I’ve written about medical debt in the past, explaining that not all medical debt is bad. However, medical debt is growing due to Obamacare. I’ve also explained that medical debt has many causes and it’s not always a lack of money. People sometimes refuse to pay because they think their bill is wrong (it often is). Or patients don’t pay outstanding bills because they believe their health plan is liable for the balance. This is just my opinion, but I suspect some outstanding medical debts are because patients think the bill is unfair. That reminds me, I wonder if the Georgia hospital that billed a lady $700 for her 7-hour wait in the emergency room ever got paid? She left the ER without being treated after waiting seven hours and was later billed $100 an hour for every hour she waited.
Some hospitals are more aggressive than others at collecting medical debt, placing liens on houses and harassing patients for payment. A lot of poor people should qualify for charity care, but hospitals don’t screen them for charity care unless patients know to ask. It’s a Catch-22 of sorts. To qualify for charity care you have to apply in advance. If you apply in advance, you’re less likely to receive care of any kind. Just imagine, you’re sitting at the admissions desk and you inquire about free or reduced-cost care. Do you really expect the hospital to admit you if you let them know you’re a charity care patient?
Hospitals work with medical finance companies that sometimes saddle patients with medical charge cards at exorbitant interest rates. Arizona capped the interest rate that can accrue on past medical bills. It’s not clear how the new law affects companies like CareCredit. There is even a nonprofit organization that buys medical debt and discharges it. The going rate is a penny on the dollar. I wonder if more patients would agree to pay if the hospital offered them a deal, say, 25% of the bill rather than waiting and selling it for $0.01.
Four hospitals in Columbus, Ohio area are working with city officials to erase nearly one-third of a billion dollars of medical debt.
Mount Carmel Health System, Nationwide Children’s Hospital, OSU Wexner Medical Center and OhioHealth are collectively writing off $335 million in debt for care received between 2015-2020.
Columbus residents are eligible if they earn between 200-400% of the federal poverty line — $55,500-$111,000 for a family of four, city leaders said.
This is expected to impact around 340,000 local residents, the city estimates, with the average amount forgiven coming to nearly $1,000.
The city of Columbus is contributing $500,000 to help cover the cost of verifying eligibility and mailing letters to those affected. Is this a grand gesture of benevolence? Not really.
Health care providers may have been more inclined to erase this debt, which ranges from three to eight years old, because it may have been difficult to collect at this point, Dorans speculates.
Basically, you have 340,000 people with outstanding debts ranging from three to eight years old. The average debt is less than $1,000. Therefore, the average debt is worth less than $10 if sold to collection agencies. Indeed, many of these outstanding debts may be worth nothing. The cost of debt collection letters is probably more than $1 for every mailing. In other words, the four Columbus hospitals will derive far more benefit from the favorable publicity of writing off the debts than if they continued to try to collect. Moreover, the hospitals are getting $500,000 in city money to promote this public relations initiative. Both the hospitals and the city will take credit.
What is bogus about this plan is that it had to go this far. Hospitals should have been working with their customers all along, rather than waiting three to eight years and pretending it’s a community service. Notice that debts less than three years old are not eligible because the hospitals still hope to collect something from them.
Read more at: What to know about Columbus’ plan to wipe out millions in medical debt
Pity the US government can’t likewise forgive 1/3 of the national debt.
I guess mainly because they don’t have a sugar daddy to pay them for the debt they are “forgiving”. Maybe like the Columbus hospitals have with the City of Columbus. Or maybe like the Columbus hospitals have with private insurance plans they overcharge to cover some of their Medicare and Medicaid losses?
I would be more in favor of a forgiveness plan that focused on any debt that exceeded 10% of a family’s annual income.
So if a family earned $50,000 a year, the forgiveness would only apply to debt amounts over $5000.
It is kind of nuts to be forgiving debts of $500 for families which have easily enough income to pay it off. Heck, many families owe that much to their dentist, or owe that much to the garage that fixed their car.
Granted, my program would take much longer to implement, but at least it would make sense.
Devon made the accurate observation that many medical debtors think that their bills are unfair, and thus are very, very slow to pay them.
This is especially true for emergency room and ambulance bills. In virtually all cases, the medical care is not freely chosen and the patient has no choice about how much cost to incur.
