HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Tuesday, September 11, 2012

The Persistence of Medical Debt

Yesterday's Boston Globe reported that despite the health care reform in Massachusetts that has been in place since 2006, the scope of medical debt in the state has not changed significantly. According to the Globe, in the fall of 2010, 20% of Massachusetts adults reported having medical debt and paying it over time, despite the health care reform law requiring all residents to have health insurance. So what can we learn from the Massachusetts experience? It appears that much of the debt is due to high deductibles and co-pays that insured people cannot pay. Because much of Massachusetts' population was insured even before the state health reform law became effective, the reform did not significantly change the situation of insured people.

In contrast, In Oregon, where 35,000 low-income adults were randomly selected to receive Medicaid coverage, the evidence is that they were 25% less likely to have medical debt than those who did not have the coverage. So what can we learn from this? Having insurance is better than not having insurance as far as medical debt goes, but unless we address the high costs of medical care (which results in payment of the maximum deductible and high co-pays for the patient) in general, health care reform mandating insurance coverage will not solve the medical debt problem. The next step in health care reform has to be serious consideration of ways to reduce medical costs without compromising quality of care.

Recent articles in the Washington Post and the New York Times suggest some ways to start bringing down these costs. As the New York Times reports about a screening test for ovarian cancer, many screening tests are ineffective and actually lead to more costs for no benefit. Inculcating a mindset in the population (and in physicians) that "more is not always better" when it comes to medical tests would be a start.

The Washington Post reported that one quarter of Medicare beneficiaries end up spending all their assets on health care in the last five years of life, with average out-of-pocket spending of $38,688. Much of this appears to go to nursing home care, which is not covered by Medicare in most circumstances. Just as we updated the Medicare benefits package to cover prescription drugs, perhaps it is time to update the Medicare benefits package to cover nursing home care, or at least a portion of it. We found a way to finance the drug benefit, why not the other thing that virtually every senior will use, nursing home care? 


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