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Medical Debt Among People With Health Insurance

Introduction
  1. Kaiser Family Foundation analysis of 2012 National Health Interview Survey (NHIS) data.

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  2. Kaiser Family Foundation, “Health Security Watch,” June 2012, at http://kaiserfamilyfoundation.files.wordpress.com/2013/05/8322_hsw-may2012-update.pdf

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  3. The organization was called CredAbility when research began, but merged with ClearPoint Credit Counseling Services as of January 1, 2014.

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Incidence of Medical Debt
  1. That is, they answered “yes” to any of the three survey questions about problems paying medical bills over the past 12 months, over time, or at all.

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How Does Medical Debt Become a Problem for People with Health Insurance?
  1. Kaiser Family Foundation 2013 Employer Health Benefits Survey. Available at: http://www.kff.org/private-insurance/report/2013-employer-health-benefits/

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  2. Anna Sommers and Peter J. Cunningham, “Medical Bill Problems Steady for U.S. Families, 2007-2010,”  Center for Studying Health Systems Change, December 2011.

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  3. See for example, Schoen C, Doty MM, Robertson RH, Collins SR. 2011. “Affordable Care Act Reforms Could Reduce the Number of Underinsured US Adults by 70 Percent.” Health Affairs 30(9): 1762-1771; also Banthin JS, Cunningham P, Bernard D. 2008. “Financial Burden of Health Care, 2001-2004.” Health Affairs 27(1): 188-195.

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  4. For PPO-type group health plans, the average annual deductible is $799 and the median annual OOP limit is between $2,000 and $2,900.    Cost-sharing levels under HMO-type group plans tend to be somewhat lower.   See Kaiser Family Foundation 2013 Employer Health Benefits Survey.

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  5. See for example, http://www.ehealthinsurance.com/ehi/NewGlossaryHelp.ds?entry=faqId=HGLA;categoryId=HGL1-1-49;entryId=1  or  http://www.marylandhealthinsuranceplan.net/mhip/attachments/BOK5291_12_13.pdf

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  6. Ha Tu, Genna Cohen, “Financial and Health Burdens of Chronic Conditions Grow,” Center for Studying Health Systems Change, April 2009, at  http://www.hschange.com/CONTENT/1049/

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  7. High financial burden is defined as spending more than 5% of income on premiums and out-of-pocket medical bills.  See Peter Cunningham, “Chronic Burdens: The Persistently High Out-of-Pocket Health Care Expenses Faced by Many Americans with Chronic Conditions, Commonwealth Fund, July 2009, at http://www.commonwealthfund.org

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  8. Kaiser Family Foundation 2013 Employer Health Benefits Survey.

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  9. Paul Ginsburg, “Wide Variation in Hospital and Physician Payment Rates Evidence of Provider Market Power,” Center for Studying Health System Change, November 2010, at http://www.hschange.com/CONTENT/1162/

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  10. Dyckman and Associates, Survey of Health Plans Concerning Physician Fees and Payment Methodology, August 2003, at http://www.medpac.gov/documents/Aug03_PhysPaySurvey(cont)Rpt.pdf

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  11. Chad Terhune, Medical Bills You Shouldn't Pay, Business Week, Aug. 28, 2008.

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  12.   Jack Hoadley, Kevin Lucia, Sonya Schwartz, “Unexpected Charges: What States Are Doing About Balance Billing,” California Health Care Foundation, at http://www.chcf.org/~/media/MEDIA%20LIBRARY%20Files/PDF/U/PDF%20UnexpectedChargesStatesAndBalanceBilling.pdf

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  13. See www.multiplan.com.  This national, independent PPO contracts with about 800,000 providers, then with health insurers to complement their plan networks through national and regional PPO networks.

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  14. 25 CFR Parts 146 and 147, at Federal Register, Vol. 78, No. 219, November 13, 2013.

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  15. Scott Ramsey, et al, “Washington State Cancer Patients Found to be at Greater Risk for Bankruptcy then People Without a Cancer Diagnosis,” Health Affairs, 32, no. 6, (2013): 1143-1152.

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  16. Thomas Chirikos, et al, “Indirect Economic Effects of Long-Term Breast Cancer Survival,” Cancer Practice, 2002; 10(5) 248-255.

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  17. Kaiser Family Foundation, “Coverage of Colonoscopies Under the Affordable Care Act’s Prevention Benefit, August 31, 2012.

