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Medical Debt Is Disappearing From Americans’ Credit Reports, Lifting Scores

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Noam N. Levey
Thu, 02 Nov 2023 14:11:00 +0000

The share of American consumers with medical debt on their credit reports has declined dramatically over the past year as major credit rating agencies small unpaid bills and debts that were less than a year old, according to a new analysis from the nonprofit Urban Institute.

At the same time, millions of Americans have seen their credit scores improve, making it easier for many to get a job, rent an apartment, or get a car.

“This is a very significant change,” said Breno Braga, an economist at the Urban Institute and a co-author of the study. “It affects a lot of people.”

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The analysis found that, as of August, just 5% of adults with a credit had a medical debt on their report, down from almost 14% two years earlier.

Urban Institute researchers also found that Americans with a medical debt on their credit report in August 2022 saw their VantageScore credit score improve over the next year from an average of 585 to an average of 615.

That moved many consumers out of the subprime category. Subprime borrowers typically pay higher interest rates on loans and credit cards, if they can borrow at all.

Consumers' improved scores don't mean the medical debts have been eliminated. Hospitals, collectors, and other medical providers still pursue for unpaid bills. And many continue to sue patients, place liens on their homes, or sell their debts.

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But the credit reporting changes appear to be mitigating one of the more pernicious effects of medical debt that for years has undermined the financial security of tens of millions of patients and their families.

Credit scores depressed by medical debt, for example, can threaten people's access to housing and fuel homelessness.


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In total, about 27 million people experienced a significant improvement in their score, the Urban Institute researchers estimated. VantageScore, which uses a slightly different methodology than FICO, in January stopped using any medical debt to calculate scores.

The credit reporting changes have drawn criticism from debt collectors and some medical providers, who warn that hospitals and physicians may require upfront payments from patients before delivering care or may push more patients into credit cards and other kinds of loans.

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In August, a California dermatologist sued the three major consumer credit rating agencies, claiming that with fewer medical debts appearing on credit reports, patients would have less of an incentive to pay their bills, costing physicians nationwide potentially billions of dollars. The case is pending in federal court.

But most leading consumer and patient advocates applaud the more restrictive credit reporting rules. Other research, by the federal Consumer Financial Protection Bureau, has found that medical debt — unlike other kinds of debt — does not accurately predict a consumer's creditworthiness, calling into question how useful it is on a credit report.

In September, the Biden administration announced plans to push broader changes that would eliminate all medical debts from consumers' credit scores. Federal regulations to implement such a ban will be developed next year by the CFPB, federal said.

This would expand current state efforts. In June, Colorado enacted a trailblazing bill that prohibits medical debt from being included on residents' credit reports or factored into their credit scores. A similar measure was passed by the New York state this year and is pending before the governor.

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The Urban Institute researchers predicted that these policies would continue to improve consumer credit scores, though they warned that more systemic changes will be necessary to reduce medical debt, which burdens about 100 million people in the U.S.

“Reducing the burden of medical debt and its wide-ranging consequences would likely require insurance reforms that build on the Affordable Care Act to further protect consumers from out-of-pocket medical expenses they can't afford,” the report concludes.

The report by the Urban Institute, which has worked with KFF Health over the past two years to analyze medical debt data, is based on a sample of credit records from one of the three large credit rating agencies.

About This Project

“Diagnosis: Debt” is a reporting partnership between KFF Health News and NPR exploring the scale, impact, and causes of medical debt in America.

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The draws on original polling by KFF, court records, federal data on hospital finances, contracts obtained through public records requests, data on international health systems, and a yearlong investigation into the financial assistance and collection policies of more than 500 hospitals across the country. 

Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status for KFF Health News to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.

The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers' balances may be affected by major medical expenses. And the CED Project, a Denver nonprofit, worked with KFF Health News on a survey of its clients to explore links between medical debt and housing instability. 

KFF Health News journalists worked with KFF public opinion researchers to design and analyze the “KFF Health Care Debt Survey.” The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, 1,292 adults with current debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.

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Reporters from KFF Health News and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.

