Executive Summary

Older adults, most of whom have health insurance coverage, are among the millions of Americans who experience problems with reporting and collection of inaccurate medical bills. This spotlight describes how medical billing practices can lead to inaccurate bills and attempts to collect amounts that are not owed from people 65 and older.1 It also describes the impact of inaccurate medical bills, including coercive credit reporting on older adults. The spotlight uses the most recent data from the Census Bureau’s Survey of Income and Program Participation (SIPP),2 and consumer complaints submitted to the CFPB between January 2020 and December 2022.3

Key findings:

• In 2020, nearly four million adults ages 65 and older reported having unpaid medical bills, even though 98 percent of them had health insurance coverage. Nearly 70 percent of these older adults with unpaid medical bills also reported having medical insurance coverage from two or more sources.
• The reported amount of unpaid medical bills among older adults increased by 20 percent between 2019 and 2020, from $44.8 billion to $53.8 billion. Yet older adults reported fewer doctor visits and lower out-of-pocket expenses in 2020 than in 2019.
• Older adults face a complex billing system with a high likelihood of errors and inaccurate bills. Complaints submitted to the CFPB involving Medicare commonly cite inaccurate billing as a source of unpaid medical bills in collections. Consumers who reported having multiple sources of insurance were especially likely to note problems with inaccurate billing.
• Millions of older adults ages 65 and older are covered by Medicare and Medicaid. These individuals are known as dually eligible beneficiaries. Most dually eligible beneficiaries should have little or no out-of-pocket costs for Medicare-covered care. Federal and state laws prohibit providers from billing certain dually eligible beneficiaries for payment beyond a nominal copay set by the state, if any. Despite these protections, older adults with both Medicare and Medicaid are more likely to report unpaid medical bills than the general older population. CFPB findings suggest that providers are billing older dual beneficiaries for amounts they don’t owe.
• Providers and billers refer inaccurate medical bills to collectors and credit reporting companies with significant consequences for the health and financial security of older adults. In CFPB credit reporting complaints, for example, older adults describe how inaccurate medical tradelines on their credit reports have affected their access to affordable credit. Older adults also report that trying to address inaccurate bills that are now in collection and appearing in their credit reports takes a significant emotional and physical toll.
• The medical billing and collection system devotes insufficient resources to preventing, identifying, and correcting errors. Older adults may find it especially challenging to navigate the medical billing system and resolve errors because they are more likely than other consumers to experience functional limitations that reduce their ability to detect and correct inaccurate bills.

Introduction

Older adults, most of whom have health insurance coverage, are among the millions of Americans who experience problems with reporting and collection of inaccurate medical bills. In 2020, nearly four million adults ages 65 and older reported having $53.8 billion in medical bills that they were unable to pay in full, even though 98 percent of them had health insurance coverage.4 Nearly 70 percent of these older adults with unpaid medical bills also reported having medical insurance coverage from two or more sources such as Medicare, Medicare Advantage, Medicaid, Medigap, employer-based coverage, or Tricare.5 Additional sources help protect older adults from medical expenses by covering services Medicare does not broadly cover, such as hearing, vision, or dental care, and/or reducing eliminating out-of-pocket costs.6