Medical debt declined during the pandemic, but that’s partly because many Americans delayed health care due to COVID-19

Although the COVID-19 pandemic has sent more than 4.6 million people to the hospital, the proportion of Americans with medical debt declined last year, a new report shows. However, researchers said the reason for the decline was related to the pandemic, and as such, the trend could be reversed soon.

The proportion of adults with medical debt, problems paying medical bills and medical debt in collections fell in 2021 compared to 2018, according to a report released this week by the Urban Institute, a mindless think tank. of left-wing profit conducting research on economics and economics. social policies.

The percentage of underage adults who reported medical debt fell to 16.8% in April 2021, from 23.6% two years earlier. During the same period, the share reported having problems paying family medical bills also dropped to 12.2% from 17% in the previous 12 months, according to the study.

“In the spring of 2021, the use of health care had not recovered to pre-pandemic levels, and some adults were still delaying or giving up care for themselves or their children due to problems coronavirus exposure “.

– Urban Institute

Medical debt arises when patients are unable to pay their health care bills and can eventually damage a person’s entire financial well-being. It is the most common type of debt that ends up in collections, and about 20% of households have it. Americans had a total of $ 88 billion in medical debt on their credit reports as of June 2021, the Office of Consumer Financial Protection (CFPB) reported.

Overdue medical debt affects communities unequally, with higher percentages of black and Hispanic people reporting it and, as a result, being penalized with lower credit scores. Equifax EFX Credit Reporting Agencies
+ 0.68%,
TRU Transunion,
+ 1.22%
and Experian EXPGF,
they recently announced that they would stop counting medical debts on credit reports.

The Urban Institute study analyzed consumer data from a major credit reporting agency and data from the Health Reform Monitoring Survey (HRMS) for adults aged 18 to 64, both of whom represent national demographics.

Although debt decreased for all groups compared to the previous two years, the report found that inequality in medical debt remained a problem. Black adults reported the highest medical debt among all groups in April 2021 at 22.5%, followed by Hispanic adults at 19.9%. Black and Hispanic adults were also more likely to have trouble paying their bills than their white counterparts the year before.

One of the reasons for the decrease in medical debt

The authors of the article, Michael Karpman, Kassandra Martinchek, and Breno Braga, suggested that the drop in medical debt was due in part to fewer people seeking health care due to fear of coronavirus exposure. , as well as with the help of temporary government funding. relief and increased Medicaid enrollment.

“In the spring of 2021, the use of health care had not recovered to pre-pandemic levels, and some adults were still delaying or giving up care for themselves or their children due to health concerns. “coronavirus exposure,” they wrote.

“The projected increases in the non-insurance rate did not materialize, as the growth in Medicaid and Marketplace enrollment offset the loss of employer-sponsored coverage, protecting many people from expensive medical bills,” they added. the authors.

The benefits of the pandemic may also have helped. “Many generous government relief measures, including incentive payments, extended unemployment and nutrition benefits, and moratoriums on evictions and student loan payments, have helped families pay their bills on time. “, adds the report.

Since the public health emergency was declared in early 2020, enrollment in health insurance programs for children and Medicaid has grown by more than 14 million people, making a total of 85 million people eligible. help with medical bills in late September 2021.

However, researchers warned that these factors could change soon, increasing the risk that more households will incur more medical debt. If the pandemic continues to fade from public awareness, people could re-use health care as usual, and temporary arrangements to increase Medicaid enrollment could expire.

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