The Price of Health: Paying Medical Bills with Plastic Can Really Sting
Hospital and doctor bills, copayments, deductibles, and other medical expenses have contributed to the balances of nearly a third of low- and middle-income households that have credit card debt. What's more, the balances of medically indebted households were on average 46 percent higher than those without medical debt$11,623 versus $7,964according to the survey of 1,150 adults by the Access Project, a consumer health advocacy organization affiliated with Brandeis University, and Demos, a public policy research organization.
Not surprisingly, uninsured people had higher levels of credit card debt, with an average balance of $14,512. But having health insurance was no guarantee of escaping a reliance on plastic: Insured people who had medical debt had an average balance of $10,973. The problem is often compounded by high interest rates and penalties for late payment. "First and foremost, when people are sick they want to be treated and they want to get well," says Mark Rukavina, executive director of the Access Project and coauthor of the report. "They sometimes feel obligated of pay off their bills even though they don't have the resources to do so, because they want to maintain a good relationship with their providers."
Medically indebted young people between the ages of 18 and 34 had the highest level of credit card debt of any age group, averaging $13,303. Young adults without medical debt averaged $7,450 in credit debt. Healthy young people are more likely than other age groups to shrug off the need for health insurance, leaving them financially vulnerable if they get sick. But that probably only partly explains their higher debt, says Rukavina. In addition, young people just starting out in their careers often don't have a financial cushion to absorb unexpected medical expenses.
Providers that offer discounts of as much as 50 percent to patients who pay up front when a service is provided may not be doing consumers a favor, says Rukavina. "It's mighty tempting to slap it on plastic," he says. "But if you already carry a balance, that can be problematic." Before you pull out your card to pay for medical services, consider trying to negotiate the payment terms with your provider. Some will offer long-term plans or a reduced fee, especially if you're uninsured. When it comes to medical bills, talk may literally be cheap.