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  18. Kaiser Family Foundation, “National Survey of Consumer Experiences with Health Plans,” June 2000.

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  19. Brian Elbel and Mark Schlesinger, “Responsive Consumerism: Empowerment in Markets for Health Plans,” The Millbank Quarterly, Vol. 87, No. 3, 2009.

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  20. See for example, Healthcare Financial Management Association, “Bad Debt Rising: When to Sell Your Accounts Receivable,” July 2004, available at http://www.healthleadersmedia.com/content/138293.pdf

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  21. Ernst and Young, “The Impact of Third-Party Debt Collection on the National and State Economies,” February 2012.

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  22. Federal Trade Commission, “The Structure and Practices of the Debt Buying Industry,” January 2013.

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  23. Sara Collins et al, “Help on the Horizon” The Commonwealth Fund, March 2011, available at http://www.commonwealthfund.org

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  24. See for example http://www.carecredit.com. The attorney general of New York recently settled a lawsuit with this medical credit card company for using high pressure sales tactics and other lending practices that resulted in low income patients being driven further into debt.  See “GE settles with N.Y. over high-rate healthcare credit card,” Thompson Reuters News and Insight, June 3, 2013, available at http://newsandinsight.thomsonreuters.com/Legal/News/2013/06_-_June/GE_settles_with_N_Y__over_high-rate_healthcare_credit_card/

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Consequences of Medical Debt
  1. David Grande, et al., “Life Disruptions for Midlife and Older Adults with High Out-of-Pocket Health Expenditures,” Annals of Family Medicine, Vol.11, No. 1, January/February 2013.

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  2. Sommers and Cunningham, 2011.  See also, Kaiser Family Foundation Health Tracking Poll, February 2009, available at http://kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-february-2009/

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  3. How Debts in Collections Affect Your Credit, June 28, 2012, available at  https://www.creditkarma.com/article/accounts-in-collections

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  4. LaToya Irby, “10 Side Effects of Bad Credit: How Bad Credit Affects Your Life”, available at:  http://credit.about.com/od/creditrepair/tp/bad-credit-side-effects.htm

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  5. Ameriprise Financial, “Retirement Derailers Survey,” February 2013, available at http://newsroom.ameriprise.com/images/20018/RetirementDerailersResearchReport.pdf

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  6. Jose Garcia and Mark Rukavina, “Sick and In the Red,” October 2010, available at http://www.accessproject.org/adobe/SickAndInTheRed.pdf

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  7. Robert Seifert, “How Medical Debt Undermines Housing Security,” 2005, available at http://www.accessproject.org/adobe/home_sick.pdf.

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  8. David Himmelstein, et al, “Medical Bankruptcy in the United States, 2007: Results of a National Study,” The American Journal of Medicine, Volume 122, Issue 8, August 2009.

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  9. See for example, Cunningham, P and Felland, L, “Falling Behind: Americans’ Access to Medical Care Deteriorates, 2003-2007,” Center for Studying Health System Change, June 2008.  See also Doty, M et al., “Seeing Red: Americans Driven Into Debt by Medical Bills, Commonwealth Fund, August 2005.

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Discussion
  1. United States Census Bureau, “Income, Poverty and Health Insurance Coverage in the United States: 2012,” September, 2013. Available at: http://www.census.gov/prod/2013pubs/p60-245.pdf

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  2. Kaiser Family Foundation, “Quantifying Tax Credits for People Now Buying Insurance on Their Own,” August 14, 2013.

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  3. See Kaiser Family Foundation, Subsidy Calculator, at http://www.kff.org/interactive/subsidy-calculator/.

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  4. Center on Consumer Information and Insurance Oversight, “Summary of Consumer Assistance Program Grant Data from October 15, 2010 –October 14, 2011,” available at http://www.cms.gov/CCIIO/Resources/Files/Downloads/csg-cap-summary-white-paper.pdf

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  5. Under the ACA, premiums that exceed 8% of income are defined as not affordable.  No such definition is established for cost-sharing, although the ACA does limit annual out-of-pocket cost-sharing under health plans generally and, in Exchange plans, provides for cost-sharing subsidies for low-income individuals.

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  6.   See United States Department of Labor, FAQs about Affordable Care Act Implementation Part XII, February 20, 2013, at http://www.dol.gov/ebsa/faqs/faq-aca12.html.  Note that group plans may not impose an additional, separate OOP limit for mental health benefits, even if they employ a separate behavioral health benefit manager.

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