(TNS) — An innovative plan to help Pennsylvanians with crippling medical debt is delayed but not dead, supporters say.
The plan calls for using state funds to buy unpaid medical bills from hospitals and health care providers, which are commonly sold at a steep discount.
A $10 to $15 million investment by the state, for example, could buy and eliminate more than $1 billion in medical debt, according to state Rep. Arvind Venkat, D-Allegheny, the sponsor of medical debt legislation that passed the House last summer but has since stalled.
Supporters say millions of Pennsylvanians face major medical debt. According to a recent survey involving 1,400 Pennsylvania adults, one in four said they have unpaid medical bills, one in three said they are struggling to pay medical bills, and 51% said they delayed or went without health care during the past year because of cost. Moreover, 15% of those surveyed said they had been contacted by a collection agency.
“The instances in which people are getting medical debt are accelerating,” says Patrick Keenan, the director of policy and partnerships for the Pennsylvania Health Access Network.
In addition to the financial hardship, people facing medical debt tend to avoid further medical care, causing their conditions to worsen, contributing to disability and unemployment, and resulting in higher costs in the end, supporters of the debt relief plan say.
Venkat, who also is a Pittsburgh-area emergency room physician, has said roughly $4 billion in bad debt is held by about two million Pennsylvanians. He believes it could be erased with a $40 million state investment. However, he has suggested launching the program with a first-year state investment of $10 to $15 million.
Venkat’s bill was overwhelmingly approved by the state House in late June, receiving support from every Democrat and 13 Republicans.
Because of broad agreement over the severity of the problem, the plan was included in the House-approved version of the fiscal code needed to finalize the state budget. However, it was stripped from the final version of the months-overdue budget, finally approved in December.
Still, Keenan remains optimistic. He believes the proposal failed to make the final cut because it was a complicated initiative caught up in a complex budget situation.
“I think we ran out of time … There’s a growing awareness that medical debt is a huge problem,” he said.
Because of strong support for the bill within both parties, Keenan is hopeful the state Senate will soon take up and pass the House-approved bill.
“We really saw a diverse group, and really important members of the Republican caucus, join with Democrats to pass that bill, and kind of signal that this is something that is really important,” he said.
The state would contract with a third-party firm that would scour the bad debt lists of healthcare providers, looking for unpaid bills from patients earning less than 400% of the federal poverty level or with debt equaling five percent or more of their family income.
The firm would buy the debt, preventing patients from being targeted by bill collectors and eliminating their debt. Pennsylvania would likely contract with RIP Medical Debt, a non-profit that carries out the approach in multiple states, sometimes using donations to buy up the debt.
But there’s more to it.
According to research by Keenan’s organization, most people who end up with medical debt weren’t informed of hospital financial assistance programs or offered help with applying. Moreover, only a small portion are steered toward programs such as Medicaid or Affordable Care Act coverage that could cover their medical care.
Venkat’s bill, HB 78, would create a uniform financial aid application, require hospitals to inform patients of the aid and screen them for eligibility for Medicaid or other affordable coverage.
“This isn’t just about forgiving medical debt. It’s also about making the system fairer and more responsive to patients so that fewer people end up with medical debt in the first place,” Keenan says.
Venkat has said his bill is modeled after a Pittsburgh program where the city spent $1 million and was able to eliminate $115 million in medical debt for 24,000 people.
He has called it “about as good a return on state dollars as I can imagine” and said it “carefully targets relief to those most in need in an equitable way and avoids the concern that debt relief may incentivize over-utilization of healthcare resources or purposefully not paying for healthcare services.”
