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‘Don’t get sick. It’s too expensive’: medical debt is putting more Americans in financial crisis | Health insurance

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In a few short months, 37-year-old Kimberly Cooley went from sprinting up stairs to faltering after several steps. Unbeknownst to her, she was experiencing a cascade of symptoms related to autoimmune hepatitis, a rare and chronic inflammation of the liver.

She was diagnosed, shot to the top of the liver transplant list, and quickly realized she could not handle the financial repercussions of such a surgery alone. A private person by nature, Cooley took the extraordinary step of publicizing her condition – a step she understood well as a marketing consultant.

In a matter of days, her loved ones raised more than $17,000 for her liver transplant surgery.

“I did have the support of friends and family,” said Cooley, 42, who lives in rural Duck Hill, Mississippi. “So it wasn’t as bad as it could have been.” Cooley is doing well. But her finances are another story.

She is more than $4,000 in debt to AccessOne, a private-equity backed medical credit card company. As transplant patients need ongoing medication and care, she expects that debt to roughly double next year.

“I start referring to it as ‘transplant life’,” said Cooley. “Things are going to pop up, and that’s just part of it.”

As a new year and presidential election approach, Americans face a worsening crisis: the affordability of healthcare. More Americans than ever, about 92%, now have health insurance – and simultaneously face enormous bills.

Over the last decade, insurers and employers have pushed more cost-sharing onto individuals and families. Now, squeezed by medical costs and inflation, more than 100 million Americans have medical debt and roughly the same proportion report avoiding a prescription because of it.

Sara Collins, a health policy scholar and vice-president at the Commonwealth Fund, said “those are the trends we’ve seen”, referring to “growth in healthcare costs, household incomes that haven’t kept pace with those costs, and employers’ use of increased cost-sharing”.

Cooley’s story represents the intersecting issues that plague the health system, as high prices and a push to offload those costs to patients collide.

For ‘Obamacare’ plans, deductibles can range up to $9,050 per year. Photograph: Stock4B Creative/Getty Images

“Those trends are all still there, they haven’t changed, and unless they’re addressed”, problems will continue, added Collins.

The Biden administration has sought to make these struggles a centerpiece of the upcoming campaign. His administration has taken aim at medical credit card companies, like AccessOne; instructed Medicare to negotiate prescription drug prices for the first time; and is writing rules to stop medical debt from appearing on credit reports.

Biden’s administration also continued the rollout of the No Surprises Act, originally signed by Donald Trump, which bans doctors and hospitals from sticking consumers with a “balance bill” when they can’t agree with insurers on a fair price.

Trump, the leading Republican presidential candidate, also has an extensive record on healthcare. He led a failed repeal of the Affordable Care Act (ACA), better known as Obamacare, which would likely have left tens of millions of Americans uninsured and effectively worsened healthcare rationing by income. He infamously tilted the balance of the supreme court to the right, which led to the reversal of a constitutional right to an abortion and the severe abortion restrictions across a large swath of conservative southern states.

Now, campaigning for a second term, Trump has said “Obamacare sucks”, and vowed to try to “replace” it. He’s offered no details of such a policy.

Neither candidate has squarely tackled the biggest issue in American healthcare: its cost.

The US health system sucks up a whopping 16% of gross domestic product (GDP). That’s more – by a long shot – than any other wealthy, developed nation. France and Germany are the next closest, according to the Organisation for Economic Co-operation and Development (OECD), which each spend around 12% of GDP on healthcare.

Over roughly the last decade, insurers and employers have sought to push more of those growing costs onto patients, which has in turn revealed the unfinished work of Obamacare.

The focus of the ACA was to get more people insured, and was very effective at doing so through both Medicaid and markets for individuals to buy health insurance, which is where Cooley got her health plan.

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It did not focus on employer-based health coverage, since those were generally comprehensive and heavily subsidized by tax breaks to companies. Since the ACA, as health insurers have been required to provide more comprehensive coverage, they have also pushed costs onto the insured.

More than half of Americans (51%) now have trouble handling out-of-pocket insurance expenses, according to a survey by the Commonwealth Foundation. High-deductible health plans offer a flagrant example of why.

Laurie, a 62-year-old resident of the Atlanta, Georgia, metro area, is required to spend $7,450 each year before her insurance kicks in. As a result, she buys her ulcerative colitis medications from Canada at roughly a 90% discount from the American price – which is typically around $1,800 for a 90-day supply.

“The insurance companies are now sticking it to everyone with the maximum out-of-pocket and deductibles,” said Laurie, who asked that her last name not be used because she worried about the legality of buying drugs internationally. “By the way, I pay $120 a month for the privilege of having this plan.”

In another case, a mother of six in Ohio said she faced a $6,000 deductible for an employer plan that “barely pays anything”. She now avoids taking her children to the doctor for small colds, because she has to pay a $95 co-pay for each doctor’s visit.

A white woman, her face out of the frame, sits in a rocking chair feeding a newborn from a bottle.
A study found that children enrolled in their parents’ high-deductible plans scored worse on seven out of 10 health metrics. Photograph: Portland Press Herald/Getty Images

“We feel as if we are being forced to carry this insurance for fear that one of us may have an accident or illness and have no insurance to cover it at all,” she said, adding her husband’s pay as a welder would be much more “sufficient” if insurance costs weren’t so high.

A slew of studies show how high-deductible plans can make a family’s life precarious. One study found that such plans “substantially and problematically” reduce how often low-income diabetics seek care. Another found that children enrolled in their parents’ high-deductible plans scored worse on seven out of 10 health metrics. A third found that people with high-deductible health plans are more likely to be in medical debt, and subsequently have difficulty affording food and housing.

Still, a shockingly high number of health plans, especially on marketplaces, include these provisions. For “Obamacare” plans, like Laurie’s, deductibles can range up to $9,050 per year.

The chronically ill also face special challenges. Cooley has no deductible, and out-of-pocket expenses are capped at $3,150 per year. A healthy person might never hit that limit. But Cooley will reach it every year.

What’s more, Laurie points out, she still faces dental bills, for which health insurance is useless.

“That insurance doesn’t cover your hearing, your teeth, your eyes,” said Laurie, who said a dentist told her that replacing a single problematic crown would cost her $5,000. “I’m like, those aren’t part of my body?”

Hundreds of millions of American adults will likely nod in agreement with a conclusion Laurie reached : “Don’t get sick. It’s too expensive.”

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