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By: Noam N. Levey
Title: Medical Debt Is Disappearing From Americans' Credit Reports, Lifting Scores
Sourced From: kffhealthnews.org/news/article/removing-medical-debt-credit-reports-urban-institute-study/
Published Date: Thu, 02 Nov 2023 14:11:00 +0000

Did you miss our previous article…
https://www.biloxinewsevents.com/worse-than-people-can-imagine-medicaid-unwinding-breeds-chaos-in-states/

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Kaiser Health News

Watch: John Oliver Dishes on KFF Health News’ Opioid Settlements Series

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Fri, 17 May 2024 09:00:00 +0000

Opioid manufacturers, distributors, and retailers are paying tens of billions of dollars in restitution to settle lawsuits related to their role in the nation's overdose epidemic. A recent of “Last Tonight With John Oliver” examined how that money is being spent by and local governments across the United States.

The segment from the KFF Health “Payback: Tracking the Opioid Settlement Cash.” You can learn more about the issue and read our collection of articles by Aneri Pattani here.

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Title: Watch: John Oliver Dishes on KFF News' Opioid Settlements Series
Sourced From: kffhealthnews.org/news/article/watch-john-oliver-kff-health-news-payback-opioid-settlements-series/
Published Date: Fri, 17 May 2024 09:00:00 +0000

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Kaiser Health News

KFF Health News’ ‘What the Health?’: Bird Flu Lands as the Next Public Health Challenge

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Thu, 16 May 2024 18:30:00 +0000

The Host

Julie Rovner
KFF Health


@jrovner


Read Julie's stories.

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Julie Rovner is chief Washington correspondent and host of KFF Health News' weekly health policy news podcast, “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “ Politics and Policy A to Z,” now in its third edition.

Public health officials are watching with concern since a strain of bird flu spread to dairy cows in at least nine states, and to at least one dairy worker. But in the wake of , many farmers are loath to let in health authorities for testing.

Meanwhile, another large health company — the Catholic hospital chain Ascension — has been targeted by a cyberattack, leading to serious problems at some facilities.

This week's panelists are Julie Rovner of KFF Health News, Rachel Cohrs Zhang of Stat, Alice Miranda Ollstein of Politico, and Sandhya Raman of CQ Roll Call.

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Panelists

Rachel Cohrs Zhang
Stat News


@rachelcohrs


Read Rachel's stories.

Alice Miranda Ollstein
Politico

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@AliceOllstein


Read Alice's stories.

Sandhya Raman
CQ Roll Call


@SandhyaWrites

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Read Sandhya's stories.

Among the takeaways from this week's episode:

  • Stumbles in the early response to bird flu bear an uncomfortable resemblance to the early days of covid, the troubles protecting workers who could be exposed to the disease. Notably, the Department of Agriculture benefited from millions in covid relief funds designed to strengthen disease surveillance.
  • is working to extend coverage of telehealth care; the question is, how to pay for it? Lawmakers appear to have settled on a two-year agreement, though more on the extension — including how much it will cost — remains unknown.
  • Speaking of telehealth, a new shows about 20% of medication abortions are supervised via telehealth care. State-level restrictions are forcing those in need of abortion care to turn to options farther from home.
  • And new reporting on Medicaid illuminates the number of people falling through the cracks of the government health system for low-income and disabled Americans — including how insurance companies benefit from individuals' confusion over whether they have coverage at all.

Also this week, Rovner interviews Atul Grover of the Association of American Medical Colleges about its recent analysis showing that graduating medical students are avoiding in states with abortion bans and major restrictions.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week that they think you should read, too: 

Julie Rovner: NPR's “Why Writing by Hand Beats Typing for Thinking and Learning,” by Jonathan Lambert.  

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Alice Miranda Ollstein: Time's “‘I Don't Have Faith in Doctors Anymore.' Women Say They Were Pressured Into Long-Term Birth Control,” by Alana Semuels.  

Rachel Cohrs Zhang: Stat's “After Decades Fighting Big Tobacco, Cliff Douglas Now Leads a Foundation Funded by His Former Adversaries,” by Nicholas Florko.  

Sandhya Raman: The Baltimore Banner's “People With Severe Mental Illness Are Stuck in Jail. Montgomery County Is the Epicenter of the Problem,” by Ben Conarck.  

