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Why Exposing Evils Of Medical Debt Doesn’t Fix The Problem

The Healthcare Long March.

Connecticut Gov. Ned Lamont proposed on February 2 to purchase and forgive roughly $2 billion in medical debt owed by state residents. Along with similar proposals in other jurisdictions, the plan offers desperately needed relief from stress and fear to thousands of people who are struggling to pay their current outstanding medical bills. Unfortunately, these programs will do nothing to prevent millions more Americans from falling into the country’s healthcare financial meat grinder.

Meanwhile, three major credit reporting agencies have decided to expunge paid-off medical debts and outstanding debt less than $500 from credit reports, and provide people a year’s grace period before adding new medical debt to credit reports.

Like the debt forgiveness proposals, these credit decisions follow a wave of national publicity about the horrors of healthcare debt. In recent years, major news outlets, including the New York Times (e.g., 11/8/19, 9/24/22), Guardian (6/27/19), ProPublica (e.g., 6/14/21), National Public Radio (13/21/22), Kaiser Health News (9/10/19, 12/21/22) and CBS (4/28/21) have dug into the nightmares faced by tens of millions of Americans—both uninsured and with insurance—as they try to pay for the treatments and medicines they need to lead healthy lives.

Compelling and consistent

The stories are heartrending. Families’ lives wrecked financially by bill collectors and lawyers. Sick and injured patients’ health deteriorating due to mountains of debt and stress, with some providers even refusing follow up care until bills are paid. They highlight a set of corporate billing and collections policies and practices that turn a visit to a doctor or hospital into a years-long hell.

Such investigations touch on common themes, including hospitals suing patients en masse:

  • “Ballad, which operates the only hospital in Wise County and 20 others in Virginia and Tennessee, filed more than 6,700 medical debt lawsuits against patients last year.” (New York Times, 11/8/19)
  • “The hospital that pursued Mr. Bushman, a 295-bed not-for-profit facility called Carle Foundation Hospital, is one of several that has at times employed debt collection tactics that are shunned by many other creditors. It has filed hundreds of lawsuits.” (Wall Street Journal, 10/30/03)

Hospitals layering large interest payments on top of already crushing debt, and collecting through tactics like garnishing wages and seizing bank accounts:

  • “Barrett, who has never made more than $12 an hour, doesn’t remember getting any notices to pay from the hospital. But…Methodist Le Bonheur Healthcare sued her for the unpaid medical bills, plus attorney’s fees and court costs.
    “Since then, the nonprofit hospital system affiliated with the United Methodist Church has doggedly pursued her, adding interest to the debt seven times and garnishing money from her paycheck on 15 occasions.”Barrett, 63, now owes about $33,000, more than twice what she earned last year.” (Guardian, 6/27/19)
  • “Tolson said she went to Yale-New Haven…to be treated for a staph infection. She had to stay at the hospital for eight days and got a bill for $9,000. She told the hospital she didn’t have a job or insurance and was told to seek welfare assistance. Because her husband had a small income, she didn’t qualify for state or federal assistance, she said.”She tried on several occasions to set up payment plans, but even with a job she wasn’t able to meet the payment schedule, she said. Her bank account was frozen, and when she called to discuss the problem the hospital’s agents were unwilling to budge on the issue, she claims.”‘I told them “I’m not working,” and they said “you should have thought about that then,”’ Tolson said. “Her bill is now $14,000.” (Connecticut Post, 12/17/03)

Hospitals threatening and taking patients’ homes through liens and foreclosures:

  • “Heather Waldron and John Hawley are losing their four-bedroom house in the hills above Blacksburg, Va. A teenage daughter, one of their five children, sold her clothes for spending money. They worried about paying the electric bill. Financial disaster, they say, contributed to their divorce, finalized in April.”Their money problems began when the University of Virginia Health System pursued the couple with a lawsuit and a lien on their home to recoup $164,000 in charges for Waldron’s emergency surgery.” (KHN, 9/10/19)
  • “Still, the hospital administers strong legal medicine for cases of minor financial wounds. It presses for foreclosure for debts a fraction of a house’s worth. It pursued a $2,889.12 debt against a couple in Westville all the way to foreclosure, by which time fees and interest pushed the debt to $6,517.64.” (New Haven Advocate, 4/17/03).

