Paying off people's medical debt has little impact on their lives, study finds
nytimes.com
nytimes.com
Where the problem comes from is that people put off procedures that are necessary because they are afraid of the debt. Those people never get the debt that has to be paid off to begin with, so they wouldn't be a focus of the study. That being said, they're at the very least more miserable because they're not going to the doctor to get treated. They could also be less productive, develop more expensive conditions, or die.
there isn't a singular problem in a country where your credit score can dictate the quality of your future.
Yes, you should put out the medical fires first, but to pretend that it's smooth sailing afterwards is to be blind to half of the issue.
How I understand several of these groups (I'm not certain of the one in the article) do these debt purchases is that they purchase debt that has already been bundled together and resold. So when a person owes medical debt to a hospital, a doctor, a surgeon's practice, a pharmacy, etc, they may owe 15k in total, and these buybacks only cover one resold debt, they may have their hospital debt forgiven, for example, but still own 10k in total to the 3 or 4 other creditors.
Contrast that to a mortgage debt, for example, where paying off the mortgage relieves all anxiety around that debt, and I can see how the difference in complex, multi-creditor debt versus simpler, singular-creditor debt could help address the findings of this study.
Paying off your medical debt might improve your credit score over a long period of time, assuming you have other things going for you in that area. People who are worried about becoming homeless generally do not give a single shit about their credit scores. Having good credit one day is an aspirational thing for probably the majority of humans, closer to the 'optional' upper layer of Maslov's model.
No one's buying houses, no one needs to buy a car on credit, etc. Credit score is highly overrated, no?
i've known home-owners that can't get financed for things like air conditioners because of medical debt -- and they were home owners -- and large appliances like that constitute large purchases espescially for those on fixed incomes; this essentially means there is a group of people that own homes, , likely retired so they're working on a fixed income and could surely use the flexibility of finance options, need to finance the repairs, and can't because of unrelated medical debt.
Credit checks and score can also affect insurance rates. A bad score can also prevent job candidates from being hired for some jobs in some industries.
>No one's buying houses,
Even in scenarios of not buying a house... e.g. Getting a new loan on a primary home via re-financing an existing mortgage or taking a 2nd mortgage requires a good credit score.
Even if one is not getting a home mortgage, renters can be denied from leasing apartments because of credit score.
I was able to rent an apartment, but it cost me a few non-refundable application fees first and had to take a less-desirable apartment.
A poor credit score will also cost you when it's time to buy a car. You need to buy a new car? Unless you can pay cash, borrowing money is going to cost you more because you have a bad credit score.
* One of the many ways that being broke is a self-perpetuating cycle. You have little money, so you have to cough up deposits and tie up what little money you do have trying to secure services and a place to live. Some of that money you will get back - eventually - some of it (rental deposits) there's a good chance you'll never see again or only see some of. (Obligatory mention of Vimes' Boots theory...)
And more realistically, more people than ever will never be able to afford to own a home.
https://www.fico.com/blogs/medical-collection-removals-have-...
In general in the US, life saving or emergency medical care is administered without regard for the patient's ability to pay. Hospitals are already subsidized or compensated in various ways for this. The real issue is preventative or precautionary care. If Americans had that for free, like with the NHS, there would be fewer $XXX,XXX debts later in life.
Is this before or after it has been sold to collection agencies?
If it’s before, that’s kind of amazing. But if it’s after then the hospital billing departments often sell this debt to collection agencies for cents on the dollar.
Paying off $11B in the past 10 years is more of a transfer of wealth to the collection agencies.
I’m honestly not surprised paying off the medical debt doesn’t help.
Seems more like $100M paid to hospitals in exchange for writing off $11B.
$100M over a 10 year period doesn’t make the headlines though :(
I imagine RIP reports in face value of the debt purchased. It sounds better.
https://en.wikipedia.org/wiki/List_of_countries_with_univers...
This is an utterly irrational statement. If you don’t have medical insurance, you are just as unlikely to seek out medical care with medical debt as you are without it.
This statement is just as rational as saying, “those who cannot drive but who had their car loan paid off were just as likely to still not drive as those who could not drive and had no car loan in the first place.”
I'd read that article in conjunction with https://www.nytimes.com/2024/04/07/us/health-insurance-medic...
...which outlines exactly how insurance companies can just sort of decide...not to pay your medical bills, and leave patients with huge debt.
"For providing outpatient substance abuse treatment, the facility received $134.13.
(Fee for Cigna) For processing the claim, Cigna received $658.75, nearly five times as much as the treatment center.
(Fee for MultiPlan) For recommending a payment amount, MultiPlan received $167.48, slightly more than the treatment center."
The US can't "just" do anything because the political system is completely deadlocked. It's not really like well-functioning democracies where a coalition can win an election with a particular set of proposals for reform and then get those implemented.
Not disagreeing. Actually, the Republican party these days is capable of gridlocking itself. I've never seen such a high level of dysfunction -- enough so that I suspect we are living in some transition period, although what we are transitioning to I am uncertain. I don't think the current Republican party is stable.
sure, it can crumble economically etc but that's a lot slower process and gives plenty of time to materialize the spin.
