The Kaiser Family Foundation released a report recently that says as many as one in three Americans are having a hard time keeping up with healthcare-related debt. The problem isn’t exclusive to the uninsured – people covered under various health insurance plans are also falling behind on their medical bills.
Too many Americans are choosing the lowest rung of health insurance plans, which means that when they get sick or become injured, their deductible is too high for them to easily pay. When limited income meets a high cost-sharing plan, the result is often a scenario that includes collections.
Most working and insured people believe that their insurance will pick up the tab should they ever become seriously ill. What they don’t know about their insurance plans came back to haunt them later.
Other scenarios that lead to collections includes a person who is too sick to work, which means there is no money coming in as the medical bills pile up. Others incur unexpected expenses related to out-of-network care, which is almost always more costly than care provided within the health plan’s network.
How are patients keeping up with these costs? In some unfortunate cases, high APR credit cards are being used, which means the patient will have an ongoing cycle of debt that is difficult to escape from.
The end result, according to the Kaiser report, is that these patients experience bankruptcy, problems keeping their housing, emotional stress, badly damaged credit and a loss of long term assets. The study proves that medical debt can affect just about anyone. Looking at a range of patients from age 20 to 60-plus, some were making $100,000 a year yet had medical costs high enough to put a strain on their finances.
Of course, the poor and lower middle class are probably the most affected demographic. Four in 10 adults with incomes below 200 percent of the federal poverty level said they had issues paying their medical bills. People with larger families also had more trouble paying their medical-related costs.
Surprisingly, the larger group of people who said they had trouble with their payments had insurance through their employer. Fifty-four percent said they had employer-sponsored private insurance. Thirty percent said they were uninsured. Only nine percent were on Medicaid, four percent had private/individual insurance and three percent were on Medicare.
What does this mean for medical practices? Clearly, a plan to recover as much that is owed to them as possible is in order. In many cases, establishing best practices in billing can reduce the amount of patients that come to the office with outstanding debt. Bringing in a third party debt collection firm is also a good move toward ensuring that cash flow will go uninterrupted.
Omega-RMS offers collections solutions that keep medical practices in the black. Whether its accounts receivables management, early intercept recovery services or contingent collection services, Omega has flexible solutions that are a perfect match for the healthcare industry.