Tags: NerdWallet | healthcare | debt | medical

NerdWallet Survey: Americans Increasingly Burdened By Medical Debt

By    |   Thursday, 09 October 2014 02:49 PM

Despite the Affordable Care Act's efforts to reduce medical costs, Americans are becoming financial ill from their unpaid medical bills, according to survey by NerdWallet Health.

Americans are more burdened by medical debt than any other type debt, the NerdWallet research reveals. They pay three times more in third-party collections of medical debt than bank and credit card debt combined. Approximately one in five American adults may be contacted by a debt collection agency about unpaid medical bills this year.

In 2013, 38 percent of debt collected from consumers was for healthcare, the largest category by far, equal to student loan debt and credit cards and other financial services combined.

A previous NerdWallet study reported that medical debt is the largest cause of personal bankruptcy.

Even more disturbing, the current study shows, is that consumers are consistently overcharged due to rampant billing errors.

None of the hospitals audited by the Office of the Inspector General last year were fully compliant with Medicare medical billing requirements.

"All of the audited hospitals overcharged Medicare and were ordered to repay the government, raising important questions about the magnitude of errors and overcharges imposed on consumers," the report states.

The online survey, conducted by Harris Poll in August among 2,016 adults, found that 57 percent of the consumers polled have received medical bills that confuse them, 63 percent say they've received medical bills that cost more than they expected and 73 percent agree they cold make better health decisions if they know the cost of medical care before receiving it.

"The medical system is a minefield for the average consumer," says Christina LaMontagne, NerdWallet's general manager of health. "While expenses mount for households, bills are riddled by a shameful number of hard-to-detect medical billing errors."

The Affordable Care Act's individual mandate and changes to FICO score calculations have helped decreased the strain on those holding medical debt, NerdWallet says. But consumers should not expect relief for their medical debt troubles.

A Bankrate.com survey reveals that a quarter of Americans have more medical debt than emergency savings. Most (55 percent) worry they will find themselves overwhelmed by medical debt.

"This is an issue that affects consumer confidence and the broader economy," says Bankrate.com insurance analyst Doug Whiteman.

Plus, 55 percent worry that they will not have affordable health insurance in the future.

"This might suggest that many people are either uninformed about the exchanges or lacking confidence in the Affordable Care Act," Whiteman adds.

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Despite the Affordable Care Act's efforts to reduce medical costs, Americans are becoming financial ill from their unpaid medical bills, according to survey by NerdWallet Health.
NerdWallet, healthcare, debt, medical
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2014-49-09
Thursday, 09 October 2014 02:49 PM
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