How medical health insurance might have made well being care dearer

Widespread medical debt is a uniquely American problem. About 40% of US adults have at least $250 in medical debt, according to a survey conducted by the Kaiser Family Foundation.

“The history of medical debt is essentially a history of the changing answer to the following question: if the patient cannot pay the bill, who pays it?” said dr Luke Messac, an emergency room physician at Brigham and Women’s Hospital in Boston who is writing a book on the history of medical debt.

As health care prices have increased over the past fifty years, patients have been asked to pay more out of pocket when receiving health care.

There are many complicated reasons for the increase in care costs, such as: B. the lack of prioritization of care or lack of price transparency, but one of the biggest catalysts for inflation has been the rise of health insurance.

“When you get this third-party pay system, the patient doesn’t have to pay all the costs directly, the insurer pays part of it,” he said. dr Peter Kongstvedt, a senior member of the faculty of health policy at George Mason University. “That gives you unrelenting upward pressure on prices, because if you’re getting paid, why not pay a little more?”

In the early 2000s, federal legislation led to a major overhaul of how insurance plans share costs, with the Medicare Modernization Act of 2003 sparking a boom in high-deductible health insurance plans.

A deductible is the amount that a policyholder must pay up front before their health insurance plan takes effect. The average deductible for one person in 2022 is about $1,760, which is double what it was in 2006, adjusted for inflation.

About 70% of low-income adults said they couldn’t afford an unexpected $500 medical bill. Almost a quarter of households with an income of at least $90,000 also said they could not afford it right away.

“It doesn’t really take a Nobel Prize in Economics to realize that when most people can’t afford a $500 bill and the average deductible on a health insurance plan someone receives at work is now over $1,500 That’s going to create a problem,” said Noam Levey, senior correspondent for Kaiser Health News. “You can’t go into an emergency room or a hospital in this country and typically come out for less than a few thousand dollars.”

Watch them Video above to learn more about how medical debt became so prevalent in the US healthcare system and what we can do to change it.