I can see where the hospital or ambulance company is coming from. If their service costs a total of $1 million a month to provide, and they have 100 ‘customers’ in a month, then technically they need to collect $10,000 from each patient. That is roughly how they compute their chargemaster bills.
The root cause of public anger — in my opinion — is that people expect the emergency room to be like the fire department or police department. You call them when you are helpless and in trouble, and they spare no expense in rescuing you.
Fire and police departments are paid for collectively, not by an itemized bill send to each customer. Any of us who had a fire would owe the fire department $10,000 if it were not for public funding.
I hope I am not being too long-winded here, but bottom line I think that emergency medical services should be publicly funded. It would not break the national bank either.
The City of Columbus will send a single-parent Mother employee with ovarian cancer who is too sick to work a COBRA notice of $2,708 per month with United Healthcare. The rates are online for all to see. President Trump’s low-cost Short-Term-Medical (STM) for a 30-year-old Mother and son is $92 per month in Columbus. My friend Barbara who is President of the Iowa Federation of Republican Women said, “Someone is taking advantage of the people of Ohio!” She is an Iowa business owner in Cedar Rapids who is an economist by training, like you Devon. However, she is smarter because she is an owner instead of a W-2 employee like YOU.
She says, “Why do I have to buy employees’ insurance? It’s just a fluke of WW-2!”
The cost for Obamacare in Columbus for this single-parent Mother and child is $463/month with a $9,100 per person deductible with a dangerous and deadly Blue Cross HMO that pays NOTHING going to the Cleveland Clinic, voted BEST Hospital in the World by Newsweek.
Of course Trump’s low-cost STM utilizes the Cleveland Clinic as a Member Hospital for $92/month for family coverage.
Barbara is PISSED because both owners and employees on a small employer Iowa Blue Cross GOLD PPO who become too sick to work end up on Obamacare low-quality Hillary-style HMOs with ultra-skinny provider networks. The end of the line. EXACTLY, like Texas, right Devon?
Ron, I do not think you should quote Obamacare policies without also disclosing the income-based subsidies.
In this case, the premium of $463 a month for an Obamacare HMO with a $9,100 deductible is absolutely accurate — as far as it goes! However — If the lady in this example has an income of $50,000 a year, her premium after subsidies is $68 a month.
If she wants a zero-deductible policy, her net premium with Obamacare is $212 a month.
You’ve got to quote the net! (assuming that the insured discloses their income, which most people will).
Excuse me, the Cleveland Clinic is voted 2nd BEST Hospital in the world and not 1 Obamacare plan in Ohio can use the Cleveland Clinic. A guy who takes his wife to the Cleveland Clinic and is on low-rent Obamacare in Ohio will get ZERO! Surprise Billing, right Devon?
These crazy wives with cancer that want to go to the MAYO, Cleveland Clinic, or MD Anderson Cancer Hospital when they are on DEADLY Obamacare have their PRE-AUTHORIZATION say – NO! These priviledged babes who think they should live can’t use the BEST — Doctors who speak English — What part of NO is hard for them to understand?
Ron, I looked up the Pivot Health STM rates for this case.
If the Trump STM plan is similar, then what this lady gets for $92 a month would be a $10,000 deductible plus coinsurance that could total another $10,000 on a big claim.
Plus, if she has had any consultations with a doctor on a possible cancer, the STM insurer could deny a cancer-related claim.
STM is good for very healthy people, but I think it needs a lot of caution.
Bob, the same 2 companies that dominated the tax-free MSA market in Individual Medical (IM) are the same 2 companies that dominate the STM market in America and it isn’t Pivot Health, get real Bob. It’s United Health Care, the largest insurance company in the world and Allstate, an American financial powerhouse with AM Best A+ ratings of course. Bob, the coverage is HSA Qualifying and I NEVER quote a rate above the $10,000 deductible then 100% coverage because Obamacare 2024 deductibles are $9,450 per person if those DEADLY HMOs pay anything.
Blue Cross in Illinois Obamacare has a PPO exactly like Oklahoma, they own both states and Texas Blue Cross. In OK and IL Blue Cross PPO has a $18,200 deductible if you go out-of-network and then only pays 50%. WHO can afford that? cheaters…defend them Bob.