Also mentioned on this week's podcast:

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Credits

Francis Ying
Audio producer

Emmarie Huetteman
Editor

To hear all our click here.

And subscribe to KFF Health News' “What the Health?” on SpotifyApple PodcastsPocket Casts, or wherever you listen to podcasts.

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Title: KFF Health News' ‘What the Health?': Bird Flu Lands as the Next Public Health
Sourced From: kffhealthnews.org/news/podcast/what-the-health-347-bird-flu-next-public-health-challenge-may-16-2024/
Published Date: Thu, 16 May 2024 18:30:00 +0000

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Kaiser Health News

California’s $12 Billion Medicaid Makeover Banks on Nonprofits’ Buy-In

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Angela Hart
Thu, 16 May 2024 09:00:00 +0000

TURLOCK, Calif. — For much of his young life, Jorge Sanchez regularly gasped for air, at times coughing so violently that he'd almost throw up. His mother whisked him to the emergency room late at night and slept with him to make sure he didn't stop breathing.

“He's had these problems since he was born, and I couldn't figure out what was triggering his asthma,” Fabiola Sandoval said of her son, Jorge, now 4. “It's so hard when your child is hurting. I was willing to try anything.”

In January, community workers visited Sandoval's home in Turlock, a in California's Central Valley where dust from fruit and nut orchards billows through the air. They scoured Sandoval's home for hazards and explained that harsh cleaning products, air fresheners, and airborne dust and pesticides can trigger an asthma attack.

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The team also provided Sandoval with air purifiers, a special vacuum cleaner that can suck dust out of the air, hypoallergenic mattress covers, and a humidity sensor — goods that retail for hundreds of dollars. Within a few months, Jorge was breathing easier and was able to run and play outside.

The in-home consultation and supplies were paid for by Medi-Cal, California's Medicaid health insurance program for low-income residents. Gov. Gavin Newsom is spearheading an ambitious $12 billion experiment to transform Medi-Cal into both a health insurer and a social services provider, one that relies not only on doctors and nurses, but also community health workers and nonprofit groups that offer dozens of services, including delivering healthy meals and helping homeless people pay for housing.

These groups are redefining health care in California as they compete with businesses for a share of the money, and become a new arm of the sprawling Medi-Cal bureaucracy that serves nearly 15 million low-income residents on an annual budget of $158 billion.

But worker shortages, negotiations with health insurance companies, and learning to navigate complex billing and technology systems have hamstrung the community groups' ability to deliver the new services: Now into the third year of the ambitious five-year experiment, only a small fraction of eligible have received benefits.

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“This is still so new, and everyone is just overwhelmed at this point, so it's slow-going,” said Kevin Hamilton, a senior director at the Central California Asthma Collaborative.

The collaborative has served about 3,650 patients, including Sandoval, in eight counties since early 2022, he said. It has years of experience with Medi-Cal patients in the Central Valley and has received about $1.5 million of the new initiative's money.

By contrast, CalOptima Health, Orange County's primary Medi-Cal insurer, is new to offering asthma benefits and has signed up 58 patients so far.

“Asthma services are so difficult to get going” because the nonprofit for these services is virtually nonexistent, said Bruno-Nelson, CalOptima's executive director for Medi-Cal. “We need more community-based on board because they're the ones who can serve a population that nobody wants to deal with.”

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Newsom, a Democrat in his second term, says his signature health care initiative, known as CalAIM, seeks to reduce the cost of caring for the state's sickest and most vulnerable patients, including homeless Californians, foster children, former inmates, and people battling addiction disorders.

In addition to in-home asthma remediation, CalAIM offers 13 broad categories of social services, plus a benefit connecting eligible patients with one-on-one care managers to help them obtain anything they need to get healthier, from grocery shopping to finding a job.

The 25 managed-care insurance companies participating in Medi-Cal can choose which services they offer, and contract with community groups to provide them. Insurers have hammered out about 4,300 large and small contracts with nonprofits and businesses.