Nonprofit hospitals failing to offer patients charity care, sometimes in violation of state law or the hospital’s own internal charity care policies:

  • “Harriet Haffner-Ratliffe, 20, gave birth to twins at a Providence hospital in Olympia, Wash…. She was eligible under state law for charity care.”Providence did not inform her. Instead it billed her almost $2,300. The hospital put her on a roughly $100-a-month payment plan.” (New York Times, 9/24/22)
  • “The lawsuit also accused the hospital of failing to inform needy patients that the financial assistance was available and hiring aggressive collection agencies to go after patients who had not paid their bills.” (New Haven Register, 2/19/03)

Patients skipping care or having providers refuse care due to debt:

  • “After a year of chemo and radiation…Penelope Wingard finally heard the news she’d been praying for: Her breast cancer was in remission. But with relief immediately came worry about her finances.”Wingard had received Medicaid coverage through a temporary program for breast cancer patients. When her treatment ended, she became uninsured.”Bills for follow-up appointments, blood tests and scans quickly piled up. Soon, her oncologist said he wouldn’t see her until she paid down the debt.” (KHN, 12/21/22)
  • “During Michael’s past admissions to the hospital, Margaret says, she asked staff members if there was some way to discount or waive the charges—figuring that Christ Medical, a nonprofit institution sponsored by religious organizations, might be inclined to help. But the answer, she says, was always no. So, as the hospital bills piled up on the dining table, Margaret lay awake at night, wondering how the family would crawl out from under the debt. On that April morning, as Michael kept insisting that it was ‘just the flu,’ she suspected that it was something more serious. But Michael wouldn’t let her take him to the ER, and eventually Margaret headed to work. When she returned that night, she found him on the floor, dead.” (New York Times, 12/19/04)

The stories are compelling, consistent and comprehensive, exposing in detail the devastating consequences of a healthcare system that forces patients—some uninsured, others with inadequate health insurance—to assume unmanageable financial burdens for needed medical treatment. Based on analysis of large volumes of public records and interviews with dozens of victims, they include follow-up reporting on actions taken by hospitals in response to publicity, and legislative and legal actions in support of debtors. In short, everything good investigative journalism should be.

Except for one problem: The second example in each pair above is 20 years old.

An evergreen problem

The first examples are drawn from work by the New York Times, Guardian and Kaiser Health News (KHN, recently rebranded as KFF Health News), which recently teamed up with National Public Radio for a series called “Diagnosis: Debt.” Along with the 2019–20 “Profiting from the Poor” investigative series published jointly by ProPublica and MLK50: Justice Through Journalism, these stories are part of a wave of recent medical debt coverage.

The second quotes, indistinguishable in the suffering of the profiled patients and the issues addressed, are from 2003–04, including a Wall Street Journal series by reporter Lucette Lagnado (3/13/03, 3/17/03, 4/1/03, 6/10/03). Lagnado’s work began in Connecticut, where Paul Bass, editor of the weekly New Haven Advocate, had dug into court records to reveal aggressive legal practices by Yale-New Haven Hospital in 2001. Lagnado spent months tracking down debtors and examining the same public records that form the basis for the latter-day stories.

Then as now, follow-up stories show embarrassed individual hospital systems forgiving the debts of people named in the stories and many other current debtors, then usually promising to reduce the ferocity of their collection tactics (Wall Street Journal, 4/1/03; New Haven Register, 3/19/04; ProPublica, 7/30/19; KHN, 9/10/19; ProPublica, 9/24/19).

Lagnado’s work in 2003 was recognized at the time by the Annenberg School of Journalism at USC as one of three finalists for the 2004 Selden Ring Award for Investigative Reporting.

Sixteen years later, MLK50 founding editor Wendi C. Thomas won the Selden Ring Prize for her series jointly published with ProPublica. The two organizations shared a 2020 Loeb award for local reporting and a bronze medal from the Barlett & Steele Awards for Investigative Journalism, given by the Walter Cronkite School at Arizona State University. The same year, Kaiser Health News Jay Hancock and Elizabeth Lucas were Pulitzer Prize finalists for investigative reporting for their healthcare debt work.

Medical debt, it turns out, is an evergreen problem, a perpetual source of torment for patients, prizes for reporters, and controversy over incremental, poll-tested policy changes that for two decades have failed to stem the flood tide of medical debt that is drowning millions of people. These gradualist approaches have, however, succeeded in deflecting attention from the only real solution to the problem—a national health insurance system like Medicare for All that would cover everyone, all the time, without holes in coverage that lead to catastrophic personal debt.

