Concerns Over Rising Medical Debt in Massachusetts
As Massachusetts prepares for possible increases in medical debt, recent federal policy changes are expected to contribute to a growing number of uninsured and underinsured individuals. Estimates suggest that up to 300,000 Medicaid recipients may lose their coverage due to new eligibility requirements, along with the potential expiration of subsidies leading to higher premiums for those purchasing insurance independently.
The impact of medical debt is extensive, affecting people’s ability to access healthcare and putting added pressure on their budgets for essentials like food and housing.
In 2006, legislation aimed at providing health insurance to almost all residents was signed by Governor Mitt Romney. This law formed the foundation for the federal Affordable Care Act. However, despite having many excellent healthcare facilities and professionals, Massachusetts faces some of the highest medical costs in the country.
A recent study indicates that residents in households earning between 139% and 500% of the federal poverty level, roughly $39,000 to $139,000 for a family of four, often find themselves in significant medical debt. Notably, Black residents are more likely to carry medical debts of $2,000 or more, with many remaining in debt for over a year.
The findings also highlighted that those lacking insurance, particularly Black individuals and families with incomes under 300% of the federal poverty level—which is about $83,000 for a family of four—were more susceptible to accumulating medical debt.
Insurance gaps seem to play a significant role in this issue. The report revealed that residents with family members who had been uninsured for a time reported debt rates nearly double those of families with continuous coverage.
However, even those with uninterrupted health insurance aren’t immune to accumulating debt. For them, the primary sources of medical debt were deductibles (72%), copayments (65%), and uncovered medical expenses (53%).
The report, titled “Bill Burden: Understanding Massachusetts’ Medical Debt,” utilized data from the 2021 and 2023 Health Insurance Surveys to analyze unpaid medical bills across the state’s 7.1 million residents.
Ashley Blackburn, the interim executive director of Health Care for All, expressed concern over the increasing burden of medical debt in Massachusetts. “We know this burden is not shared equally. Low- and moderate-income households, as well as Black residents, are more likely to face debts exceeding $2,000 that take longer and are costlier to pay off,” she stated. “Massachusetts must act swiftly to protect consumers already grappling with escalating debt, especially as future federal healthcare cuts loom.”
Lora Pellegrini, CEO of the Massachusetts Association of Health Plans, echoed similar sentiments, acknowledging the strain medical debt puts on household finances. She also suggested that various factors, such as high service costs, rising prescription prices, and socio-economic conditions, contribute to this growing problem.
This report arrives at a time when many Americans are likely to see healthcare costs spike next year. With the enhanced tax credit for insurance premiums from the Affordable Care Act set to expire without congressional action, experts warn out-of-pocket expenses might double. The cessation of these tax credits played a significant role in the previous 43-day government shutdown.
Alan Sager, a health policy professor at Boston University, cautioned that if Congress and the current administration do not extend subsidies, the problems highlighted in the report will likely worsen. “People will suffer; access to healthcare will dwindle,” he warned.
Massachusetts Governor Maura Healey aligned with these concerns, criticizing federal actions to extend Affordable Care Act tax credits while cutting Medicaid. “That’s why we are taking steps here in Massachusetts to lower costs, including introducing caps on out-of-pocket expenses and deductibles for the first time,” she noted.
