Over 65? Beware Medical Debt

“As we age, we’re more likely to need health care, and the complexities of being disabled or not able to deal with paperwork and financial situations also get worse,” says Amin, associate director of the Peterson-KFF Health System Tracker at KFF, formerly the Kaiser Family Foundation. “They might not be savvy enough to know how to negotiate or have the support to negotiate.”

Worse still, nearly 8 in 10 Americans with medical debt report forgoing or delaying health care or prescription drugs and nearly 15 percent say they have been denied additional care by a medical or dental provider, a KFF survey found.

Problem getting worse 

There are many reasons that this problem has been getting worse, according to researchers.

Older patients need more complex care, for instance, which requires more elaborate medical coding that is easy to get wrong. Hospitals and medical practices and their billing departments have increasingly consolidated, bringing together mismatched systems.

The payment processes of Medicare and supplemental insurance companies also sometimes fail to sync up, leaving providers to bill people directly; consumers who reported having several layers of insurance are actually more likely to report problems with inaccurate billing than those who have only Medicare, the CFPB finds. Ninety-five percent of adults 65 or older have Medicare and 46 percent have supplemental private coverage, according to the National Center for Health Statistics; fewer than 1 percent are uninsured, by far the lowest proportion of any age group.

“We have this crazy quilt health care system, and it’s absolutely geared to confuse patients and the general public,” says Len Kirschner, a doctor and former director of the Arizona Health Care Cost Containment System. “It is so complicated that even people who are expert at it are confused by it.”

In the worst cases, says Kirschner, 87, who lives near Phoenix, unpaid medical bills to older adults “are sent to a collection agency and they are hammered by the collection agency.”

Some of these charges are legitimate, says Loren Adler, a fellow and associate director at the Brookings Schaeffer Initiative on Health Policy. Older adults who don’t have supplemental medical insurance can face copays of as much as 20 percent and four-figure deductibles for inpatient hospital admissions.

“That, in many cases, is going to leave folks with a pretty substantial bill,” Adler says.

Many errors

But many charges are billed in error, according to the CFPB report, which is based in part on about 1,100 debt collection and more than 300 credit-reporting complaints made to the agency about Medicare billing.

“We systematically see populations that are well covered, well insured, including dually eligible Medicare-Medicaid beneficiaries, with high percentages of unpaid bills,” says Hector Ortiz, a CFPB senior policy analyst who worked on the study.

Some, he says, were billed for services that should have been covered. In other cases, providers failed to submit their claims correctly.

Many people learn about these errors when the debt collectors start to call. “And at that point, it’s difficult for an older adult to fix the problem. They have to go back to the provider, they have to collect the documentation. It’s a time-consuming process,” Ortiz says. And “it’s placing that burden on people who can’t use the internet or don’t have digital skills or access.”

Forty-one percent of U.S. consumers who experienced at least one billing mistake in the past five years were “significantly frustrated” trying to correct it, a January survey by the claims and payments company Zelis found. A similar proportion spent up to a month getting bills corrected, and 70 percent spent more than two hours trying to resolve an error.

Patients often “just end up paying the bill to get people out of their hair, if they have the money or can scrounge it together,” Adler says. “There’s only so much fighting folks want to do here. Then there’s the time suck of trying to fight it and trying to figure it out. Everyone has done the runaround with insurance companies and providers to try to fix something.”

The White House announced on Sept. 21 a proposal to keep medical bills off a person’s credit report. The CFPB, which is working out the details, said in a statement that including medical debt in credit scores is problematic because “mistakes and inaccuracies in medical billing are common.”

Threats to a patient’s credit reports is a common collection tactic used by hospitals, according to KFF Health News.  “These measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future,” Vice President Kamala Harris said.

As for Domingo, she has no plans to give up.

“Living hell,” she calls her yearslong fight with her insurer, chuckling. “I had a whole notebook full of people I spoke to, whether it was the insurance company, whether it was the distributor. You never really get a straight answer. You talk to 20 different people, and you get 20 different explanations.”

But she adds, “I’m going to fight till the last bit of breath in me.”