Community outrage

Lagnado’s 2003 series appeared during campaigns against abusive medical debt collection in several states, including Illinois, California, Washington and Connecticut, where Lagnado’s initial iconic profile of Quinton White (Wall Street Journal, 3/13/03) chronicled his 20-year struggle with debt from his wife’s treatment at Bridgeport Hospital.

White suffered nearly all the indignities hospitals impose on indebted patients. By the time Lagnado found him, White had seen the hospital attach a lien to his house and drain most of his bank account. Interest ballooned the debt; White had paid $16,000 of the original $18,740 over the years, but the Yale New Haven Health System, which had acquired Bridgeport Hospital in 1996, was pursuing him for an additional $39,000 in remaining principal, interest and fees.

Prompted by community outrage at the tactics described by Lagnado, and in a series of reports from the nonprofit Connecticut Center for a New Economy (CCNE), local labor unions, a church-based grassroots movement, Yale University public interest lawyers and hospital patients built a campaign to take on Yale-New Haven and the statewide hospital industry.*

Four lawsuits, a series of demonstrations with hundreds of people, a grassroots lobbying campaign and ongoing media coverage yielded progress. The Connecticut General Assembly passed a law cutting interest on medical debt to 5% and requiring hospitals to inform patients of available financial assistance and to stop collections against eligible patients. The law limited billing of uninsured patients to the actual cost of their care, and required hospitals to report on their collection activity. Under intense local pressure, Yale-New Haven Health went further than the new state law, settling lawsuits by removing thousands of property liens and forgiving more than 20,000 accounts worth millions of dollars in outstanding debt.

The final lawsuit against Yale-New Haven was a class action focused on the practice of billing uninsured patients at wildly inflated “sticker prices”. Filed a year and a half after Lagnado’s first article, it was one of dozens brought against nonprofit hospital systems nationwide in 2004 by members of the Not-for-Profit Litigation Group, led by trial lawyer Richard “Dickie” Scruggs, one of the lead attorneys in the 1990s tobacco litigation. From the middle of 2004 through 2005, Scruggs’ firm drew blanket coverage across the US, with more than 200 local stories in more than 30 states, according to a search of the Nexis database.

Historical amnesia

However, by the spring of 2006, Scruggs’ suits had largely failed, and he would soon find himself in prison for bribing a judge in an unrelated case. With local hospitals agreeing to policy changes in Illinois and Connecticut, medical debt coverage shrank.

The issue didn’t go away, of course; it simply attracted less media attention. However, according to veteran New York Times healthcare reporter Reed Abelson (2/16/23), concern about medical debt appeared mysteriously in 2022: “The inability to afford medical tests and treatment, a perennial concern in the United States, began emerging as a much more striking issue last year.” Perhaps Abelson, who has covered healthcare since 2002, forgot Jonathan Cohn’s 5,000-word New York Times Magazine essay (12/19/04) from 2004, prompted in part by the Scruggs class action cases.

Telling the stories of millions of Americans whose lives have been ruined and even shortened by medical debt is an honorable exercise, and the spate of recent reporting does include a few new details. In particular, MLK50’s Wendi Thomas (6/27/19) interviewed judges who decide debt cases, giving readers a new level of detailed, often chilling insight into the attitudes of people who sometimes casually help attorneys for hospitals and collection agencies destroy patients’ families.

Judge Betty Thomas Moore ordered a woman whose 11-year-old nonverbal autistic son wears diapers and eats only pureed foods to pay $130 a month instead of $30. The judge reasoned that her son and his two older brothers “could sacrifice so that their mother could pay more.”

History of failure

Beyond painful details and inspiring victories, most articles that offer a broader frame for the issue are plagued by bad habits common to corporate journalism: historical amnesia, a bias for treating individuals as “consumers” with primary responsibility for their own problems, and ideological blinders.

As they have for 20 years, most policy-focused stories about medical debt lean heavily toward regulatory initiatives or legislative actions to take the sharp edges off of debt collection, or offer advice on how to avoid or manage medical debt (NPR, 4/14/22; KHN, 10/17/19; KRWG, 4/6/21). To the extent that wrap-up stories acknowledge the need for Americans to be covered by health insurance, reporters assume the only way forward is to build on the supposed successes of the Affordable Care Act through tiny increments of change. They treat Medicare for All, or any other credible scheme to cover all Americans with comprehensive health insurance, as an impossibility for the foreseeable future.

