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Medical Debt Is On the Rise

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Due to one of the worst recessions since the Great Depression, hundreds of thousands of Californians lost their jobs, along with the health plans that came with those jobs, according to a new report from the UCLA Center for Health Policy Research.

As health plans stopped for many people, medical conditions persisted, thus creating a substantial jump in California’s currently high rate of residents with medical debt. This is confirmed by 2.6 million non-elderly Californians that had some kind of medical debt, which is an increase of 400,000 since 2007, according to the State of Health Insurance in California Report.

The bi-annual report confirmed that medical debt was the most among those uninsured all of the year, (of whom 18.4 percent had debt), and those uninsured for part of the year (23.2 percent). 9.1 percent of those with employment-based coverage reported some kind of medical debt as well.

“No Californian should have to take on debt to pay medical bills or go without access to health care just because they lost their job,” said Shana Alex Lavarreda, lead author of the report. “As the recession has so clearly shown us, linking health care to a volatile job market puts us all at risk.”

Researchers also feel that this report can help tailor health care reform for uninsured Californians.

“This data clearly indicates the need for successful implementation of the Affordable Care Act”, said Dr. Robert Ross, president of The California Endowment. “The rate of uninsured Americans increases annually, and the burden that presents to our health care system is economically unsustainable. Health care reform will ensure that many millions of Californians need not fear a potential health catastrophe just because of an economic downturn.”

Other findings in the report are as follows:

  • About half of Californians living with medical debt reported the amount to be below $2,000.
  • Among enrollees in Medi-Cal, a program that is designed to provide comprehensive care for low-income residents, 18.2 percent had medical debt, which nearly matches the percentage of those uninsured at 18.4 percent.
  • Uninsured children and adults were much more likely to report not seeing a health care provider in the past year (41.8 percent of children and 49.9 percent of adults) than children and adults with employment -based insurance (8.3 percent and 13.4 percent, respectively).

Diana Bonta, president of the California Wellness Foundation, said “This report provides yet more evidence of the need for change of our current system of health care and also of the devastating effect California’s budget crises has had on the programs that support our state’s most vulnerable residents.”

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