It’s Time to End the Racially Unjust Medical Debt Crisis

Did you know that medical debt is the number one cause of bankruptcy in the United States? That is 2016, one in six of us had past-due medical bills- something that resulted in a debt of $81 million. And just last year, medical expenses were the most significant contributing factor that pushed people into poverty.

Unfortunately, the national medical debt crisis is not distributed equally. In America, a third of black adults have past-due medical debt. White adults, on the other hand, have only a quarter of them with past-due medical debt. Thirty-one percent of people of color in California have some type of past-due debt in collection, compared to 19 percent among white residents.

According to a report by Brianna Wells on racial inequality and medical debt, medical debt is both a symptom and a cause of the racial wealth gap. For years, systemic racism has been at the forefront of causing racial inequalities in income and wealth, denying people of color channels of attaining wealth such as homeownership. In her report, Brianna Wells says that nearly 40 percent of adults with medical debt have been denied the opportunity to secure a mortgage loan. Wealth and income, however small, helps to cushion families against costly medical expenses, but for people of color, these medical expenses only exacerbate these racial wealth disparities. And on top of that, these medical debts create conditions of economic insecurity that result in poor health outcomes and premature death for people of color.

As Brianna puts it, medical debts are a social determinant of health. Depressive

symptoms are, therefore, more common in Black Americans than White Americans. The cost burden brought about by these tax debts, results in higher stress levels among Black Americans. Stress that comes with both physical and psychological effects on them. And perhaps it is because of this that Black people die averagely four years earlier than their White counterparts.

Additionally, medical debt can deter people from accessing medical care. According to Brianna’s report, people with medical debt delay when it comes to seeking healthcare. A consequence is worsened conditions that will cost an arm and a leg to treat when they eventually seek treatment. In 2020, 25 percent of American Households said that they delayed medical care due to high costs last year. A number that went significantly higher for low-income people, 36 percent saying they avoided seeking medical treatment on account of medical expenses.

Surprise medical billing, medical credit cards, uninsurance, and underinsurance and credit inequalities are the leading factors that cause medical debt. And even though California law prohibits surprise medical billing for emergency and non-emergency care at in-network facilities, people that end in crisis in out-of-network facilities end up being billed. Medical credit cards, on the other hand, have untenable deferred interest rates that are a debt trap for too many lowincome earners. Insurance to some degree may reduce the risk of accumulating debt, but Black, Hispanic, Native Americans experience the highest uninsurance rates nationally. They, therefore, have to pay large sums of money out-of-pocket. The current COVID-19 pandemic threatens to worsen the existing health disparities and further burden communities of color with more medical debt. Communities of color have been the most devastated by the pandemic, with community members experiencing record high layoffs and unemployment- something that has pushed them to be uninsured.

If racial injustice is to end, there needs to be an expansion of comprehensive financial assistance policies for all large, for-profit health care facilities, including ambulatory surgical centers and outpatient clinics. Secondly, hospitals should refrain from turning over medical debt to thirdparty collection agencies. Thirdly, mandate public reporting of debt collection practices by healthcare providers. Fourth, the government needs to incorporate debt cancellation into California’s larger strategy toward reparations for racial injustice. Finally, the local government should eliminate medical debt as part of the state’s COVID-19 recovery package via measures such as the proposed COVID-19 medical debt.

ABOUT THE AUTHOR

Eric Lawrence Frazier is President and CEO of the Power Is Now Inc. The Power Is Now is a multimedia company specializing in real estate and mortgage education for consumers and real estate professionals on various topics in real estate, lending, economics, and government policy since Sept. 1, 2009. The financial and real estate information is distributed through BlogTalkRadio, iTunes, TuneIn, and other online radio platforms nationwide, as well as online TV and eMagazines. Connect with Eric Frazier DRE 01143484 | NMLS 461807 | Office: 800-401-8994 x 703 | Direct: 714361-2105 and start your real estate investment journey or homeownership in safe hands.

ABOUT THE POWER IS NOW MEDIA

The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow.com.

Eric Lawrence Frazier, MBA. President and Founder, The Power Is Now Media

Works cited

https://www.urban.org/urban-wire/past-due-medical-debt-problem-especiallyblack-americans https://greenlining.org/wp-content/uploads/2021/03/Greenlining-MedicalDebt-Crisis-Report-2021.pdf https://www.calhealthreport.org/2021/08/10/its-time-to-end-the-racially-unjustmedical-debt-crisis/