Unfortunately, regulating medical debt collection tactics has an easily documented history of failure as healthcare policy. The 2003 Connecticut law, described by Lagnado (6/10/03) as “a breakthrough patient-protection bill,” addressed several of the key issues highlighted in reporting on healthcare debt. Yet the federal Consumer Financial Protection Bureau (CFPB) reported that as of December 2020, 10% of Connecticut adults whose accounts the agency tracks had medical debt on their credit reports, with an average balance of $1,407 and a median of $508.

The CFPB acknowledges that its data significantly understates the scale of the issue, because a lot of medical debt either never appears on credit reports, or is reported as general credit card debt. An analysis of the CFPB data shows that an average of 14% of American credit reports have medical debt on them. The Kaiser Health News/NPR collaboration kicked off with the publication of a Kaiser Family Foundation poll showing that 41% of adults in the US, or 100 million Americans, have medical debt.

Burdened despite ‘breakthrough’

So despite “breakthrough” legislation and additional internal policy changes at the state’s largest health system, people in Connecticut remain so burdened with medical debt two decades after a “breakthrough” that public officials feel the need to publicize the problem and take action.

In December 2022, US Sen. Chris Murphy (D.-Conn.), who was the Senate co-chair of the state’s Public Health Committee when the 2003 law passed, held a listening session on medical debt to allow people to air their suffering. Two months later, Connecticut’s governor promised to spend public money to retire as much as $2 billion in residents’ debts.

Murphy and his Senate colleague Chris Van Hollen (D.–Md.) have introduced the Strengthening Consumer Protections and Medical Debt Transparency Act, to “protect consumers from medical debt.” Most of the proposal is lifted from 20-year-old laws in Connecticut and other states: capping interest at 5%, reporting on collection activity, determining the patient’s insurance status before collecting, requiring itemized bills. The bill would also give patients an additional six months after providers have determined their insurance and charity care eligibility before facing aggressive collections tactics.

Similar laws in other states simply have not stopped medical debt from gnawing at the economic security and health of millions of families. In the CFPB analysis, Connecticut has only the 16th lowest percentage of credit reports with medical debt. The report includes a table of states that have policies to require hospital charity care or restrain aggressive collection tactics. Some of those states are among those with the lowest percentage of indebted patients; others, like New Jersey, Illinois, Maine and New Mexico, are not. Of course, what does line up with low levels of medical debt is health insurance. The CFPB study (3/1/22) notes that “medical debt is also more common in the Southeastern and Southwestern US, in part because states in those regions did not expand Medicaid coverage.” Indeed, 29 of the 30 states with the lowest percentage of credit reports with medical debt have adopted some form of Medicaid expansion.

These laws do ease some existing patients’ terror and stress, by banning or reducing the use of horrifying tactics like wage garnishment, bank executions, foreclosure and even actual arrests for missing court dates. In the end, they don’t eliminate that stress, and won’t address the core failure of the US healthcare system to cover everyone with guaranteed health insurance.

Here’s a simple sentence you’ll rarely read in corporate media: The Affordable Care Act has failed. Its only measurable effect has been to shift a small percentage of the population from being uninsured to the ranks of the underinsured.

According to the Commonwealth Fund, when the ACA passed in 2010, 56% of American adults age 19–64 were covered for the entire year with insurance good enough not to consider them underinsured. In 2022, 57% of Americans were similarly covered. After 12 years, millions of column inches and endless television news hours, there is little discernible difference in the core protections available to Americans against illness, injury, early death and, yes, medical debt.

The Commonwealth Fund underestimates the scale of underinsurance: 32% of adults who were “insured all year, not underinsured” in 2022 reported problems getting access to healthcare because of cost. However, taking Commonwealth’s definitions at face value, at the current rate of progress, every single American adult can expect to be “insured all year, not underinsured” in about 515 years.

How to cope with the Kafkaesque

Not to worry. Major media outlets have us covered for the next five-plus centuries. Most US news sources, medical self-help websites, and even credit-reporting agencies Experian and Equifax have an article or two filled with advice for patients on fighting back against medical debt.