We don't trust the government to manage it appropriately and will instead use that money for vanity projects or to line the pockets of whoever is running that program.
Then for the people, we consider "failures" such as debt, homelessness, etc as moral failures, rather than failures of the system. The leading thought is "Why are MY tax dollars paying for someone else's knee surgery? They should have planned properly!"
Any change to this system will require a societal shift within America which isn't going to be happening anytime soon, if ever.
This is a very bad faith take on what groups opposed are saying and I don't even agree with them. You don't need to do this to effectively argue against this stance.
[0]https://www.bostonreview.net/articles/jonathan-m-metzl-dying...
Tying into personal experience. When I paid for my mom's knee surgery which left her wheelchair-bound for 2 months afterward, I had many proudly conservative family members ask me why I would do that. The knee surgery was to help with damage done from obesity (which she had beat before the surgery and is now at a healthy weight). I was told that I was rewarding her "bad" behavior. That she needed to suffer the consequences of her actions. That her health is not my responsibility.
All of those statements reflect my earlier statement of American individualism and our belief that these issues are moral failings, rather than societal failings. This individualism runs so deep in our society that a son is chastised for helping his mother.
I think the rest of your point, about Americans in general not trusting the government to do things efficiently or competently, is true though.
This one kills me. This is almost literally the definition of insurance.
Because a job "with benefits" is a badge of honor. Because the "gubment" is wasteful. Because people believe people will scam any system like that (although most people who think this assume it's "certain" people who do the scamming and can't be bothered to realize it's people like Rick Scott who do the scamming.).
Did the rule change that it can no longer show up regardless of timeframe on a credit score? I believe in the US it used to be 1 year after being overdue.
Anyhow, given that it now no longer shows up, what's the point of paying it?
The non-reportability is a recent change. Also, if the provider sues, whether it’s on your credit report is irrelevant.
Strongly disagree. Being able to take your time to pay a debt when in a cash crunch without worrying about the long-term impacts on your credit is material.
Secondly, it's still a legal debt. That means the billing department will employ escalating collection tactics for large debts where they believe the debtor has sufficient assets.
There is a chance of follow up, and some healthcare providers do. You can be taken to court and forced to pay or declare bankruptcy if you can't.
While the US does legally require some medical care regardless of ability to pay, that's mostly for life sustaining care; healthcare providers to which you owe a large debt may decline to provide healthcare when not legally obligated. That can be a big deal or not depending on your available providers and their policies.
If you can't get a price for a service upfront, then you can't know whether or not you can afford that service. And if your life literally depends on that service, then what is the elasticity of demand? The stakes aren't always so high, but sometimes they are, and even in low-stakes situations, like trying to get an x-ray, no one can ever tell me what it's going to cost; they look at me like I'm stupid for asking.
One small example - my dermatologist always mentions the cost of procedure or medication, at least in very general terms (X is available as a generic, or procedure A costs more than B). She can't get into details, since that's all negotiated on the back end and obfuscated behind my copays and deductibles. But, it's better than nothing.
https://web.archive.org/web/20240408130708if_/https://www.ny...
The question we need to ask is what would have been their mental and physical health if we never had saddled them with it to begin with.
And businesses get to do this all the time for bad business ventures. Why can't people do it because of no fault of their own? Sometimes bad things happen to good people.
Regardless, the US medical system sucks. If any other industry was run like our current medical system, it would be torn down in a heartbeat by Congress. But there is too much money moving around and those in charge love them some money.
Unfortunately, as someone who works with the disabled community, that's not always the case. Plenty of folks need constant medication, live in care, support devices that wear out, or other high cost consumables.
Agree though, our health care system is terrible.
How this was somehow my fault or problem was ridiculous, so I simply didn't pay the bill. They turned it to collections, I started getting calls, but I never across years pick up calls from random people on my cell anyways. They eventually sell off to other vultures that try, and get the same. Then at some point they just stop bothering.
What impact did this have on my credit? Absolutely none perceptibly.
Since then I make a habit of not paying these when they arise, and let them bounce off a combination of call screening and my ignoring phone calls anyways. If I'm part of the problem, they're the perpetrators of the problem to begin with, and still get rich regardless, so why feed the beast?
The whole medical industry and bottom feeders that surround it like collections are just fuct in the US. The industry and governments do nothing to fix it, so why play the game fair.
Don't write off the poor as broken, help them achieve to their ability. Most poor folks aren't poor because of bad choices, they are poor because of systemic issues that make life harder and more expensive. If we lift these people out of that hell scape, they'd be able to do so much more.
my bank, for instance, would reorganize my deposits and debits to maximize overdraft fees. I would put cash in, then go use my debit card later in the day, but the debit would process first. Then I would overdraft, then the cash would be applied, then the next purchase would overdraft. Despite the first operation being putting cash in the bank that would cover. My bank also had a 0% interest rate on my savings account because "we made a mistake".