Ellen Andrews avatar

Having health insurance is no longer the protection it used to be. A pair of new studies shine a bright light on inadequate insurance and its consequences – medical debt. 

Patients who can’t afford their growing share of medical bills avoid getting needed care and shift that debt to credit cards, second mortgages, or just can’t pay it. In a new study, researchers found that medical debt is linked to lack of food, inability to pay utilities or rent, and eviction or foreclosure causing a downward spiral of ill health and economic insecurity. 

Connecticut households are not immune from this burden. Policymakers need to address skyrocketing healthcare prices, especially for hospital care, to provide relief for families and our state’s economy.

Using better data, a new study found that 11% of American adults have outstanding medical bills and the average debt is far higher than in previous studies. Surprisingly, the study found that middle-class households are the most likely to have medical debt and the burden falls hardest on Black and brown communities. Only Americans with the highest incomes and education are safe. But people with disabilities are at the highest risk of all Americans, more than twice as likely to carry medical debt and the debt averages $15,000 more than debtors without a disability.

While the uninsured are at highest risk of medical debt, thankfully rates of uninsurance are down dramatically since the Affordable Care Act, both in Connecticut and across the US. But the study provides evidence for what advocates are hearing from consumers, that increasingly common high deductible plans are to blame. Over half of Connecticut residents with private insurance had a high deductible plan in 2020. Patients covered by high deductible plans are a third more likely to have medical debt and their debts average $4,000 higher than people without high deductibles. Advocates will also not be surprised to learn that people covered by Medicare Advantage private insurers are 37% more likely to have medical debt than beneficiaries with traditional Medicare and supplemental coverage.

Another new survey found that one in four working-age Americans have inadequate insurance that doesn’t make care affordable. Half of American adults would be unable to pay an unexpected $1,000 medical bill within 30 days.

While residents of states like Connecticut, which chose to expand Medicaid under the Affordable Care Act, are less likely to carry medical debt, many residents of our state are carrying this burden. For 65 years, the Brainard Fund has been paying medical bills for people of “modest means” in the Hartford area. Nelson and Elsie Brainard set aside $2 million in 1957 to cover unaffordable bills for care of chronic, serious medical conditions. Thankfully that fund has grown to $15 million, while paying bills every year. Between 2018 and the middle of this year, the Brainard Fund spent $2.5 million covering 175 applications for assistance averaging $14,014 each. Almost all the funds have been paid to hospitals. 

Staff at the Hartford Foundation for Public Giving, which operates the Brainard Fund, say that 86% of their patients last year had insurance, but it didn’t cover their needs. According to Megan Burke from the Foundation, unaffordable healthcare is “impacting people across the spectrum, but disproportionately people of color.” They find that most applicants “have jobs with inadequate coverage and they aren’t paid enough to keep up.” Anyone in the Hartford area needing assistance or providers who want to help their patients with bills can contact the Foundation.

The first study found that hospitalization is the biggest source of medical debt. This isn’t surprising as hospital prices are the main driver of rising healthcare costs in Connecticut. While charities like the Brainard Fund are working with what they have to fill the gaps, state policymakers need to step up and pass legislation to control medical prices. Mergers of hospitals and provider practices into massive health systems allow those monopolies to drive up prices without restraint. 

This year a bill overwhelmingly passed the Senate that would have limited large health systems ability to jack up prices by prohibiting anti-competitive contract clauses. Two lawsuits have been filed against Hartford Healthcare over these clauses. But the bill died on the House calendar. Policymakers must use every lever they have to keep costs down to make healthcare affordable and provide relief to struggling Connecticut residents.

More from Ellen Andrews

Ellen Andrews, Ph.D., is the executive director of the CT Health Policy Project. Follow her on Twitter@CTHealthNotes.

The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com or any of the author's other employers.