If medical debt has crimped your reading budget, look for former ProPublica reporter Marshall Allen’s Never Pay the First Bill: And Other Ways to Fight the Healthcare System and Win in your local public library. Or you can head over to his Allen Health Academy website, featuring a self-help curriculum called “The Never Pay Pathway.” For $3 a month, you get 16 videos on-demand, a certificate of completion and monthly newsletter. Coming soon, for $5 a month, you can get an app and a checklist for tracking your progress negotiating with your creditors, and for $7, companies get access to an employer-support forum, and workers who have debt (presumably because of the company’s lousy health insurance) can join a Facebook support group.

The guidance has changed little in two decades: Study your insurance plan if you have one, to understand your deductibles and copays. Review your bills for inaccuracies. If you’re uninsured, apply for Medicaid or other public insurance programs, and ask your hospital for financial help. Fight your insurer if they don’t pay what they’re supposed to. Negotiate your total hospital debt down, bargain a lower interest rate, and set up a payment plan that you can afford. If you get sued, show up in court, prepared with a proposed payment plan. And so on.

If it works, this is good advice. Most hospitals still bill uninsured patients at inflated prices. The vast majority of medical bills do contain errors. Patients frequently can negotiate to lower their total debt and interest rates dramatically and get on a payment plan. Hospitals do have charity care policies, however stingy or generous.

The limits of consumer empowerment

But consumer empowerment only goes so far. A study by Stanford Graduate School of Business professor Jeffrey Pfeffer found that US adult workers already spend more than 13.7 million hours a week on the phone with their health insurance administrators. Some of that time is spent dealing with health insurance problems involving medical debt. However, most medical debt empowerment articles urge patients to research, review and negotiate discounted debt with hospitals, doctors and other providers.

So, to “get rid of medical debt—or avoid it in the first place,” according to the headline on a widely circulated story by NPR reporter Yuki Noguchi (KHN, 7/1/22), patients must expect to spend even more time on the phone, studying bills, reading laws, regulations and policies, writing letters and going to court. In a nation where people have to work two or three jobs to make ends meet, it’s not clear when they are supposed to find the time to read (assuming they’re fluent in English), make phone calls, gather their personal information and trudge off to the hospital to prove they’re worthily poor enough not to deserve torture.

For the story, KHN and NPR “spoke with patients, consumer advocates, and researchers to glean their hard-won insights on how to avoid or manage medical debt.” Noguchi walked patients through the US healthcare nightmare step by step, from subscribing to an insurance plan through fending off collections lawyers, with empowering advice for each step.

In real life, patients often can’t shop for hospitals like groceries or a new appliance. Patients go where their doctors have admitting privileges, get treated in facilities that are in their insurance network, or wind up in whichever emergency room an ambulance takes them to. If, after shopping, their discounted bills still far exceed their ability to pay, then what? Without real wealth or a high income, uninsured and underinsured people have relatively few choices that actually protect them from healthcare debt.

Neither NPR nor any other outlet offers data on the efficacy of consumer empowerment as policy. If every single “consumer” dutifully followed every bit of advice, would the number of debtors shrink from 100 million to 10 million? 50 million? 95 million?

And when these tactics do “work,” it’s not clear how much help they provide. KFF’s own survey (6/16/22) found that half of American adults couldn’t pay a $500 medical expense right away, and 19% would never be able to pay it off. In the end, if you can’t afford $500, how valuable is bargaining a $30,000 debt down to $10,000?

Without comprehensive health insurance coverage, patients will wind up back in debt, or sicker and in more pain because they avoid care. MLK50’s Thomas (ProPublica, 6/27/19) framed her interviews with Memphis judges in part through the story of Raquel Nelson, who received treatment from the United Methodist Church-affiliated Methodist Le Bonheur Healthcare system. Methodist’s lawsuit was Nelson’s third time as a medical debt defendant.

Limiting future torture

This issue haunts reporting on what the New York Times (12/29/22) calls “a new strategy to address the high cost of healthcare.” RIP Medical Debt, a nonprofit organization founded by former debt collections executives, is working with public and private institutions like churches, state and local governments, and even a local ABC affiliate, using their own money to purchase outstanding debt and retire it.

Most of this debt has already been written off as uncollectible by providers and sold to third party collectors, allowing RIP to buy it at a few cents on the dollar. In Connecticut, Governor Lamont proposes to give RIP Medical Debt $20 million in federal American Rescue Plan funds to retire up to $2 billion in debt.

