If you have health insurance or not, these tips can help lower medical bills

Discussing financial concerns during a medical visit can lead to cost-saving options. 
(National Cancer Institute photo, Unsplash)

Over the past five years, insurance premiums, deductibles, co-insurance and drug costs have all surged, leaving many Americans with medical debt or choosing to forego needed treatment or medication because it's too expensive. 

But there's a healthier approach to medical treatment that can lead to substantial cost savings -- talking to your doctor about your costs and the need to seek budget-friendly options whenever possible, write professors Helen Colby and Deidre Popovich for The Conversation.

"Why don’t more people have conversations about cost? One study shows that cost conversations occur in only about 30% of medical visits," Colby and Popovich explain. Talking to your doctor about costs "can be crucial when a recommended procedure has multiple alternatives. . . . Speaking up about price can help patients stay healthier and avoid the all-too-common trade-off between medical care and household expenses."

Instead of delaying treatment or going through with a treatment and then worrying about its cost when the bill arrives, Colby and Popovich suggest ways to ask your medical provider for help and flexibility to lower costs. 

Ask for a generic drug or an alternative medicine if no generic is available. They write, "Research on physician–patient cost conversations shows that switching to lower-cost, clinically similar alternatives within the same drug class is a common strategy for reducing out-of-pocket spending without compromising care." 

Ask your doctor or pharmacist whether any manufacturer coupons or co-pay assistance programs are available. Sometimes, being willing to have your medicine shipped by mail can also save money.

Seek out information about hospital programs or charity options that help cover costs. While some aid options may be linked to Medicaid programs, many are administered by state and county groups. "Patients can often find these programs through hospital or health system websites, which typically include financial assistance or 'charity care' pages," Colby and Popovich add. "Nonprofit organizations and patient advocacy groups may also offer or list assistance tailored to specific conditions or medications."

Don't be afraid to ask, "What will this cost me, and are there other options?" they advise. "This question also opens the door to alternatives. . . . A brief, honest conversation about cost can lead to more affordable and more sustainable care." 

The price of hospital services is driving health care costs and insurance premiums to climb nationwide

Patients and employers are impacted by increases health premiums. 
(Graphic by wildpixel/iStock/Getty+ via Conversation CC)

The American public may perceive hospitals as part of their community’s care network, but in reality, many hospitals and specialty clinics are businesses that strive to make a profit. 

As more medical systems in communities of all sizes have consolidated, hospital pricing has become the biggest driver of rising medical costs and steep health care insurance premium hikes.

“Health insurance premiums in the U.S. significantly increased between 1999 and 2024, outpacing the rate of worker earnings by three times, according to our newly published research in The Journal of the American Medical Association Network Open,” write economic experts Vivian Ho and Salpy Kanimian from Rice University in Houston, Texas, for The Conversation. 

Using federal information and data from the Kaiser Family Foundation, Ho and Kanimian found that “the cost of hospital services increased the most, while the cost of physician services and prescription drugs rose more slowly.”

Many hospitals, including those with nonprofit designations, often aggressively price their services and care well above their costs, Ho and Kanimian point out.

“One study found that for nonprofit health systems, the greatest pay increases between 2012 and 2019 went to hospital CEOs who grew the profits and size of their organizations the most,” Ho and Kanimian explain. In contrast, any emphasis on charity care by those systems was not linked to CEO pay. 

Ho and Kanimian suggest a way to help “ensure that nonprofit hospitals make the health of their local communities a top priority by requiring their boards to disclose their executive compensation guidelines for salary and bonuses, similar to the information that for-profit health care companies disclose to their stockholders.” Such a shift could help communities push for better care and lower costs for patients as determinants of executive pay and bonuses. 

Some economists suggest that “hospital prices should be regulated. This approach involves capping prices for health care services at the most expensive hospitals and restricting price growth for all hospitals,” Ho and Kanimian write.

Both parties agree medical debt is a burden for many Americans and are working to pass laws that offer relief

Solving Americans' medical debt problems has
bipartisan support. (Photo by K. Sikkema, Unsplash)

Lawmakers from both parties agree too many Americans are saddled with medical debt and the problem requires bipartisan intervention. "Democrats and Republicans in statehouses around the country have been quietly working together to tackle the nation’s medical debt crisis," writes Noam N. Levey of KFF Health News. Florida House Speaker Paul Renner, a conservative Republican, told Levey, "Regardless of their party, regardless of their background . . . any significant medical procedure can place people into bankruptcy. This is a real issue."

