Why so many older Americans with insurance face unpaid medical bills


Health care debt is increasing for older Americans with health insurance.

A new study released by the Consumer Financial Protection Bureau (CFPB) U.S. Office of Aging found that most people over the age of 65 (98%) have health insurance through enrollment in programs such as Medicare. , it turns out that many people are still struggling with debt.

Conclusion: Nearly 4 million older people were unable to pay their full medical bills in 2020, the most recent year for which such data are available. according to the report. More than two-thirds of her unpaid bills have insurance from multiple sources, including Medicare, Medicare Advantage, Medicaid, Medigap, employer-based insurance, or Tricare, the military-wide health plan. had joined.

The average unpaid medical bill reported by seniors during this period was $13,800, up 20% from $11,700 in 2019. The big picture: This means that unpaid health care costs for seniors increased from $44.8 billion in 2019 to $53.8 billion in 2019. 2020.

Source: (CFPB)

Source: (CFPB)

The agency declined to comment on current debt levels.

But the problem persists. A 2022 survey of about 1,429 adults over the age of 65, conducted by the Federation of Senior Citizens, found that nearly a quarter of them used credit cards to borrow money, use home equity accounts, or pay medical bills. It turns out that he had to borrow money from the bank, family and friends. And last year, according to Gallup, more than a third of Americans said they or a family member had postponed treatment because of costs, up from 26% in 2021, the highest percentage in 20 years. rice field.

Source: Gallup

Source: Gallup

what’s happening? Researchers say the main causes are frequent and complicated medical care, as well as out-of-network fees, deductibles and other costs, services not covered by Medicare, and limited income.

But the biggest reason for the delay is medical billing errors.

“The burden of resolving inaccurate health care claims often falls on patients, many of whom face functional limitations or have permanent disability,” said senior policy analyst Hector Ortiz, co-author of the CFPB report. Older people living on income or low income,” he told Yahoo Finance.report IThe survey is based on data from the 2021 Income and Program Participation Survey (SIPP), conducted by the U.S. Census Bureau of 13,300 adults age 65 and older between February 2020 and June 2021. increase.

It also includes complaints filed with the CFPB between January 2020 and December 2022, including approximately 1,100 debt collection complaints and more than 300 credit reporting complaints for Medicare claims. be

Why are there so many billing disputes? One of the problems is that older people are more likely to have chronic health needs, so they need more advanced documentation and multiple pieces of information. It is that we rely on reporting from sources. “This can lead to delays in payments, mistakes in billing whom for what services, and healthcare providers seeking inappropriate reimbursement from patients,” the researchers said.

“The Medicare claims process is very complicated,” says Philip Moller, a Medicare and Social Security expert and lead author of the “Get What’s Yours” series of books on Social Security, Medicare, and health care.

Health care costs are high for older people, and mistakes only make them more expensive. Nearly half reported spending $400 or more a month on Medicare premiums and out-of-pocket expenses, including expenses not covered by Medicare, according to a recent survey of 1,742 seniors by the Federation of Senior Citizens. ing. The survey was conducted from January to May 2023.

“It’s a sobering thought,” Mary Johnson, a seniors group policy analyst, told Yahoo Finance.

A 2022 survey of adults over the age of 65 by the Federation for the Aged found that nearly a quarter borrowed money to pay for medical bills (Getty Creative)

A 2022 survey of adults over the age of 65 by the Federation for the Aged found that nearly a quarter borrowed money to pay for medical bills (Getty Creative)

Doesn’t Medicare cover everything?

There is a misconception that medical insurance is free when older people enroll in Medicare. “Traditional Medicare has no cap on how much people have to pay out-of-pocket each year,” Claire Noel Miller, a senior strategic policy adviser at the AARP Public Policy Institute, previously told Yahoo Finance.

Many Medicare beneficiaries purchase Medigap or enroll in a Medicare Advantage Plan to offset these costs. You will also be enrolled in a Part D prescription drug plan. However, additional coverage and out-of-pocket premiums can increase financial stress for Medicare beneficiaries.

Moreover, if unpaid medical bills are handed over to debt collectors and reported to credit bureaus, the aftermath can be significant. For example, in the CFPB credit report complaint, seniors were asked how inaccurate medical information on their credit report could affect their access to affordable credit and even employment opportunities. Explain what you are giving.

One of the efforts to mitigate that domino effect is for the three major credit bureaus to stop reporting paid medical debt. In the past, this debt could remain on your credit report for up to seven years. It also stopped reporting health care debt with recoveries of less than $500 or with a payback period of less than one year.

SEA RANCH, CALIFORNIA - NOVEMBER 12, 2018: Medicare health insurance and social security card on medical report with stethoscope. Medicare is a national health insurance program offered by the United States for those 65 and older. Social Security is a federal insurance program that provides benefits to retirees, the unemployed, and the disabled.

(Getty Creative)

So what is the solution?

“If possible, work with your healthcare provider before seeking medical attention to see if the treatment applies,” says Mueller. “People with original Medicare should download their Medicare Summary Notice (MSN) online to find out what claims were denied and why. Submit and follow up as needed.”

People who have a Medicare Advantage Plan are generally required to receive pre-approval for care, so they are less likely to have their claims denied. But “you still need to be careful, especially if you want a doctor or other caregiver who isn’t part of the plan’s provider network,” Mueller said.

In addition, there are programs that help people with limited resources pay for insurance premiums and co-payments, but many of these people do not participate. To find out if you are eligible, first contact the State Health Insurance Assistance Program (SHIP).

Diane Omdahl, co-founder of Medicare advice website 65 Incorporated, told Yahoo Finance to keep an eye on MSN and health care provider bills to avoid getting caught up in medical debt. “They typically record whether information has been submitted to insurance, whether a claim has been paid out. Accurately and completely document and store call content such as calls and follow-ups.”

However, the greatest relief must be provided by health care providers and insurers themselves. “Our research suggests that medical billing systems will have more resources to prevent and correct billing errors and ensure that inaccurate bills are not referred to collection agencies and credit bureaus,” said CFPS’s Ortiz. It shows that we need to invest in

Don’t hold your breath.

Kelly Hannon is a senior reporter and columnist at Yahoo Finance. She is a workplace futurist and career and retirement strategist, author of 14 books including In Control at 50+: How to Succeed in The New Work of Work and Never Too Old To Get Rich. is also the author of the book follow her on her twitter @Kelly Hannon.

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