The weight of medical debt

Andy Gee of San Francisco racked up $72,000 in medical bills following a motorcycle accident with an uninsured driver.

Andy Gee of San Francisco says he works for hours everyday to reduce his medical debt and stop the collection agencies from calling.

Tess Vigeland: Last year, about one in four adults under 65 had medical debt, an all-time high for the country. That's because health care costs continue to rise while people are losing their jobs and health coverage.

Andy Gee: Millions of people, they may not know this, but they are just one accident or one illness away from disaster.

Medical debt dramatically changed this man's life last year. Kelley Weiss has his story.

Kelley Weiss: A few years ago, things were going well for Andy Gee. He was a self-employed computer programmer in San Francisco. Gee was an active guy, he was always riding his bike or taking dance lessons. Then this...

Andy Gee: I was coming north this way and he was coming west and he hit me right there.

He points to an intersection just a few blocks from his apartment. Last October, he was riding home on his motorcycle and an uninsured driver ran a stop sign and plowed right into him. Gee says, just like that, his life changed. As he lay on the ground, he knew the bone sticking out of his leg was really bad. But through the pain, he thought, "At least I have health insurance."

Gee: I wasn't even worried when I first got the bill from the hospital, 'cause I thought, Eh, insurance is going to take care of this.

He was rushed to San Francisco General Hospital and had emergency surgery. He had to stay at the hospital for six days. And he says it all added up.

Gee: I had no idea that I would end up owing this amount of money.

His provider, Blue Cross, said the charges were above the customary rate and it wouldn't pay all of them. The hospital and physicians' group wouldn't budge. This left Gee responsible for the difference, $72,000. He was unemployed and getting over his surgery -- and the medical bills just kept coming.

Gee: The first phase, as I'm sure you know, is denial.

He says for months he just pretended nothing was happening. Now he spends hours every day trying to get help on the bills and to stop the collection notices.

Gee: I've been feeling just so much anger from this whole thing of, you know, why did I get hit? And then, why are you sending me to collections? Why don't we try to work something out?

Gee worries his debts will wipe out the savings that he's been living on and ruin his credit score. He doesn't sleep well. And, as he's tossing and turning late at night, he might flip on the TV and find this:

TV commercial: Just imagine if you could find a way to wipe out your medical debt in 12 to 36 months.That's right! Just 12 to 36 months...

Imagine is right. These types of programs typically charge hefty fees to negotiate discount payments with creditors. Rob Quinlan is a debt counselor with the non-profit ClearPoint Financial Solutions. He says there's no guarantee these programs will work and you could just lose your money. Still Quinlan acknowledges they're tempting for many people. Right now, a quarter of his clients are struggling with medical debt and it's increasing.

Rob Quinlan: Because of the recession and unemployment, certainly, there are those that are having more medical debt and then using what they feel are the options to cover those debts.

Some of those options: Payday loans and credit cards. He says taking on new debt to pay off old debt is a bad move.

Quinlan: Once you have medical debt that is ongoing, it can be a domino effect.

People do turn to credit cards when they're in this situation. That's according to Mark Rukavina. He's with the health advocacy group, The Access Project.

Mark Rukavina: What we've seen over the past few years is that people put these medical expenses on their credit cards and often times the problem magnified because of penalties, late fees and interest charged on those bills.

And, Rukavina says medical debt can hit anyone. In fact, about two-thirds of people with it have health insurance. Patients with insurance have to pay more in co-pays these days. And Rukavina says many buy plans that offer little coverage because that's all they can afford.

Rukavina: Unfortunately, more and more Americans understand this isn't a problem that's isolated to those without insurance.

This is something people with medical debt understand too well.

In Sacramento, I'm Kelley Weiss for Marketplace Money.

Brancaccio: This story was produced in collaboration with The California HealthCare Foundation Center for Health Reporting. Since the story first aired on KQED Public Radio, the hospital has relented and given Andy Gee a 75-percent discount on his bill. Now he's working on getting a further discount on the remaining balance of $15,000.

Andy Gee of San Francisco says he works for hours everyday to reduce his medical debt and stop the collection agencies from calling.

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I'm also self-employed with BC/BS. It's a horrible policy, but it was the best I could find. The only reason I bother with health insurance is to shield my family from financial ruin (somewhat) should anything happen to me.

Ours is a terrible system. I've lived and worked in Canada, and the health care was pretty darned good there, even though I was in a rural area which wasn't particularly wealthy. I think we should dispense with insurance companies immediately, and place all physicians on fixed salaries as well.

So, more people know about it. Way too many through experience. So what? The "important" people, the ones who "matter" (to the state & federal gov'ts) have good health insurance. Either through their corporate employers or through the taxpayer (i.e., Congress, the Prez, his family, and probably most of the people working in the White House & Cabinets are insured by the gov't or the taxpayer). You notice that no progress towards universal single payer (i.e., no for profit or allegedly "non-profit" private health insurers) health care in the US has been made. The US is "too special" and too busy spending money on drones, military contractors and endless invasions and occupations to try out of of the many models of providing health care that the world provides. Even though those models have demonstrated their ability to deliver better health care for the majority while costing less per capita. I believe that the failure of private insurers to do what they were supposed to do--and are exempt from what the US has in the way of anti-trust regulation in order to do so--is one of the issues the OWS has raised. Among others. Who knows, perhaps things in the US may get so bad that even members of Congress will have to pay attention to what the OWS participants are saying, and perhaps the people standing w/pitchforks and torches at the entries to their gated communities. No doubt by then they'll all have private security to protect them from the "rabble."

This is the dirty little secret about health care insurance—and other forms of insurance, for that matter (homeowner, for instance)—that we don’t hear enough about. Even people who have insurance are not adequately reimbursed when they need it. This is unique to the U.S., and yet another reason why protesters are in the streets by the thousands. Until we get Wall Street out of health care, education, energy, utilities, banking (reinstate Glass-Steagall), and anything else that constitutes social infrastructure and basic human need, these abuses will continue.

What exactly is medical insurance for besides generating profits for insurance companies?

It is a travesty and an inhumane way to treat people, to let them go into insurmountable medical debt. No other developed country lets this happen to people Medical care is considered a right everywhere else, but not here. This needs to change now. See www.pnhp.org.

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