Progress On Paying Personal Medical Debt Slows

Reports foreshadow rise in number of people struggling to pay off health bills.

As more employers shunt their workers into high-deductible health plans and employees’ out-of-pocket health costs rise, workers’ ability to pay what they owe may become more challenging. Two new reports suggest that the recent progress made on consumers’ ability to pay off their medical bills may be coming to an end and, in fact, may be getting worse.

The first report, from the U.S. Consumer Financial Protection Bureau, said overdue medical bills were the most frequent type of unpaid bill for which consumers were contacted by a debt collection agency.  The CFPB’s 66-report is based on a survey of more than 2,000 consumers about their experiences with debt collection.

Some 59 percent of the consumers surveyed by the CFPB cited past-due medical bills as the reason they were contacted by a debt collection agency followed by unpaid phone bills (37 percent), unpaid utility bills (28 percent), unpaid taxes (21 percent), unpaid legal judgements or expenses (14 percent) and overdue rent (11 percent). Unpaid medical bills topped the list regardless of consumers’ income, credit history or age.

“The prevalence of past-due medical debt regardless of consumer characteristics makes this type of debt collection unique among those types examined in the survey,” the CFPB said.

The second report, from the National Center for Health Statistics, said the percentage of people having problems paying their medical bills dropped again during the first six months of 2016, but that trend may be slowing.

In its 11-page report, the NCHS said the percentage of the U.S. population in families who had difficulty paying their medical bills over the previous year regardless of insurance status dropped to 16.2 percent in the first half of last year compared with 21.3 percent in 2011. But, that’s down just 0.2 percentage points from 16.4 percent in 2015.

Of most interest to employers and their workers, the percentage of people with private insurance in families who had difficulty paying their medical bills actually rose to 12.6 percent during the first six months of 2016 from 12.4 percent in 2015, the NCHS report said. That reverses a steady five-year decline since 2011 and suggests that more employees are struggling with their higher out-of-pocket health care expenses.