More than say they鈥檝e gone into debt because of medical or dental bills in the past five years. A quarter of them even have health insurance. And while the problem of medical debt is widespread, the burden of medical debt falls most heavily on Black Americans, worsening inequities.
The pandemic worsened inequities. More than half of those infected with COVID-19 are now struggling with medical debt, according to the health care-focused Commonwealth Fund. The fund found a borne by Black, Latino and low-income people, who were more likely to have jobs exposing them to COVID and are least likely to have affordable health care.
Berneta Haynes, who tracks issues related to medical debt as a staff attorney for the National Consumer Law Center, said this disproportionate burden is driven by and helps fuel the , leading to devastating financial consequences.
鈥淚t's that lack of extra money to deal with those medical debt and medical bills when they come that really sends people down this spiral,鈥� she said. 鈥淭hat small $500 bill can really destroy low-income families鈥� financial well-being.鈥�
Medical debt storms and wealth gaps
Understanding what creates these disparities requires an understanding of the nature of medical debt, in addition to persistent and pervasive racial health and wealth gaps that fundamentally shape people鈥檚 experiences.
鈥淢edical debt is a very unpredictable kind of debt. It shows up when we are least expecting it,鈥� said Haynes. 鈥淵our ability to weather a medical debt storm really, truly depends on how much extra money you have, whether it's in a savings account, whether it's equity in your home, if you happen to own a home, and your income.鈥�
Because of a of racist laws, policies and practices 鈥� including facially race-neutral policies and practices that still undercut Black wealth accumulation 鈥� a smaller share of Black Americans have been able to build and maintain the kind of financial cushion to cover the costs of unexpected medical care.
In 2019, the median non-Hispanic Black household had a , compared to the median non-Hispanic white household鈥檚 $188,200.
Because of these historical and institutional impediments, Black folks have been , she said, and they tend to earn lower incomes and are more likely to be uninsured compared to other racial groups.
鈥淪o the medical debt storm, when it hits us, hits us really hard,鈥� she said. 鈥淪ome folks just don't have the disposable income, the savings accounts or parents to fall back on who can provide them a few hundred dollars to cover a medical bill.鈥�
Racial health gaps
And when it comes to medical debt, that racial wealth gap is also tied up in a racial health gap, which stems from a denying black people adequate health care.
In southern states, that came in the form of Jim Crow laws; 鈥渟tates that formerly had a lack of hospitals for Black people to receive treatment,鈥� Haynes said.
Research also finds that implicit bias and a host of other factors continue to deliver for Black people and other people of color when they seek medical care.
Policy choices also continue to undermine Black people鈥檚 health in southern states, Haynes said. Texas is one of a dozen states where lawmakers have chosen not to expand Medicaid.
鈥淏lack people are predominantly located in the Southern states. That's where we see more medical debt affecting families. And it's also the same region that has failed to expand Medicaid.
In Texas, which boasts both the of any state in the nation and the as well, that expanded Medicaid program would ensure more than a million people, about three quarters of them people of color.
No easy fixes, but some improvements
Haynes explained that programs aimed at helping people pay for care they need but can鈥檛 afford often fall short. Often, she said, the eligibility requirements for charity care are so narrow that people who need help don鈥檛 qualify, and hospitals don鈥檛 always direct patients to programs that could help them.
鈥淭hese programs are really allowed to operate with little accountability,鈥� she said.
Research has shown that recent declines in medical debt are likely linked to federal pandemic relief money like stimulus checks and an expanded child tax credit that helped families pay off old bills and get out from underneath some of their debt.
Now that most pandemic financial aid programs have lapsed, Haynes thinks it鈥檚 possible that medical debts will start going back up.
But recent improvements in laws and policies may help slow the rise, she said.
Texas is one of a handful of states that have limited so-called 鈥渂alance billing,鈥� which will leave fewer patients with for procedures they thought were covered by their insurance plan. A to curb surprise balance billing went into effect in January.
And the three big credit bureaus 鈥� Experian, Equifax and TransUnion 鈥� say they are medical debt on credit reports after it鈥檚 been paid off, and will now give people a year to address delinquent medical debt before dinging their credit reports.
That announcement came as the Biden Administration鈥檚 Consumer Financial Protection Bureau has been practices around medical debt and collections.
Got a tip? Christopher Connelly is 四虎影院's One Crisis Away Reporter, exploring life on the financial edge. Email Christopher atcconnelly@kera.org.You can follow Christopher on Twitter .
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