Ohio State Rep. Michele Grim, quoted in the Times story as a Toledo city councilor who helped organize a partnership between the city and RIP Medical Debt to cancel medical debts, told FAIR in a Zoom interview:

This is the only country in the world that lets its citizens go bankrupt because of medical debt. States and locals see this as the simplest thing we can do, because we can’t fix our broken healthcare system.

Toledo internist John Ross, a Franklin County Board of Health commissioner and past president of Physicians for a National Health Program, strongly supports the Ohio initiative, but also noted that ARP funding is a one-off. Without continued sources of financing, many of the current debtors whose debt will be forgiven, and thousands of others who lack adequate health insurance, will soon be burdened again by debt: “The next wave of debt is building as we speak.”

RIP Medical Debt typically doesn’t buy debt until patients, providers and insurers have had a chance to pursue other sources of payment. That process usually takes about 18 months, according to RIP Medical Debt CEO Allison Sesso. Thus, at its very best, the Times “strategy to address high healthcare costs” boils down to this: If a local government scrapes together some money, and if your local hospital is willing to work with RIP medical debt, indebted patients may only need to spend 18 months struggling with medical bills—although once their current debts are paid, the next time they get sick, the cycle starts over. When the bar is low enough, even an unfunded possibility of limiting future torture to a year and a half looks like a victory.

RIP Medical Debt leaders understand the limitations of their model. In an email exchange with FAIR, CEO Allison Sesso wrote:

We know that RIP Medical Debt is not a holistic solution, but a stopgap that nonetheless provides a financial and emotional respite to our constituents. We understand both that debt relief matters to the individuals we help and that what we are doing is not fundamentally solving the problem.

Distorted landscape

In reality, local residents have already paid these debts many times over. Nearly 60% of acute care hospitals in the US are private tax exempt “charitable” organizations, whose mission statements typically include a commitment to caring for the poor, sick and injured. The “mission” entitles them not to pay federal, state and local property, income or sales taxes.

In 2006, the Cook County assessor estimated that nonprofit hospitals owned between $4.3 and $4.5 billion worth of exempt commercial real estate in the county, representing up to $241 million in local property tax revenues, likely much higher today. Yet cash-strapped city governments are now spending public money to pay for debts incurred in these already heavily subsidized hospitals.

Speaking from personal experience, it’s hard to imagine a more gratifying reporting outcome than seeing a powerful hospital corporation forgive suffering patients’ debts, or announce changes in policies toward all patients who can’t afford care. In 2019, Virginia Gov. Ralph Northam and the president of the University of Virginia publicly committed to changing UVA Health’s policies, the day after KHN’s expose (9/10/19) on the hospital system’s lawsuits and collections tactics.

However, by ignoring the history of failed, narrowly targeted reforms; covering gimmicky strategies and pouring effort into the kind of consumer self-help that NGOs have been publishing how-to guides about for decades (e.g., Hospital Debt Justice Project, 2003); and indulging in ritual defenses of the Affordable Care Act, news organizations leave their audiences with distorted impressions of the policy landscape, undermining the power of their own high-impact reporting.

Giving politicians cover

Jennifer Bosco, staff attorney at the National Consumer Law Center, told NPR (4/14/22):

Ultimately, I think the problem of medical debt isn’t going to go away unless at some point in our country’s future, we adopt some sort of single payer or Medicare-for-All system. But I think that’s very much a blue-sky idea at this point.

Apparently it’s a popular blue sky idea. In its story on RIP Medical Debt, the Times (12/29/22) noted that polling by Tulchin Research, the American Association of Political Consultants’ 2022 Democratic Pollster of the Year, found that “65% supported ‘Medicare for all’ and 68% supported expanding Medicaid.”

It will remain a blue-sky idea as long as media keep giving politicians cover with the idea that urgently addressing the incremental Next Bad Thing will make a difference. Three years ago, the bad thing du jour was “surprise billing.” Surprise bills happen when an empowered consumer carefully studies the rules of their health plan and goes to a hospital in their insurance network, but unknowingly gets treated by a doctor that isn’t in their network, then gets socked with a huge bill that their insurer doesn’t want to pay.

KFF polled the issue and found that 65% of people were concerned about surprise bills. Surprise bills affect insurers as much as individuals, so Congress passed the No Surprises Act, spawning a round of updates to consumer empowerment websites, and warnings about how the Act didn’t quite get rid of all surprise bills.

