Undue applauds federal commitment to curbing medical debt & tri-agency working group  

New York, NY – July 13 – Last Friday the White House issued a Fact Sheet outlining its approach to tackling rising healthcare costs and successes so far.  

Undue Medical Debt (RIP) is pleased that the Federal Government continues to tackle the issue of medical debt and acknowledges the financial, physical and emotional burden it imposes on far too many people nationwide. 

RIP’s CEO and president, Allison Sesso, and VP of Policy, Eva Stahl, were honored to attend the closed-door announcement (pictures here) and Undue plans to respond to the tri-agency working group’s Request for Information (RFI) as it gathers intel on the harmful impact of medical credit cards. 

Highlights from the Fact Sheet include: 

• A proposed new federal rule would amend loopholes that allow non-comprehensive, “junk insurance” plans to flood the market and leave unsuspecting people with surprise medical debt 
• Building on last year’s No Surprises Act, the administration is committing to closing lingering loopholes that result in consumers still receiving surprise medical bills 
• For the first time, a tri-agency working group composed of Consumer Financial Protection Bureau (CFPB), Health & Human Services (HHS) and Treasury are joining forces to understand the prevalence of medical credit cards and loans offered by providers which often have deferred (and very high) interest rates 
• As a result of the Inflation Reduction Act, which includes a stipulation that Medicare Part D enrollees will have capped out-of-pocket drug expenses at $2,000 per year by 2025, seniors can expect to save on average $400 per year  

“We here at Undue were honored to attend the president’s announcement and are especially pleased to see the administration tackling medical credit cards” shares Allison Sesso, Undue ’s president and CEO. “These products can discourage people from seeking the care they need and delayed care leads to worse health outcomes and ultimately more intensive healthcare needs which is a drain on the entire system.” 

Undue also applauds the administration’s decision to address “junk” and short-term health plans that mislead everyday people and expose them to financial risk. Plans that discriminate based on pre-existing conditions are unethical and need to be stopped immediately. Per the Urban Institute, an estimated 2.5 million people are enrolled in these ACA noncompliant plans.  

The additional guidance on surprise medical billing, specifically addressing health plans that contract with hospitals but then claim to be out-of-network, will go a long way in protecting patients as well. The administration has made it clear: healthcare services are either out-of-network and subject to the surprise billing protections, or they are in-network and subject to the ACA’s annual limitation on cost-sharing, further protecting consumers from excessive out-of-pocket costs. 

We are thrilled that the administration is addressing medical debt by calling upon the CFBP, HHS and Treasury to collaborate and explore provider and third-party practices surrounding medical credit cards and loans that may negatively affect patients and increase their medical debt. These payment arrangements may be secured when patients are under duress and do not take time to fully understand their financial options; further, patients do not have a complete understanding of deferred interest requirements that could lead to financial distress and instability when a zero percent window has passed.  

Finally, a new report released by the Department of Health and Human Services shows that nearly 19 million Medicare beneficiaries will save, on average, $400 a year on prescription drugs when the $2,000 out-of-packet cap goes into effect in 2025. These preliminary estimates are encouraging for the millions of people nationwide that struggle with their prescription drugs costs. Every day, people make devastating tradeoffs from skipping prescription drug doses to cutting their medication in half to maintain their health. Access to prescriptions should not make people financially insecure and risk their health. 

The state of medical debt in America: 

• There’s an estimated $195+ billion of medical debt burdening over 100 million people 
• Medical debt is the leading cause of bankruptcy 
• Black adults are 50 percent more likely and Hispanic adults are 35 percent more likely to hold medical debt compared to whites 
• Half of adults in the U.S. don’t have $500 for an emergency healthcare expense 
• Individuals with debt are three times more likely to struggle with mental health issues like anxiety and depression