So far, about 103,000 Medi-Cal patients have received CalAIM services and roughly 160,000 have been assigned personal care managers, according to state data, a sliver of the hundreds of thousands of patients who likely qualify.

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“We're all new to health care, and a lot of this is such a foreign concept,” said Helena Lopez, executive director of A Greater Hope, a nonprofit organization providing social services in Riverside and San Bernardino counties, such as handing out baseball cleats to children to help them be active.

Tiffany Sickler runs Koinonia Family Services, which offers California foster children mental health and other types of care, and even helped a patient pay off parking tickets. But the program is struggling on a shoestring budget.

“If you want to do this, you have to learn all these new systems. It's been a huge learning curve, and very time-consuming and frustrating, especially without adequate funding,” she said.

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Brandon Richards, a Newsom spokesperson, defended CalAIM, saying that it was “on the cutting edge of health care” and that the state was working to increase “awareness of these new services and .”

For nonprofits and businesses, CalAIM is a money-making opportunity — one that top state health hope to make permanent. Health insurers, which receive hefty payments from the state to serve more people and offer new services, share a portion with service providers.

In some places, community groups are competing with national corporations for the new funding, such as Mom's Meals, an Iowa-based company that delivers prepared meals across the United States.

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Mom's Meals has an advantage over neighborhood nonprofit groups because it has long served seniors on Medicare and was able to immediately start offering the CalAIM benefit of home-delivered meals for patients with chronic diseases. But even Mom's Meals isn't reaching everyone who qualifies, because doctors and patients don't always know it's an option, said Catherine Macpherson, the company's chief nutrition officer.

“Utilization is not as high as it should be yet,” she said. “But we were well positioned, because we already had departments to do billing and contracting with health care.”

Middleman companies also have their eye on the billions of CalAIM dollars and are popping up to assist small organizations to go up against established ones like Mom's Meals. For instance, the New York-based Nonprofit Finance Fund is advising homeless service providers how to get more contracts and expand benefits.

Full Circle Health Network, with 70 member organizations, is helping smaller nonprofit groups develop and deliver services primarily for families and foster children. Full Circle has signed a deal with Kaiser Permanente, allowing the health care giant to access its network of community groups.

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“We're allowing organizations to launch these benefits much faster than they've been able to do and to reach more vulnerable people,” said Camille Schraeder, chief executive of Full Circle. “Many of these are grassroots organizations that have the trust and expertise on the ground, but they're new to health care.”

One of the biggest challenges community groups face is hiring workers, who are key to finding eligible patients and persuading them to participate.

Kathryn Phillips, a workforce expert at the California Health Care Foundation, said there isn't enough seed money for community groups to hire workers and pay for new technology platforms. “They bring the trust that is needed, the cultural competency, the diversity of languages,” she said. “But there needs to be more funding and reimbursement to build this workforce.”

Health insurers say they are trying to increase the workforce. For instance, L.A. Care Health Plan, the largest Medi-Cal insurer in California, has given $66 million to community organizations for hiring and other CalAIM needs, said Sameer Amin, the group's chief medical officer.

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“They don't have the staffing to do all this stuff, so we're helping with that all while teaching them how to build up their health care infrastructure,” he said. “Everyone wants a win, but this isn't going to be successful overnight.”

In the Central Valley, Jorge Sanchez is one of the lucky early beneficiaries of CalAIM.

His mother credits the trust she established with community health workers, who spent many hours over multiple visits to teach her how to control her son's asthma.

“I used to love cleaning with bleach” but learned it can trigger breathing problems, Sandoval said.

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Since she implemented the health workers' recommendations, Sandoval has been able to let Jorge sleep alone at night for the first time in four years.

“Having this program and all the things available is amazing,” said Sandoval, as she pointed to the dirty dust cup in her new vacuum cleaner. “Now my son doesn't have as many asthma attacks and he can run around and be a normal kid.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

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By: Angela Hart
Title: California's $12 Billion Medicaid Makeover on Nonprofits' Buy-In
Sourced From: kffhealthnews.org//article/newsom-medicaid-12-billion-dollar-makeover-nonprofits-bureacracy-calaim/
Published Date: Thu, 16 May 2024 09:00:00 +0000

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