The rise of medical debt
The cost of medical care has become more of a hot-button issue after former UnitedHealthcare CEO Brian Thompson was targeted and killed in a brazen attack on the streets of New York in December.
Americans are becoming increasingly frustrated with — and critical of — a prohibitively expensive healthcare system that relies on insurers, which in turn may have high deductibles or deny coverage altogether.
And childbirth is just one example of something that can get really expensive, really quickly. Having a baby in the U.S. costs an average of $18,865 (including costs associated with pregnancy, childbirth and postpartum care), according to the Peterson-Kaiser Family Foundation Health System Tracker. And the average out-of-pocket payments (at least for women enrolled in large group plans) is still $2,854 — which doesn’t account for any complications. If your baby ends up in the NICU, your bill could skyrocket.
One in five postpartum women carries medical debt — even those with private health insurance, according to research published in the Journal of General Internal Medicine. That’s because private insurance often comes with high copays, insurance deductibles and uncovered services.
Medical debt can cause families to delay homeownership and prevent them from saving for their child’s future education or their own retirement.
Hernandez is a stay-at-home mom. While her husband has health insurance through work, they still have to pay a hefty deductible of around $5,000. Medicaid pays for about 41% of U.S. births, but they don’t qualify for Medicaid, as her husband makes $100 above the poverty limit. So, in the meantime, Hernandez is racking up medical expenses on her credit card.
“I’ve built up insane amounts of debt paying for all my high-risk pregnancy appointments and her specialty care appointments now that she’s born,” she told Newsweek. “I’ve just been paying with credit since we can’t afford all the appointments.”
Fortunately, a new ruling finalized by the Consumer Financial Protection Bureau is banning medical bills from credit reports. This ruling is intended to protect consumer privacy, while preventing debt collectors from using credit reports to coerce payments from patients.
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Hernandez said that while she was in the hospital, no one talked to her about the additional costs for the NICU, nor did they offer any options for financial assistance. While it would have been worth talking to her doctor and health insurance provider ahead of time about the costs of giving birth, she still has some options after receiving the bill.
According to Health Affairs, hospitals have fixed prices for services, but they can be marked up to maximize revenue. An insurance company may have an “allowed amount” for the hospital service, and the policyholder would pay the deductible.
This is the case for Hernandez, but the $5,000 deductible is still steep. So, she could ask the hospital’s billing department if they offer financial assistance, something Time Magazine says is sometimes even available to those with incomes above the poverty limit, like Hernandez’s husband. If she were paying the hospital directly, she could potentially set up a low- or no- interest payment plan, too.
It’s worth her time to go through the hospital bill — line item by line item — and look for any weird charges or mistakes. Americans carry roughly $88 billion in medical debt based on consumer records, according to a report from the Consumer Financial Protection Bureau. So she should be sure the charges are valid — and raise questions about the procedures she’s unsure about.
She can talk to her health insurance provider, too. If she’s able to get financial assistance from the hospital, she can see if that affects her balance with her insurance company in any way.
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