People don’t get surprise medical bills because doctors are greedy, or because private equity firms bought some emergency physician practices, or because empowered consumers didn’t check their network carefully enough. Americans get surprise bills because they have insurance networks. They have to go to “in-network” providers because, unlike other wealthy nations, Americans don’t have a right to healthcare, providers don’t have an obligation to treat people who need it except in emergencies, and US healthcare prices are set in secret negotiations between powerful private actors.

Insurers, doctors and hospitals wield network membership and rates as weapons in a high-stakes battle over market power. For empowered consumers covered through their jobs, this means that every year during open enrollment—assuming their health plan is even still offered by their boss—they get to “choose” whether to keep it, by poring over long lists of doctors and hospitals to see if they can still avoid bankruptcy while visiting the people who have healed and comforted them for years.

They often can’t. In 2017, Morning Consult found that 15% of Americans had a doctor leave their network in just the previous 12 months, meaning they’d have to pay more—often much more—to continue their care with that doctor (Fierce Healthcare, 3/17/17).

The New Next Bad Thing

Medical debt coverage now frames deductibles as the Next Bad Thing. NPR and KHN (6/16/22) gave readers of their Diagnosis Debt series “Five Quick Takeaways from a Yearlong Investigation of Medical Debt in America.” There really are only four takeaways, as the first two basically say it’s a big problem. Two others are that medical debt is hard to pay off, and that “debt and illness are linked.” The final takeaway glances off the core issue:

The KHN/NPR investigation finds that despite more people having health insurance—as a result of the Affordable Care Act—medical debt is pervasive. There is a reason: Over the past two decades, health insurers have shifted costs onto patients through higher deductibles, at the same time that the medical industry has steadily raised the prices of drugs, procedures and treatments. The 2010 healthcare law didn’t curb that.

Nothing in the five takeaways is new, or required a year to unearth. Deductibles have grown much faster than inflation over the past two decades, which KHN’s reporters presumably know, since the primary source for the information is KHN’s own parent organization, the annual employer surveys done by the Kaiser Family Foundation—as FAIR (9/8/17) reported six years ago . More than a third of American adults have been telling the Commonwealth Fund (2003–18, 2020, 2022) that they skipped or delayed needed medical care in the past year due to costs since Lucette Lagnado first knocked on Quenton White’s door in 2003.

By itself, limiting or eliminating deductibles is meaningless unless all of the tools for patient abuse are taken out of the industry’s hands. If deductibles are limited or disappear, patients can expect higher premiums, higher copays and heavier coinsurance. They will likely face even more intense shifts in their lists of “in-network” providers, as insurers try to wring profits from the market to make up for any minor losses.

Timid sources, compromised coverage

To some extent, corporate media debt reporting is constrained by its chosen sources. Democratic politicians don’t want to talk about universal coverage schemes; even Sen. Bernie Sanders says “we ain’t gonna get” Medicare for All (KHN, 2/8/23). NGOs like the National Consumer Law Center accept and repeat the “blue sky” expectation, even though Medicare for All and Medicaid expansion poll as well as limiting surprise bills, and very close to debt relief (KFF, 2/28/20; New York Times, 12/29/22).

The NGOs that track medical debt and related trends reflect the conventional wisdom of what is politically possible. The Kaiser Family Foundation is a respected agenda-setting organization. When the authors of KFF’s Issue Brief (11/3/22) headlined “Hospital Charity Care: How It Works and Why It Matters” get to “Looking Ahead” at policy options, they offer a parody of Washington policy wonkery, with ideas appearing passively out of the ether:

In the context of ongoing concerns about the affordability of hospital care and the growing burden of medical debt, several policy ideas have been floated at the federal and state level to strengthen hospital charity care programs.

Evidently whoever “floats” ideas in Washington—apparently not KFF—is under the impression that universal, comprehensive health insurance doesn’t apply as a solution to medical debt.

However, there are plenty of suggestions for encouraging or even requiring more hospital “charity.” The link-heavy two paragraphs include all the usual ideas, like reporting requirements and higher poverty thresholds for mandated charity care. There’s even a clever “floor and trade” suggestion, “where hospitals would be required to either provide a minimum amount of charity care or subsidize other hospitals that do so.”

The closest thing to actual solutions are vague hints:

State and federal policymakers have also considered several other options to reduce medical debt or increase affordability more generally, such as by expanding Medicaid in states that have not already done so, reducing healthcare prices through direct regulation or other means, and increasing consumer protections against medical debt.

