Americans share their medical debt horror stories

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Medical debt is still a uniquely American problem.

An estimated 17.8% of Americans had medical debt in collections as of June 2020, according to a study from the Journal of the American Medical Association (JAMA), which analyzed consumer credit reports between January 2009 and June 2020.

The mean amount of debt was $429, with states in the South seeing the highest amount and states in the Northeast seeing the lowest. Medicaid expansion also played a major role: States that didn’t adopt the expansion saw higher amounts of debt in collections.

Yahoo Finance spoke with several Americans who shared how medical debt has impacted their lives.

‘I was hyperventilating every time I tried to pay the bills’

Diane F. from Maine saw her biggest financial troubles come from her and her family’s prescription medications, which were paid for by credit card.

She estimated that their debt reached as high as $15,000, telling Yahoo Finance that “all the credit card charges for our prescriptions” were the primary source of stress (as opposed to medical bills themselves.)

Diane takes three different prescriptions while her husband takes two. The highest price they paid for one was over $1,200.

“I have always strived very hard to keep my credit rating at the very best level I can,” she said. “Four or five years back, I was hyperventilating every time I tried to pay the bills. You see, medications were costing my husband and I anywhere up to $1,300 for some of our prescriptions.”

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An elderly woman reaches for a pill bottle on a table with a glass of orange juice.
An elderly woman begins her day taking her daily prescription medicine on December 24, 2017 in Phoenix, Arizona. (Photo by Andrew Lichtenstein/ Corbis via Getty Images)

Through her job, Diane enrolled in an insurance plan “with a very high deductible.” Two of her medications are venlafaxine, which is free, and bupropion, which costs $64.80 for a 3-month supply. Her third medication, Latuda, cost her $398 for the first month and now costs $198 per month.

Latuda has a discount program, but, she explained, once you go on a government-sponsored program, such as Medicare, that discount program is no longer in effect. When Diane turned 65, she could no longer afford her medicine because her discount “went out the door.”

“Thus, for a year, a doctor played Russian Roulette with my medicine trying to find something that would work,” she said. “We never did.”

“In other words, for us ‘seniors,’ our mental health is not important,” she added. “Many of the medicines that would help depression become expensive once you go on Medicare. They have discount cards as long as you are not on any kind of government insurance.”

KISSIMMEE, FLORIDA - June 27: Living in an extended stay budget hotel because they cannot afford or find affordable housing, Aja Mallow, center, stressfully and strategically pays bills with the little money they have, with boyfriend, Robert Booher, left, and son, Brian Mallow, 9, at the Duo Boutique Hotel along US Route 192 in Kissimmee, Florida Thursday June 27, 2019. (Photo by Melina Mara/The Washington Post via Getty Images)
Aja Mallow and her boyfriend stressfully and strategically pay bills with the little money they have in Kissimmee, Fla. June 27, 2019. (Photo by Melina Mara/The Washington Post via Getty)

Despite these difficulties, Diane was still able to keep her credit score over 800 by paying bills first and then using the rest of her money towards essentials like groceries and gas.

She eked by just enough to make the minimum payments for both the medications and the mortgage.

But “the minimum credit card charges were overwhelming us,” she said.

“I was almost having a breakdown each week when I tried to pay the bills,” Diane said. “We were maybe 5-6 years from paying off our mortgage, but with the credit card bills, auto loans, and general expenses, it was becoming nearly impossible. We ended up refinancing our mortgage to combine our credit card debt that was significantly over $10,000. It eased some of the burden.”

This year, Diane changed her insurance to a Humana Advantage plan and, while she described the cost as “outrageous,” she was able to go back on Latuda. Her first month cost her $400 before the price decreased.

“It is awful, but my husband and I deemed it necessary for my mental health,” she said.

Prescription bottles prescribed by Dr. Jack Kevorkian are seen during a press preview for the Sale of the Estate of Jack Kevorkian at the New York Institute of Technology in New York October 27, 2011. The items from the estate will be held for auction on October 28. REUTERS/Shannon Stapleton (UNITED STATES - Tags: SOCIETY HEALTH)
Prescription bottles. (REUTERS/Shannon Stapleton)

‘I am not alone’

Doug, a man based out of New Jersey, needed a biopsy, which later confirmed he had cancer. He was treated at an in-network hospital by an in-network anesthesiologist.

His procedure happened on November 15, 2019, and collections began in July 2020. Yet, the anesthesiologist still balance-billed him for roughly $2,500.

One of the many ways that Americans are financially vulnerable to the U.S. health care system is through “surprise billing,” a type of balance billing where a patient receives in-network care that is provided by an out-of-network health care provider without the patient knowing. (Balance billing occurs any time a patient’s insurance doesn’t cover the full cost of care.)

“My insurance company wrote me a letter after they failed to resolve the matter saying that I was being illegally balance-billed, but they were washing their hands of the matter,” Doug said. “I have since been contacted by collection agencies and lawyers attempting to collect on this ‘debt.’ I do not know if my credit will ultimately be affected by this.”

As of April 2021, according to Credit Karma data provided to Yahoo Finance, roughly 21 million Americans held $46 billion of medical debt that faced collections — meaning that a third-party debt collector is trying to obtain the money owed.

“Having been diagnosed with cancer, I had a lot of medical bills, and I had reached my ‘maximum out-of-pocket’ for my insurance,” Doug said. “It was a rude awakening to learn this means nothing when it comes to a provider that balance-bills you.”

The bill is for $1,406.22 and while Doug can afford to pay it, “after talking about it with my wife, we decided it was worth a potential hit on our credit not to cave in to these guys.”

Doug took numerous measures to try to resolve the matter, including: working with his insurance company; responding to collections letters requesting verification of debt; filing complaints with the NJ Board of Medical Examiners, the Morristown Medical Center, the Joint Commission, and the Better Business Bureau; and contacting members of the media.

Part of the collections letter that Doug received.Part of the collections letter that Doug received.
Part of the collections letter that Doug received.

“New Jersey’s ‘comprehensive’ protection did not protect me,” Doug said. “I contacted everyone I could think of to complain about this, but my complaints fell on deaf ears.”

And, he added, the Google Reviews for his anesthesiologist are “telling.”

“I am not alone,” he said, “just without recourse.”

A routine test gone awry

In February 2021, Patty E. visited her doctor for a routine colonoscopy. Prior to the appointment, she confirmed that the office accepted her insurance.

But a few weeks after her procedure, she received a bill for over $800 from the doctor and a bill for over $6,700 from the place it was performed.

Surgical Tech Melissa Ellis prepares an OR room in the University of Mississippi Medical Center in Jackson, Mississippi October 4, 2013. Mississippi is one of at least 20 states that has decided not to expand Medicaid under the Affordable Care Act, better known as
Surgical Tech Melissa Ellis prepares an OR room in the University of Mississippi Medical Center in Jackson, Mississippi. REUTERS/Jonathan Bachman

“Turns out, the doctor was not in network, and my plan does not cover anything if I go out of network,” Patty said. “When I called the doctor’s office, they told me they didn’t realize they didn’t take my insurance until they got my bill back from the insurance company. They admitted it was an error on their part.”

Despite the error, the hospital is still billing her the full amount, though Patty stressed that she “would have never knowingly agreed to be charged almost $8,000” for a procedure that’s typically covered at 100%.

“Why didn’t someone tell me they didn’t take my insurance?” Patty said. “There has to be a better way to identify valid insurance other than after the fact when the patient is stuck holding the bill.”

Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at [email protected]