Feb 16, 2023

Recent articles

CCLP’s 2024 legislative wrap-up, part 2

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs. Part 2/2.

CCLP’s 2024 legislative wrap-up, part 1

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs.

Medical Debt and Credit Reporting: A CCLP Deep-Dive, Part 1: Introduction 

by | Feb 16, 2023

Low credit scores can wreak havoc on a person’s life. From housing to employment, it can take years for a person’s credit score to recover from a derogatory mark. An account in collections remains on a credit report for seven years, even if the debt has been settled with creditors. When people think of debt that harms credit scores, people often think of frivolous, irresponsible credit card spending on luxury items, but data shows that the majority of consumer debt in collections is medical debt – the astronomical bills that follow accidents, illnesses, or disabilities that are out of people’s control. If you don’t carry medical debt, you likely know someone who does.  

According to the Consumer Financial Protection Bureau, in 2021, 58% of all debt collections were for medical debt, far larger than any other category. In comparison, the next highest portion of debt, telecommunications debt, amounts to only 15%. Medical debt accounts for nearly four times the amount of other debt, showing us just how prevalent medical debt is.  

In this series, we’ll explore the nature of medical debt, the severe impacts of medical debt on the lives of patients and their families, and how a new CCLP-led bill, House Bill 23-1126, proposes to dramatically improve the situation for Coloradans everywhere. 

 

The scourge of medical debt 

Medical debt is the product of an out-of-control healthcare system which is unaffordable for many Americans. Gofundme.com, the self-proclaimed “leader in online medical fundraising,” reports over 250,000 medical fundraisers per year, amounting to $650 million dollars raised annually. Though these numbers are a powerful testament to the kindness of neighbors, friends and families, these numbers are also a harrowing reminder of the problems with healthcare in America. We should collectively balk at these numbers — the healthcare industry is raking in record profits while patients must beg strangers online for relief.  

The main factors contributing to the rising medical debt crisis are rising health care prices and increase in cost-sharing and insurance plans with high out-of-pocket costs for patients. Medical debt is the largest contributor of personal debt in the United States, at an astounding $88 billion. In Colorado alone, the debt totals $1.3 billion. Nearly 13% of all Coloradans have medical debt in collections, which puts the state above the national average of 9%. According to the National Consumer Law Center’s 2019 report, Don’t Add Insult to Injury: Medical Debt & Credit Reports, “nearly 1 in 6 Americans were contacted by a debt collector over a health care bill in the past year.”  

Medical debt can impact a person’s life in myriad ways, from housing stability, to physical and mental health. A Kaiser Health report showed that 70% of people struggling to pay medical bills (including those with and without insurance) reported having to “cut back spending for food, clothing, or basic household items.” Another study by the JAMA Network found that people carrying medical debt are 2-3 times more likely to experience “food insecurity, being unable to pay rent or mortgage and utilities, and experiencing eviction or foreclosure.” Furthermore, having medical debt can itself be a barrier to accessing healthcare services. Of people who carry medical debt, one in seven adults have been denied services due to their debt, and eight in ten adults report skipping or delaying care or medications because of the cost, which in turn, can greatly exacerbate existing physical and mental health conditions. 

Medical debt is a vicious cycle of systemic failures and causes incalculable harm to vulnerable Coloradans, especially those with marginalized identities. Stay tuned for the next articles in this series, where we will be deep diving into the world of credit reporting and the inequitable and harmful practice of including it on credit reports.  

 

Learn more about CCLP’s priority bill, House Bill 23-1126: Medical Debt Credit Reporting Protections, and be sure to sign the petition supporting the bill!  

Recent articles

CCLP’s 2024 legislative wrap-up, part 2

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs. Part 2/2.

CCLP’s 2024 legislative wrap-up, part 1

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs.

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.