Some states have passed laws banning unpaid medical bills from consumer credit reports and "restrict medical providers from placing liens on patients’ homes," Levey writes. A significant medical debt can cause a financial spiral for people who end up "draining savings, taking out second mortgages, or cutting back on food and other essentials."

States are trying different approaches to address the problem. "When Arizona consumer advocates put a measure on the ballot in 2022 to cap interest rates on medical debt, 72% of voters backed the initiative."

Legislative efforts to bar medical debts from consumer reports or to limit a hospital's collection activity vary from state to state. "When Colorado last year became the first state to bar medical debt from residents’ credit reports, just one Republican lawmaker backed the measure," Levey writes. "New Mexico state Sen. Steve Neville, a Republican who backed legislation to restrict aggressive collections against low-income patients in that state, said he was simply being pragmatic."

More than $1 billion in medical debt abolished for Appalachians by RIP Medical Debt organization

A national nonprofit announced recently that it has abolished more than $1 billion in medical debt for people in the Appalachian region. RIP Medical Debt, a nonprofit "that raises funds from donors and uses them to acquire and abolish medical debt for people who are financially burdened" has a program that focuses specifically on people in Appalachia, "one of the poorest and least healthy areas of the U.S.," according to information from the organization.

The region's campaign to wipe out medical debt began in 2019 "with the generous support of two families with ties to the region – Jim and Sharen Branscome and Bill Bishop and Julie Ardery – whose donation wiped out $10 million of medical debt for 10,000 individuals in Appalachia. The Branscome's ongoing fundraising has played a major role in reaching the 1 billion dollar milestone." Read more about that donation and the funders' connection to the area here.

According to the organization, Appalachia comprises 423 counties across 13 states and spans 206,000 square miles, from southern New York to northern Mississippi. The region is home to 26.3 million residents. "While it has made progress in recent years, it still lags behind the nation in key socioeconomic indicators. Just under 1 in 7 people in Appalachia are in poverty, and approximately 2.2 million people are uninsured. With higher debt burdens than other parts of rural America, nearly 1 in 4 Appalachians have medical debt in collections."

RIP Medical Debt works nationally to relieve people of medical debt, which in turn helps individuals "enhance their economic opportunities and enable them to live healthier lives. RIP’s criteria for debt relief are those individuals who are four times or below the federal poverty level or those with medical debt that is 5% or more of their gross annual income. Medical debt relief cannot be requested . . . ."

Since RIP Medical Debt's inception in 2014, "more than $10.4 billion of medical debt has been abolished, helping more than 7 million people. Medical debt often results from unplanned, unexpected illnesses and accidents. About one-third of U.S. adults have difficulty covering unexpected health care bills."

Federal consumer watchdog warns about the risks of medical credit cards, which can raise costs, hurt the poor

By Noam A. Levey

KFF Health News

The Biden administration on Thursday cautioned Americans about the growing risks of medical credit cards and other loans for medical bills, warning in a new report that high interest rates can deepen patients’ debts and threaten their financial security.

In its report, the Consumer Financial Protection Bureau estimated that people in the U.S. paid $1 billion in deferred interest on medical credit cards and other medical financing in just three years, from 2018 to 2020.

The interest payments can inflate medical bills by almost 25 percent, the agency found by analyzing financial data that lenders submitted to regulators.

“Lending outfits are designing costly loan products to peddle to patients looking to make ends meet on their medical bills,” said Rohit Chopra, director of CFPB, the federal consumer watchdog. “These new forms of medical debt can create financial ruin for individuals who get sick.”

Nationwide, about 100 million people — including 41% of adults — have some kind of health-care debt, KFF Health News found in an investigation conducted with NPR to explore the scale and impact of the nation’s medical-debt crisis.

The vast scope of the problem is feeding a multibillion-dollar patient-financing business, with private equity and big banks looking to cash in when patients and their families can’t pay for care, KFF Health News and NPR found. In the patient financing industry, profit margins top 29%, according to research firm IBISWorld, or seven times what is considered a solid hospital profit margin.

