Black History Month is a dedicated time for us to pay tribute to the contributions and the resilience of the Black community throughout the United States’ history. For centuries, millions of Black individuals have played a crucial role in helping to advance American political and cultural landscape and business into what it is today.
While recognizing Black people’s achievements, we must also acknowledge their continued struggle for racial justice. It is impossible to ignore the acute devastation faced by many Black individuals and their families during the current dual public health and economic crises. In addition to alarming rates of infection and deaths from COVID-19, the associated economic downturn has caused at least two million Black people to lose their jobs and insurance coverage. This will very likely result in increased medical debt in the Black community.
Medical debt is a growing concern in the United States. One in six people across socioeconomic and demographic backgrounds have incurred medical debt due to high costs of health care. However, Black people incur substantial medical debt compared with whites. According to the Commonwealth Fund, in 2020 Black people were significantly more likely than whites to report problems with medical bills or debt (45% vs. 35%).
Medical debt is both a cause and effect of longstanding racial inequities in income and wealth. For Black people, income and wealth inequities are the direct result of historical and contemporary policies and practices that negatively affect their health and deny them the opportunity to build wealth. For instance, redlining was designed to continue federal mandatory segregation by refusing to invest and insure mortgages in and near Black neighborhoods but subsidizing builders who were mas-producing entire subdivisions for whites with the requirement that none of the homes be sold to Black people. This practice was banned more than five decades ago, yet studies continue to show the direct links between redlining and poor health outcomes such as preterm births, late-stage cancer diagnoses and other chronic health conditions.
Medical debt worsens Black people’s economic insecurity. Those with medical debt, whether they are insured or uninsured, are likely to postpone needed care and spend less on essential items like food and basic household necessities. Further, the damaging effect of medical debt on credit ratings can have lasting impacts on their ability to wealth building, such as obtaining mortgage loans, employment or saving for retirement.
To make the matter worse, many Black people face disproportionately aggressive legal actions over unpaid medical bills brought by hospitals and health care systems, and in some cases end up in jail. With its significant financial consequences, medical debt can be viewed as a major, growing contributor to the vicious cycle of economic and health inequity for many Black individuals and their families.
As shown during the COVID-19 pandemic and resulting economic crisis, systemic racism is a life-or-death issue for Black people. The only way to improve their health and quality of life is to eliminate the policies and practices at all levels–federal, state and health care system–that threaten Black survival. While eradicating racial injustice requires long-term and bold actions, it is critical to offer immediate relief to Black families by implementing policies and practices that eliminates medical debt, which in turn will help close the racial wealth gaps overtime.
- At the federal level, it is critical that Congress include measures to protect people against medical debt to the 2021 COVID-19 relief package. At the minimum, federal policymakers should suspend medical debt collection during the COVID-19 pandemic and require health care organizations to work with patients on determining eligibility for financial assistance and navigating financial assistance policies before invoking extraordinary collection actions.
- At the state level, increasing access to health coverage and care through Medicaid expansion is an important first step. For Black people, the uninsured rates significantly reduced since the implementation of the Affordable Care Act, thanks in large part to states that expanded Medicaid. Medicaid expansion has been shown to reduce unpaid medical debt, increase levels of insurance, improve access to care and benefit overall financial health, particularly for low-income people. Secondly, state policymakers should expand their existing medical debt and billing laws to (1) include strong consumer protection rules for medical debt collection; (2) expand billing and collection policies to all medical providers; impose proactive obligations on providers to notify patients of costs; and (3) provide parameters for payment plans. Additionally, states can go beyond what is required at the federal level and strengthen their community benefit regulations to ensure that hospitals meaningfully engage their communities and address health inequities.
- At the health system level, health care organizations can immediately take actions to promote racial justice and invest in community benefit. Meaningfully engaging with the diverse communities they serve is a must. It is critical that health care organizations listen to the communities they serve, make commitments to act on community recommendations, provide adequate resourses to address community needs and shift the balance of power. Secondly, health care organizations should routinely assess impact of billing and collection policies on their communities, especially historically excluded patient populations. One way to do this would be to recognize medical debt is a social determinant of health that harms people’s ability to build wealth –a critical focus of Community Health Needs Assessments and community benefits initiatives, as well as to integrate medical debt into quality metrics to allow for ongoing monitoring and practice adjustments.