Build Back Better is dead and not everything that comes out of its grave will involve health care. Prescription drug pricing – excuse me,”negotiation” – has no chance of making it through the Senate. Of course, some things can be done without Congress. Recently, the Biden administration announced that he, through the power of the almighty pen and telephone, would take executive action on multiple fronts to help ease the pain some Americans are feeling from medical debt. Before we get to that, though, let’s look at the problem of medical debt by United States.
Medical bills are widely cited as one of the leading causes of bankruptcy in the United States – although the data is not always clear. According to the surveymedical debt contributes to, or is the direct cause of, anywhere between more than a quarter and more than 62% of bankruptcies. Different definitions are to blame for the wide range – there is no obligation to state the cause of a declaration of bankruptcy, so we must rely on investigations. A Harvard study published in 2005 (and co-authored by current Senator Warren) found that 46.2% of respondents in 2001 cited medical expenses as the reason for their bankruptcy. the same authors in 2009 found that 62.1% of bankruptcies in early 2007 were caused by medical bills. A 2011 study noted that the reimbursable medical expenses contributed to 26% of low-income adult bankruptcies between 1992 and 2004, and aother found that 18-26% of bankruptcies in 2013 were caused by medical bills. A 2015 Kaiser Family Foundation Study found that one million adults filed for bankruptcy due to medical bills. So the numbers are everywhere, but what is clear is that a big group of Americans are facing financial hardship and potential bankruptcy due to medical debt.
Caution should be exercised before jumping to conclusions about however these results. For paraphrase a study author: Bankruptcy does not normally have a single cause, and a multitude of factors play into a person’s decision to declare bankruptcy. Especially, as As bad as the data above may seem, the average American is not saddled with a large amount of medical debt. Citing the Consumer Financial Protection Bureau (CFPB) and several other studies, Benedic Ippolito of the American Enterprise Institute testified that the median level of medical debt in the US is only slightly over $300 and only 16-18% of credit reports include medical collections – although they represent the majority of all business lines of collections on consumer credit profiles. People with new medical debt are more likely to be in their 20s – this age group has higher rates of uninsured and lacks more comprehensive (more expensive) coverage.
So what will the Biden administration do? Unlike his poorly designed and regressive student loan deferral policythis will not defer payment of medical debts. Instead, the administration will be tell all the agencies to “eliminate medical debt as an underwriting factor in credit programs. AUnder the policy, medical debt will no longer affect Department of Agriculture Rural Housing Services loan applications, the Department of Veterans Affairs (VA) will no longer report medical debt for veterans, the Small Business Administration is examining ways to reduce the burden of medical debt on business owners, and the Federal Housing Finance Agency is reviewing its credit models at Fannie Mae and Freddie Mac. Besides, the VA will make it easier for veterans to apply for medical debt forgiveness and simplify the income thresholds for medical debt forgiveness. Separately, the administration also plans to hold vendors accountable for potentially illegal collection tactics — a response to recent revelations than lawsuits for unpaid hospital bills have skyrocketed over the past decade. The Department of Health and Social Services will assessProvider billing practices and their impacts on access to health care, the publication of data and evaluations, and the weighting of this information when allocating subsidies to hospital systems.Finally, the CFPB Investigate credit reporting companies and debt collectors and educate consumers about their medical debt rights.
Is it okay initiative solves our medical debt problem? Not really. Most unpaid medical debts are no longer reported seven months after they first appear on a credit report. And studies have shown that reductions in medical collections do not lead to an improvement results in other measures of financial health, including credit scores. That said, this initiative will bring federal policies closer to recent private sector moves by the big three credit agencies to no longer report most medical debt starting in 2023. Now, that may have repercussions: creditors may start weighing other creditworthiness measures more heavily, which could have different consequences for consumers. But, in general, most financial institutions seem to have already reached the conclusion just drawn by the federal government: medical debt is not a major sign of creditworthiness. This executive action does not diminish healthcare costs and probably won’t prevent bankruptcies, but it’s a rare act of good governance by this administration, and for that the president is to be commended.
Chart review: Insulin price trends, 1991-2020
Recent research from the American Action Forum detailed the cost of insulin from the 1990s to 2020, based on data from the Centers for Medicare and Medicaid Services. Insulin price growth has accelerated since 1991, with only a respite in recent years. The list price of insulin per milliliter in the United States has increased, on average, 2.9%annually from 1991 to 2001, 9.5% annually from 2002 to 2012, 20.7 percent annually from 2012 to 2016, and 1.5 percentannually from 2016 to 2018. New data shows that this slowdown in growth translated into broad price reductions for the first time in 2020 for all types of insulin except new ultra-acting insulins. long, as shown in the graph below. The average price of all insulin products fell by 6.2% between 2018 and 2020; however, average prices per unit are still double what they were in 2012. It should be noted that the data is for list prices and does not take into account discounts, which are generally known to be quite large in the market. insulin.
Tracking COVID-19 cases and vaccinations
Margaret Barnhorst, Health Care Policy Fellow
To track the progress of vaccinations, the Weekly Report will compile the most relevant statistics for the week, with the seven-day period ending on Wednesday of each week.
Sources: Centers for Disease Control and Prevention Trends in COVID-19 cases and Death in the United Statesand Trends in COVID-19 vaccinations in the United States
Note: The US population is 332,615,808.
