President Obama's Affordable Care Act (ACA) paved the way for action to reduce the financial burden of medical debt and ensure no U.S. citizen would be refused health insurance due to preexisting conditions.
Unfortunately, the ACA was not enough to altogether remove the chance you could be financially ruined by medical debt. So many Americans are struggling to make ends meet because of mounting medical bills (even when utilizing medical debt consolidation options), while others risk their health by avoiding getting medical care at all just because of the cost.
Now President Biden's administration has taken steps to help millions of Americans reduce their medical debts with new legislation, but is it too little too late? And is there anything more that can be done?
Changes already made to healthcare costs and medical debt
Luckily, new changes have already been enacted by the federal government, state governments, and even private companies to reduce the potential for accruing medical debt and its consequences.
The White House directed federal agencies to:
- Work on relieving medical debt for veterans
- Remove medical debt as a data point for determining eligibility for federally-backed mortgages
In addition, Congress enacted a cap on the price of insulin for Medicare recipients, causing pharmaceutical manufacturer Eli Lilly to expand the cap for all insulin users, regardless of Medicare eligibility.
State governments in California, Colorado, Maryland, and New York have implemented new laws that expand consumer protections while also requiring hospitals operating in their states to increase financial aid options for patients.
Finally, all three credit reporting bureaus - Equifax, Experian, and TransUnion - have stopped including unpaid medical debts under $500.
There's more to be done.
While some start is better than none, there's still more work to be done to ensure Americans receive the medical care they deserve without worrying about how it could affect their finances.
While some medical debt will be stricken from credit reports, the limit of $500 seems to be unreasonably low and doesn't take into consideration that medical bills could be "hidden" from the rule as many healthcare-related expenses are simply added to credit card balances or money borrowed from relatives.
Consumer and patient advocates are also putting pressure on the federal and state governments to enact further protections for patients, including:
- Requiring tax-exempt hospitals to make financial aid more readily accessible as many non-profit medical facilities make "charity care" notoriously difficult to find and apply for.
- Asking the IRS to issue requirements for financial aid across the board. Currently, many hospitals will only offer assistance for income levels under $13,590/year, while others provide more generous limits, some as high as six-figure incomes.
- Strengthen limits for how much non-profit hospitals can charge.
- Curtailing the ability for nonprofit hospitals to have the ability to foreclose on patients' homes or deny medical care due to outstanding bills. Approximately 1 in 5 hospitals will deny non-emergency care to patients with medical debts, while over two-thirds will sue for garnished wages and place liens on properties until their debts are paid in full.
There is also the option for the federal government to create a nationwide single-payer healthcare option, but this seems to be a low priority for both Congress and the White House.
The bottom line
Consumer advocates are leading the way for better healthcare options that don't involve crippling medical debt, but there's still more work to be done. With the help of our elected officials, we can ensure that everyone has access to quality, affordable healthcare without worrying about the cost.
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