Direct price regulation, a standard feature of national healthcare systems around the world, triggers furious industry opposition. If KFF can find such a politically controversial idea “floating” somewhere, why can’t an idea with 65% polling support, and 120 voting cosponsors in the US House of Representatives at the time the piece was written (H.R. 1976), float past the authors? Like so many other sources, KFF seems firmly committed to achieving universal coverage—sometime in the next five centuries.

Assumed political impotence

The most extraordinary aspects of the current wave of medical debt coverage are the assumed political impotence of the public, and the low expectations of reporters and NGO sources. Hospitals spend massive amounts of money lobbying against their own patients’ interests. When a major investigation is published, nonprofit systems are vulnerable, and NGOs and local community leaders can often shape the terms of the response.

An embarrassed Methodist Le Bonheur system in Memphis announced a 30-day review of its charity care policies, prompting a ProPublica/MLK50 article (6/30/19) headlined “Stop Suing Patients, Advocates Advise Memphis Nonprofit Hospital System”:

During the past month, MLK50 consulted with consumer advocates and legal experts around the country about how Methodist could reform its policies. For many, the top priority was to stop the lawsuits. Close behind, they said, was for the hospital to expand its financial assistance policy to include poor people who have health insurance but can’t afford their deductibles or co-pays.

Not a single quoted expert said anything like:

Of course they should stop suing people. But the very best thing Methodist Le Bonheur could do for its patients is withdraw from the American Hospital Association and spend what they were paying in dues to lobby for Medicare for All, or some other form of genuine national health insurance. Not only is it disgraceful that a supposed charitable hospital is suing patients and garnishing their wages, but they’re using money brutally extracted from impoverished patients to stop the government from guaranteeing those patients actual health insurance that would keep them out of debt forever.

Similarly, if just a small percentage of the 100 million Americans with medical debt emailed their most recent collections letter to their senators and representatives once a month, with the simple message “National health insurance now,” that’s millions of messages. It takes less time than suing your hospital, and would certainly get congressional attention—it might even crash congressional servers. Five minutes. Once a month. Yet the only advice given to readers is “empowerment” to negotiate on their own with a multi-billion dollar corporation.

A simple story

Americans pay much more for healthcare and yet die much sooner than citizens of other wealthy countries. Wikimedia Commons, 3/11/22.

One of the few reporters who took the time to look at the history of medical debt in the US is KHN’s Dan Weissmann, who runs the Arm and a Leg podcast. Weissmann did a multipart series on the history of medical debt, pegged to an interview with former attorney Dickie Scruggs. The series offers a good look at the history of medical debt campaigns, but again the framing is absurdly narrow. Weissmann introduces Scruggs as the lawyer “Who Helped Start the Fight for Charity Care,” as if hospital charity is a goal that listeners should be satisfied with.

In 2005, after local patients filed lawsuits against hospitals, the Bergen (New Jersey) Record editorial board (6/13/05) described the actual “fight”:

America’s healthcare system is broken. The only way to completely fix it is a single-payer system, one that would end the inequities that cause people like Mr. Osso to be charged three and four times the rates that insurance companies or Medicare and Medicaid are charged.

Two decades of failed reforms later, the idea of actually covering everyone in the US stimulates talk of a policy Long March in elite media. RIP Medical Debt CEO Allison Sesso told FAIR “that no one entity can change such a complex and opaque system as US healthcare…. RIP’s help is immediate—this matters because policy and systems change can take years.”

US health care may be nightmarishly complex for patients and the people who heal and comfort them, but US healthcare policy is quite simple. There are two “entities,” comprising exactly 536 people, who could eliminate current and future medical debt tomorrow. Functioning models all over the world cover the conditions described in the stories above without turning patients into debt peons, at a fraction of what is spent in the US. The people with the power to do it just refuse to. End of story.

*Disclosure: I was a source for reporting on debt in Connecticut. At the time, I was a researcher for the hospitality workers’ union now known as UNITE HERE, collaborating with staff of the Service Employees International Union (SEIU). As noted in many stories, a member of our team, SEIU researcher Grace Rollins, researched and wrote the CCNE reports, and shared our materials with Lagnado and other reporters. I participated in planning for the rallies, and assisted with lobbying for the legislation that passed in 2003.

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