New research, “Medical Debt in Their Own Words: Qualitative Interview Results,” surfaces the lived experiences of low- and moderate-income workers as they struggle to (afford to) stay healthy, offering seven recommendations for employers, straight from employees.

An employee offers insights to employers about medical debt and enhanced transparency related to health insurance benefits

Medical debt continues to rise on the national agenda as everyone from employers to cities recognize a growing crisis.

One in three adults—nearly 100 million Americans—struggle with unpaid medical bills according to the “Readout of the White House State Convening on Medical Debt” last month: “Medical debt keeps everyday Americans from securing loans, seeking medical services, and affording the essentials they need to get by.

Meanwhile, New York City, where we’re based, announced plans this month to wipe out $2 billion in medical debt for 500,000 residents, working with RIP Medical Debt, a nonprofit that buys medical debt in bulk from hospitals and debt collectors for pennies on the dollar. This approach is a proven solution that helps its beneficiaries escape the negative health and wealth effects of medical debt.

We at Neighborhood Trust Financial Partners (of which TrustPlus is a service) have been working with RIP Medical Debt on a separate, multiphase, effort to raise awareness of medical debt as a growing problem for employees, employers, healthcare stakeholders, and our economy, and to identify solutions.

Our latest brief, “Medical Debt in Their Own Words: Qualitative Interview Results,” surfaces the lived experiences of low- and moderate-income workers as they struggle to (afford to) stay healthy.

It reinforces findings from previous phases, including:

  • Insurance alone is not enough for workers to avoid medical debt.
  • Medical debt impacts workers’ mental, financial, and physical health, largely due to deferred care.
  • Employers are uniquely situated to help (and to benefit from addressing medical debt among workers).

It gives life to the ideas that adequate coverage is unaffordable and workers’ confusion around health insurance is rampant. And it offers seven key findings for employers, employees, and the health system, plus seven recommendations for employers straight from employees themselves.

From the key findings:

Impact of Medical Debt: 

  1. Healthcare is unaffordable and overwhelming the moment workers have even a small unexpected medical issue.
  2. Medical debt leads to stress, deferred care, difficult spending trade-offs, and the postponement of financial and other life goals.

Employer-Related Challenges:

  1. Workers report that they receive insufficient explanation of their health and financial wellness benefits for employees. They’re frustrated by their limited visibility into their employers’ decision-making process around plan choice and contribution amounts.
  2. Workers struggle with insurance instability caused by changing employers, getting laid off, or employers changing their insurance provider every year.

Health System-Related Challenges:

  1. The cost of healthcare is extremely unpredictable and is exacerbated by poor communication around medical billing practices, such as sending bills months apart following treatment.
  2. Patients struggle to find trusted, in-network providers with timely appointment availability. Several of the interviewees we spoke to who identify as Black women shared similar experiences about not being listened to by their providers in the past, which resulted in symptoms and diagnoses being ignored.
  3. Financial assistance at nonprofit hospitals has a high barrier to access due to obfuscation and a burdensome application process, making people feel that the system is designed to confuse them and to squeeze money out of patients.

Medical debt recommendations for employers, straight from employees:

  1. Equip employees with resources for estimating their annual healthcare expenses (e.g.this calculator from Optum):

“A big challenge is navigating insurance and anticipating costs. I’ve never heard of any doctor giving me any idea of what it was going to cost up front for anything. ‘Oh, we’ll have to submit it to the insurance first.’ Unless it’s just a co-pay for a regular visit, it could be $5, it could be $1,000, it’s a complete toss up.”

  1. Explain thinking behind provider choices and pricing to promote transparency and trust:

“I feel like why y’all switching so much? But they’re just like, ‘Oh, we’re trying to find the best rate.’ I’m like, ‘No, you guys are probably cheap.’ I guarantee for 2024 when we have our benefits meeting they’ll have switched again.”

  1. Ensure there is a clearly designated staff member or consultant available to answer questions related to insurance coverage and healthcare system:

“So with my job, I have medical insurance, and then they also offer different types of insurance. But our HR director didn’t even know the types of plans that they offer, because they just don’t think about sharing that with employees, they just expect the insurance companies to communicate everything.”

  1. Provide a separate and additional training session for anyone to enroll in an HDHP to ensure they understand the implications, how they can make best use of an HSA, and offer financial support so they have the cash flow to make it work:

“Yeah, I think having a high deductible plan is just hard. If you don’t have enough to put away it’s not going to work. I really think companies need to absorb a little bit more. You’re not even paying your employees enough. If it’s a high deductible plan, and you’re not paying employees enough to contribute to an HSA, your job is not really done.”

  1. Prepare employees with expectations around billing and how to ask for itemized bills:

“When they’re going through the document it would be nice to just have maybe a section about billing, like how to understand them, like here’s an example of an itemized bill or even questions to ask.”

  1. Provide information about hospital financial assistance policies in case any employees are eligible:

“A lot of people don’t know about [financial assistance]. I even asked when I spoke with one of the financial folks. I was like, Are people aware of this? She’s like, no, a lot of people don’t know about it.”

  1. (And the kicker…) Provide access to financial coaching services for employees as a benefit as part of any financial wellness program:

“I haven’t had to adjust my financial goals, only because of my great financial coach. She helped me call them about a payment plan so I didn’t have to touch my emergency fund. But the whole reason why I had it is because of working with my financial coach so I’m thankful I didn’t have to touch it.”

A financial literacy coach or personal finance coaching services or whatever you want to call an empathetic expert who helps your employees navigate their financial challenges and the benefits that you offer is critical to any lasting success. The data are clear that DIY resources don’t do much if anything at all.

Money and one’s health are personal issues, which is why employers need a personal and proven solution to help employees chart and navigate (medical) debt reduction strategies. Your workers and your organization will be stronger and healthier for it.