Health care costs increasing physical and mental problems for patients

The majority of insured patients are facing increased physical and mental health issues thanks to unaffordable medical bills, high-deductible health plans, and confusing billing statements, according to a study from HPS/PayMedix.

Stress: ©Kalim - stock.adobe.com

The study found that 52% of insured Americans said that paying medical bills has been stressful, with 92% claiming the stress has affected their physical and mental health.

Other findings that show that health and financial wellbeing are closely related:

About one-third of respondents said that out-of-pocket costs (33%) and deductibles (31%) are unaffordable. That increases to four in ten Americans with a credit score of 669 or less who find their deductibles (44%) unaffordable.

Over half of Americans said that in the last six months paying for medical bills has been stressful (52%). The stress is most prominent among younger generations, people of color, and those with a credit score of 669 or lower.

After receiving an unexpected medical bill, consumers may avoid future care altogether, with nearly one quarter (22%) saying it makes them never want to go to the doctor again.

Among a variety of health-related scenarios, nearly a third of respondents said the cost of an unexpected medical bill is the most stressful scenario (29%) that could happen. Only 13% said the same about the cost of having a sick family member.

In the past year, nearly one-in-five (19%) Americans have received collection notices from their medical providers, with a third of millennials (34%) and a quarter of GenZ (27%) getting sent to collections.

Of all those sent to collections, nearly two-thirds (62%) say they feel more negative about their provider after receiving a collection notice.

This unexpected debt is causing nearly one-third (30%) of Americans to dip into their savings, with nearly one-in-five (17%) having to delay payments. The latter is significantly higher among those with lower credit scores (669 or less), which adds to the never-ending cycle of poor credit

Medical billing stress is compounded by the volume and confusion of billing statements, the survey found. Americans report receiving more than 70 bills and statements throughout the past year, mostly in the form of Explanation of Benefits (EOBs), with about a quarter of respondents claiming their EOBs (29%), medical bills (25%), and what they owe (24%) are difficult to understand.

“Affordability challenges are taking a real toll, not only on the financial health of patients but their physical and mental health as well,” said Tom Policelli, CEO, HPS/PayMedix, in a statement. “It is particularly tough on people with lower credit scores and worsens the gap in health equity. The bad news is that the disjointed nature of our health care system has made it hard for consumers to even understand the financial side of their care.”

Americans are increasingly looking to their employers for help navigating the complex health care billing system. The study found that a majority (60%) of employees said their employers should be responsible for providing financial strategies to deal with the confusion, such as simplified billing, flexible payment options, and low-interest credit. Yet, less than one in five report that their employers provide a payment solution that offers credit, or a solution that simplifies the billing experience.

In addition, the survey found that half of Americans and nearly two-thirds of Gen Z (64%) and Millennials (65%) strongly desire an employer-provided solution for simplified bills. Most are interested in flexible payment options with zero to low-interest credit (72%), as well as providing guaranteed credit up to their OOP maximum (54%).

“Many consumers feel like they have high deductibles even if their plan does not fit the government's legal definition of one,” said Brian Marsella, president, HPS/PayMedix, in a statement. “As companies push more of their workforce into high-deductible health plans, employees feel their employers have a responsibility to do more to help with the volume, confusion, and stress of healthcare billing.”

The 2023 PayMedix “Healthcare Payments and Financial Disparities Study” polled more than 1,000 Americans with employer-provided health insurance, along with 210 HR benefits managers, to gain insights into the affordability and impact of the current healthcare billing market.