Seeing Red

The nexus of the growing problem of medical debt and the inauguration of a sympathetic president may buoy prospects for overhauling health care, one of the top priorities of the incoming administration.

During the campaign, President-elect Barack Obama talked about his mother, who died of ovarian cancer in 1995 at 53. "In those last painful months, she was more worried about paying her medical bills than getting well," he said. Obama has said he supports creating an exemption for medical debt in stringent new bankruptcy laws.

Tackling the problem on a national level will involve replacing the mystifying welter of insurance plans with a standard, comprehensive benefits package that limits consumers' exposure to out-of-pocket costs, some experts say. Currently "there are no real standards for plans, so there are an infinite number of options," said Mark Rukavina, executive director of the Access Project, a Boston-based research and advocacy group that focuses on medical debt.

Transparency is also important, Rukavina said. Insurance policies are typically written in "intentionally confusing and unclear" language that can make it virtually impossible for consumers to figure out what is covered and how much they owe.

Economist Thomas P. Miller of the American Enterprise Institute, a conservative Washington think tank, said he believes the problem of medical debt has been exaggerated and is a symptom of the broader economic crisis. The solution, he said, should not be "to kill people with kindness" by requiring an overly expansive and expensive benefits package that could "preempt the use of resources for other purposes."

Unwilling to wait for federal action, a handful of states, most notably Massachusetts, have passed laws designed to expand health coverage or to protect medical debtors. An Illinois law passed last year caps rates that hospitals can charge the uninsured, while a New York statute bars foreclosures intended to pay off medical bills.

For now, Althea Saunders-Ranniar, a financial coach at the Bon Secours of Maryland Foundation, a nonprofit that works with low- and moderate-income residents of Baltimore, predicts that unraveling medical bills will consume an even larger part of her workday. "Everyone I see has medical debt," she said.

Many of her clients receive one bill from a hospital and five or more from physicians or labs, each of which she must parse and, possibly, negotiate. "It becomes very difficult to figure out," she said.