Medical bills have long been a source of stress for Americans, especially as out-of-pocket costs have risen even for people with health insurance. In the midst of the pandemic, many Americans are more worried about paying for Covid-19 care than they are about getting sick from the virus.
In the pandemic era, anxiety about paying medical bills increasingly cuts across income and age groups. More Americans are now looking to their doctors and other healthcare providers for help paying those bills.
According to research from AccessOne conducted last fall, 37% of survey respondents were concerned about their ability to pay for medical care in 2021; 53% of families with children feared they might not be able to pay their medical bills.
For many, these fears are founded. According to Credit Karma, in October 2020, 20 million of their U.S. members held $45 billion of medical debt in collections, averaging $2,200 in debt per member.
To manage overwhelming medical bills, 65% of consumers surveyed said they want to discuss payment plan options with their doctors, though only 45% had ever done so. Nearly half (49%) said they want to understand their payment options before they get care.
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“If people don’t know how they’re going to pay for [healthcare services], even if they understand the bill, they may not get the care they need and that’s going to be bad,” said Mark Spinner, CEO of AccessOne.
The survey results back up this concern; nearly half of respondents, including 46% of families with children, reported delaying care due to costs. Several national polls report lower but still concerning rates of delaying or avoiding care because of cost—between 10% and 26% depending on the survey.
Payment Plans to the Rescue?
Under the weight of overwhelming medical bills, 41% of survey respondents said it’s very important that their healthcare providers offer zero- or low-interest payment plans, including more than half of GenXers (56%) and Millennials (54%).
Payment plans were especially important for higher-income respondents; 58% of people with annual household incomes of $100,000 or more said that the availability of flexible payment options was important compared with 42% of those earning less than $100,000. Financing options were so important that 63% of those higher-income respondents said they would switch providers for no- or low-interest payment plans.
It used to be novel for healthcare providers to proactively offer patient financing programs, according to Spinner. Health systems historically collected 95% of their revenue from a third-party payer—the government or the health plan. In the past decade or so, he said, “the mix of revenue from consumers has gone way up.”
The pandemic’s widespread financial impact has made patient financing programs essential for both consumers and providers.
On AccessOne’s payment plan platform, consumers have adjusted their payment amounts—a feature Spinner calls a “shock absorber”—20% more this year. “It gives the consumer something to do other than default.”
According to interviews AccessOne conducted with 47 healthcare billing executives, 43% of providers reported increases in patient requests for payment plans even as hospitals face their own financial struggles and 40% report an increase in bad debt—medical bills they could not collect.
Spinner hopes providers will respond to their own financial pressure with generosity rather than aggressive debt collection.
“Show [patients] the jar of honey instead of the vinegar,” Spinner advises providers. “Let’s use something attractive and compassionate that’s in line with your mission in the community.”
The Pandemic May Give Consumers a Pass
Consumers facing medical bills they can’t afford should ask for help, especially now.
“Be an advocate for yourself,” Spinner said. “You get a pass now; it’s Covid.”
Michael Hammelburger, CEO of Cost Reduction Consultants, recommends that consumers insist on having medical bills recomputed. Given the high volume of bills processed every day, there’s a reasonable chance the bill is incorrect.
If the bill is accurate, Hammelburger says, negotiate. “In most cases, the medical facility can find a way to restructure your payment and arrange for a monthly payment scheme.”
If the bill is still too much to manage, Hammelburger suggests seeking financial help from local, state, or nonprofit agencies.
Spinner believes the pandemic has caused a tipping point that should give patients relief from financial anxiety.
“We’ve got to a better job connecting affordability to these consumers and helping them understand how they’re going to pay for this care,” he said. “We’re going to have a lot more proactive discussions about ability to pay.”