Americans are being bankrupted by medical debt

American health care is too expensive. Exhibit A is a new study of Americans' medical debt published in the Journal of the American Medical Association. That debt is twice as large as had previously been estimated — $140 billion in collections as of June 2020, compared with an earlier estimate of $81 billion. And it disproportionately affects the dozen states like Missouri that have refused to expand Medicaid under the Affordable Care Act.

Despite a referendum that approved Medicaid expansion, and the fact that the federal government would have paid 90% of the cost, Missouri legislators refused to expand Medicaid during their last session. By doing so, they turned down a $10-to-$1 federal match on the cost of expanding Medicaid, and likely consigned more Missourians to bankruptcy.

One out of 6 Americans, roughly 18% of the population, had medical debt being pursued by collectors during June 2020. Millions more owe medical debt that hasn't yet been sent to collections, either because they are making payments or because they paid their medical debts with high interest credit cards.

In 2019, when much of that debt was incurred, Americans spent $3.8 trillion on health care, an average of $11,582 for every man, woman and child in the country. Add another $427 per person to that figure. That's the population average medical debt in collections during June 2020.

Many people think of medical debt the same way they think about debt incurred by, say, buying a new car: Don't buy what you can't afford. But if someone needs a car and can't afford a Mercedes, there's always a Kia option. There is no Kia option for health care. A person who has cancer and needs chemotherapy is administered the same expensive drugs that doctors would give to Jeff Bezos or Bill Gates.

Among the roster of people in medical bankruptcy, earlier studies have found, are people who had insurance and those who didn't.

In no other developed country are citizens at risk of bankruptcy simply because they fell ill. As the new study shows, such bankruptcies are frighteningly common here. It's time for Congress and state legislatures — including Missouri's — to act.

The No Surprises Act is designed to protect Americans from unexpected medical bills. But Missouri lawmakers still stand in the way of Medicaid expansion to help low-income people avoid deeper medical debt. But neither of those acts, by themselves, will solve America's health care crisis.

Research has shown over decades why American health care is so expensive. It isn't that we use more care, or that we have access to newer drugs and technologies than people in other developed countries.

The real reason was explained by the late Princeton health economist Uwe Reinhardt in a 2003 journal article, "It's the prices, stupid." Until Americans focus on those higher prices, the trail of bankruptcies will continue to grow as more and more Americans are left behind.