The three major credit bureaus—Equifax, Experian and TransUnion—have a big influence on the financial well-being of millions of Americans. For the many in our country who are burdened by medical debt, the bureaus plan to remove nearly 70% of that debt from consumer credit reports. Further illustrating how dire the situation is, the White House recently announced a medical debt initiative as well.
Medical debts below $500 will no longer be included, and patients will have 12 months to square up outstanding balances that are in collections before their credit report gets dinged. Credit bureaus will also completely remove paid medical debts from credit reports, instead of simply marking them as “paid.”
These are helpful accommodations for the 1 in 3 Americans who are living with medical debt. But affordability in the first place is the real challenge. Even people with insurance can receive a bill for well over $2,000 from spending just one day in the hospital. Many of them are eligible for financial assistance and don’t even know it.
Financial assistance programs are like preventive care
Hospitals have a tool at their disposal that specifically addresses affordability for their patients. Financial assistance programs are already established at hospitals throughout the country—nonprofit hospitals are required to have them, and already offer them—and these programs can prevent many patients from having accounts sent to collections in the first place.
Hospitals also benefit from connecting patients eligible for financial assistance with their program. Patients need to know their hospital has a financial assistance program, and these programs must be accessible and easy for patients to navigate.
The White House is getting involved
The White House recently announced new actions to lessen the burden of medical debt, stating providers “should make it easy for eligible patients to receive the financial assistance they are entitled to.” All too often, financial assistance programs are difficult to find or have a complex application process.
The White House’s plan involves reform in four areas: Hold medical providers and debt collectors accountable for harmful practices; reduce the role that medical debt plays in determining whether Americans can access credit; help over 500,000 low-income American veterans get their medical debt forgiven; and inform consumers of their rights.
Who qualifies for financial assistance?
There’s a common misperception that a term like “financial assistance” only applies to the poor and destitute. But the threshold for qualification is higher than most people would think.
These programs typically extend to individuals with household incomes several multiples of the federal poverty guidelines. In other words, many working families and fixed-income households are often eligible.
It can’t be too complicated
People who are being admitted to a hospital, whether for a planned procedure or in case of an emergency, have enough on their plate. Filling out pages and pages of forms and questionnaires, and requesting copies of and printing out sensitive financial information is no fun no matter where you are. In the hospital, it’s even less so.
Hospitals need to treat these forms like everything is on a need-to-know basis. If the answer to a question isn’t critically important to the patient’s eligibility for the financial assistance program, don’t ask it. If it impacts eligibility and helps a hospital to receive reimbursement, go for it.
Lower-income families struggle to save money to buy a house or a car, and struggle even more with the thought of paying for open-heart surgery or the bills from having their child’s appendix removed. It’s not about giving away care for free; it’s about helping patients who can’t afford to pay their hospital bills.
Most patients who have the ability to pay, pay, and it is perfectly reasonable to expect them to do so. But many patients who qualify for financial assistance under their hospital’s policy need their hospital’s help. Whether it’s a partial discount or free care altogether, hospitals should make it as easy as possible for those who truly do qualify for the program to get needed support.
While it may seem counterintuitive for hospitals to proactively offer discounts, when managed well, discounted care is much better than sending bills that patients can’t afford to pay to collections, where little is ever recovered.
People want to be healthy and not be in debt—and hospitals want to treat patients, not chase after them for overdue bills. People shouldn’t delay or forgo care they need because they don’t think they can afford it. Necessary care should not lead to bankruptcy.
Credit bureaus canceling medical debt and the White House championing the cause is a win for patients. But hospitals have the opportunity to take a pro-financial assistance, patient-friendly approach and keep up the positive momentum. Fortunately, financial assistance programs are ready and available for hospital leaders looking to make it happen.
Photo: freedigitalphotos user Naypong