“Miles to Go Before We Sleep”: Resolving Medical Debt under Massachusetts Health Reform by Andrew Cohen

Chapter 58 has been extremely effective in expanding coverage to tens of thousands of Massachusetts residents who were previously uninsured. In spite of having insurance coverage, problems remain for many. A report released this summer by the Urban Institute found that nearly one in five Massachusetts residents had medical debt. Not surprisingly, the problem was most severe among lower income residents, almost one quarter of whom had medical debt. Medical debt causes health access problems and financial insecurity for many of those who have it.

Today, The Access Project released “In Debt But Not Indifferent,” based on the experiences of nearly 200 clients that we assisted through our Medical Debt Resolution Program.

We had two goals in mind when establishing this program. The first goal is obvious: to help people resolve their unaffordable medical bills. We provided one-on-one coaching to help people appeal denied claims with insurers, submit bills to public programs, and negotiate affordable payment arrangements with providers. Our second goal was to identify patterns of problems and policies that contributed to the creation of medical debt.

The Access Project’s Medical Debt Resolution Program seeks to ensure that existing programs work properly so that medical bills are covered by the parties that should have paid them in the first place. We also work with individuals to help them establish affordable payment arrangements, so they can resolve their medical debts without destabilizing fragile family budgets or increasing personal debt.

Our work with clients between September 2006 and April 2008 revealed that a silent tragedy is taking place for many Massachusetts residents, both insured and uninsured.

There is a major gap in public awareness about private insurance appeal rights and existing programs, which has resulted in the unnecessary transformation of many medical bills into medical debt.

First, we found that a number of our insured clients were not aware of their right to appeal denied claims. The Access Project was able to help numerous clients secure payment of medical debts through successfully appealing their insurance denials either directly with the insurer or through the Office of Patient Protection, a state agency that conducts external reviews of denied insurance claims. We also worked with people who were unable to file successful appeals because of delays made by their insurers. Another group of clients unknowingly exhausted their appeal rights by not filing their appeal within the necessary timeframe, and therefore had no further recourse. Most of these people had little choice but to work directly with their providers to resolve the bills through discounts and payment plans.

Second, we found that many clients, both insured and uninsured, did not know that they could get retroactive coverage for their medical bills through the Health Safety Net. The Health Safety Net is an incredible resource for Massachusetts residents—much of the medical debt that Access Project staff helped to resolve was covered by this program. Unfortunately, very few of our clients understood that this program would pay for past medical debt until informed of this by The Access Project.

We found the awareness gap to be particularly prevalent among people who were privately insured. For people with low- to middle incomes, the Health Safety Net supplement private insurance to cover out-of-pocket costs owed to acute care hospitals and community health centers. There is a retroactive coverage limit of 6 months, however. Because insurance companies can take months to process medical claims, sometimes this time frame was too restrictive for our insured clients. Others only learned about the program from The Access Project when it was too late to get coverage.

Many uninsured clients were also unaware of the Health Safety Net. Clients who were eligible for the state subsidized insurance plans faced a particular problem: For these clients, the Health Safety Net only pays for bills incurred 10 days in the past. This restrictive time limit caused many of our clients to incur medical debt.

We also found that insured and uninsured clients alike were not aware of the Health Safety Net’s Medical Hardship program. This program has no upper income limits—anyone who has large medical bills beyond their means can receive sliding-scale coverage. However, even the staff at a number of hospitals where our clients had outstanding bills were unaware of this program. This was especially problematic since people can only apply for the program through their providers. Several of our clients successfully accessed this program to help resolve huge unaffordable medical bills.

There is no doubt that consumers have a responsibility to reach out to insurers and providers to deal with their medical bills. However, The Access Project’s work illustrates the need to improve awareness and the flow of information to ensure that all Massachusetts residents who incur medical debt are informed of existing protections and programs that may provide them with relief.

Andrew Cohen is Coordinator of The Access Project’s Medical Debt Resolution Program, and a co-author of “In Debt But Not Indifferent.”