Millions of patients sign up for credit cards, such as CareCredit, offered by Synchrony Bank. These cards are often marketed in the waiting rooms of physicians’ and dentists’ offices to help people with their bills. The cards typically offer a promotional period during which patients pay no interest, but if patients miss a payment or can’t pay off the loan during the promotional period, they can face interest rates that reach as high as 27%, according to the CFPB.

Patients are also increasingly being routed by hospitals and other providers into loans administered by financing companies such as AccessOne. These loans, which often replace no-interest installment plans that hospitals once commonly offered, can add hundreds or thousands of dollars in interest to the debts patients owe.

A KFF Health News analysis of public records from UNC Health, North Carolina’s public university medical system, found that after AccessOne began administering payment plans for the system’s patients, the share paying interest on their bills jumped from 9% to 46%.

Hospital and finance-industry officials insist they take care to educate patients about the risks of taking out loans with interest rates, but federal regulators have found that many patients remain confused about the terms of the loans. In 2013, the CFPB ordered CareCredit to create a $34.1 million reimbursement fund for consumers the agency said had been victims of “deceptive credit card enrollment tactics.”

The new CFPB report does not recommend new sanctions against lenders. Regulators cautioned, however, that the system still traps many patients in damaging financing arrangements. “Patients appear not to fully understand the terms of the products and sometimes end up with credit they are unable to afford,” the agency said.

The risks are particularly high for lower-income borrowers and those with poor credit. Regulators found, for example, that about a quarter of people with a low credit score who signed up for a deferred-interest medical loan were unable to pay it off before interest rates jumped. By contrast, just 10% of borrowers with excellent credit failed to avoid the high interest rates.

The CFPB warned that the growth of patient financing products poses yet another risk to low-income patients, saying they should be offered financial assistance with large medical bills but instead are being routed into credit cards or loans that pile interest on top of medical bills they can’t afford.

“Consumer complaints to the CFPB suggest that, rather than benefiting consumers, as claimed by the companies offering these products, these products in fact may cause confusion and hardship,” the report concluded. “Many people would be better off without these products.”

Some local governments show the way to slaying medical debt with federal relief money, for pennies on the dollar

(Photo by Micheile dot com, Unsplash)

Do your local governments have some pandemic relief money that hasn’t been spent or appropriated? Perhaps they would be interested in helping to wipe out local residents’ medical debt for pennies on the dollar, as some have. "Local governments in Ohio and Illinois are using American Rescue Plan Act money to relieve residents struggling with medical debt by partnering with an organization that buys debt and wipes the slate clean for debtors. It’s a strategy advocates say could be duplicated across the country to help erase a multi-billion-dollar problem," reports Casey Quinlan of States Newsroom.

Toledo is an example where $800,000 of ARPA funds were used to erase eligible residents' medical debt and "Commissioners in Lucas County, of which Toledo is a part, also announced they would contribute $800,000 in ARPA funds," Quinlan writes. "The combined $1.6 million will go to RIP Medical Debt, a nonprofit based in New York, which buys medical debt from hospitals in bundles at a much lower price than the actual debt, allowing the money to go further." Michele Grim, a Toledo City Council member who pushed to have RIP Medical Debt help with the transactions, said, "This means that $190 million to $240 million of community members’ debt will be eliminated."

The sheer size of medical debt can be overwhelming for many Americans. "According to a Kaiser Family Foundation report published in June, 4 in 10 adults in the United States have some kind of medical debt, and 1 in 5 of those with health care debt don’t think they will ever be able to pay off their debt," Quinlan reports. "The Consumer Financial Protection Bureau estimates the total amount of medical debt in the U.S. at $81 billion, based on data from credit reporting agencies, but acknowledges its total is likely understated."

Allison Sesso, president of RIP Medical Debt, told Quinlan that more local governments have reached out to the group to use ARPA funds to wipe out medical debt after learning about Toledo's and Cook County’s efforts: “I think it was sort of a no-brainer for anyone that’s focused on health equity and the recovery, post-Covid, on their communities, to get rid of this medical debt burden from people as quickly as possible.”