't go away. This happened like when I was at work, when I was in class. It happened while I was driving once. I like literally had to pull over because I would be like shaking. Yeah. It's just like, I mean, the worst day of your life and then to be chased. You know, we've heard just a small sample, right, of millions of stories of family dealing with crushing medical debt. And the thing about medical debt is it's not like it's necessarily avoidable.

It's not like, well, just don't get sick. You know, just don't get sick. You know, that's kind of, you know, just don't do it. But Yuki, you've looked into a group that has found a way to try to relieve some people of this debt. Yeah, that's right. I mean, and as you mentioned, like people don't get into this debt by choice, and they often don't have any preparation. And yet there are not a lot of

places for individuals to get help, you know, to navigate this. There's no government program, for example, that helps people sort of once they're in debt to navigate that process. But there are some nonprofit groups like free legal aid groups in states and stuff like that. I also found a couple of others, like one called Dollar Four, that's F-O-R. Dollar Four helps people try to qualify for financial assistance at hospitals. And then I found another group called RIP Medical Debt. And this group, it sort of was stood up to help people once they're sort of mostly in the collections process, you know, already incurred the debt. And RIP medical debt has this clever way of getting rid of bad medical debt, often thousands of patients at a time. So it's like the opposite of just helping each individual.

RIP sort of identifies debts held by lower income people. And then they buy that up at about 1% of its face value. And then instead of turning around and trying to collect on those debts, they just forgive it. And they simply erase it, often thousands of loans at a time. You know, if you're in debt, you can't apply and you can't ask for their help. You know, they just kind of buy the loans that they're able to buy that meet their requirements. And they're funded by donors, a lot of small individual donors, but also billionaire philanthropist Mackenzie Scott, among others. And at the time that our story aired, they had retired $6.7 billion and helped 3.6 million people. But they've since doubled the number of people that they've helped. And with additional donations, they've now retired $10.4 billion worth of debt. So when you say that they just forgive

the debt, like it's just, it's just gone. They're not calling anymore saying you need to pay this. You're not getting those mean letters in the mail. It's gone. It's gone. Yes. I mean, it sounds kind of too good to be true, which is exactly the reaction that a beneficiary named Terry Logan I talked to described. You know, she'd had a complicated birth about 15 years ago, and she'd been a math teacher at the time. She incurred debt she couldn't pay and was hounded by creditors until out of the blue in 2022 when she got some yellow letters from RIP Medical Debt saying they'd done away with the debt for her. Wait, what? Who does that?

By that time, you know, she'd suffered a lot from all those years about worrying about the debt. Oh, man, it was tough. Like, every day was tough. Every day I'm thinking about what I owe, how I'm going to get out of this, especially with, you know, the money coming in just not being enough. So relieving that debt didn't just liberate her financially. how I'm going to get out of this, especially with, you know, the money coming in just not being enough. So relieving that debt didn't just liberate her financially. She really described how it liberated her soul. But, you know, the thing is that these individual acts of charity, inspiring as they are,

they're not going to solve this problem. In our current system, even if you have health insurance, there are limits. Yeah, I mean, it seems like this is definitely a systemic issue. I just wonder, why is it like this? I mean, I think a lot of people end up asking exactly that question, Ayesha. And the reason is kind of the unique and really messed up way that we organize our health insurance in this country. One thing that's happened to health insurance in America over the last 20 to 25 years is that it's fairly dramatically changed where people who did have health insurance used to have most of their medical bills covered. If you didn't have health insurance, that was something else, and that was a huge problem.

But what's happened is that more and more people have ended up in high-deductible health plans that don't cover thousands of dollars of their bills. And if you have a $2,000 or a $3,000 bill and you only have $500 in your savings account, it doesn't take a Nobel Prize in economics to realize that you're going to end up in debt. only have $500 in your savings account, you know, it doesn't take a Nobel Prize in economics to realize that you're going to end up in debt. Even if we buy up all the debt that's out there and

retire it tomorrow, the cycle is going to start all over again as long as health insurance doesn't protect people financially when they get sick. We have started to see the federal government and some states take some action on medical debt. Can you tell us about some of those changes? So yes, the Biden administration has stepped forward and the Consumer Financial Protection Bureau, which was this agency created after the 2008-2009 financial crisis, has talked about extending some protections for people from the worst kind of excesses of medical debt collection. So for example, the CFPB is talking about taking medical bills off of people's credit

scores, which could be really, really consequential in helping people rent apartments, get jobs, et cetera. We've seen states like Colorado and Maryland and New York step forward and try to put an end to things like hospitals putting liens on people's homes or garnishing their wages or trying to make sure that hospitals do a better job of identifying patients who need help before suing them. the case, as things slowly change, what can people do to protect themselves? Are there any tips for preventing or paying off medical debt? Yeah, I mean, a couple of top level points that I heard very frequently is, you know, to the extent possible, before you get care, do some research and ask questions so you will know what the care will cost you. You know, what does insurance cover? Will it cover all the services you need to get?

You know, does your hospital or health system offer any financial assistance? The charity care I mentioned earlier. You know, you don't have to be living below the poverty level to qualify for many of those programs. You can apply for that assistance regardless of your immigration status. And even if it's after you've had the care, you know, their advice is seek financial assistance. And then the other major point is just to self-advocate. You know, every single person who works with consumers told me that they tell patients just keep arguing your case.

You know, don't take no for an answer. If you're turned down for charity care, try again. Or ask if you can get a discount on those services anyway or be put on a payment plan. But absolutely self-advocate. You know, medical bills are far more negotiable, I think, than most patients realize. You know, there are billing errors. Maybe you were overcharged or should have been considered for financial assistance in the first place. Noam, do you have any last thoughts like we should be considering when it comes to medical debt? Yeah, you know, I mean, I just think this problem is so big and it's going to require some pretty big changes in order to better protect

people, I think. But, you know, one of the things that I think is important is for people to speak out. There's a lot of shame associated with medical debt, and people don't want to talk about it. But I sort of feel like hospitals and doctors and insurance companies and drug makers and the people who run this system, and in many cases are making a lot of money in this system, I feel like they need to be confronted by what this system is actually doing to people on a daily basis. It's eroding their housing security. It's making it difficult for them to get food. And

that's not going to change unless we sort of speak up and patients speak up and talk about what's happening. Because, you know, it's not what a health insurance system should be doing, frankly. I want to thank both of you for being here today and sharing some of your reporting on this issue that impacts so many people. Thank you. Thank you, Aisha. This episode of The Sunday Story was produced by Andrew Mambo, and it was edited by Jenny Schmidt and Jane Greenhalgh.

The engineer for this episode was Maggie Luthar. Our team includes Liana Simstrom, Justine Yan, and Irene Noguchi is our executive producer. We always love hearing from you, so feel free to reach out to us at thesundaystoryatnpr.org. I'm Ayesha Roscoe. Up First is back in your feed tomorrow with all the news you need to start your week. Until then, enjoy the rest of your weekend.