A number of factors can contribute to unpaid medical bills and medical debt among people with health insurance. These factors include out-of-network charges, deductibles and other cost-sharing, services that are not covered by Medicare, frequent and complex medical care, limited income, and medical billing errors.7 The persistence of unpaid medical bills, even among older adults with more comprehensive insurance coverage, is at least in part the result of inaccurate bills. Inaccurate bills, as noted in prior CFPB work, are referred to debt collectors and reported to credit bureaus with many consequences for access to credit, housing, and employment.8 Prior CFPB work and other studies have also documented the high complexity of the medical billing system and the effort required from consumers to navigate the medical billing system and correct errors.9
Older adults are more likely than adults ages 18 to 64 to rely on multiple payers. They are also more likely to live with multiple chronic health conditions that require frequent medical visits10 and complex care.11 Additionally, older adults are also more likely than adults ages 18 to 64 to experience functional limitations that reduce their ability to detect and correct inaccurate bills.12 As a result, they may be more likely to experience errors and inaccurate medical bills, and the challenges associated with credit reporting and collections on such inaccurate debts may affect them disproportionately.
This spotlight describes how medical billing practices can lead to inaccurate bills and debts not owed for people 65 and older. It also describes the impact of inaccurate medical bills, including coercive credit reporting on older adults. The spotlight relies primarily on the most recent data from the 2021 Survey of Income and Program Participation (SIPP), a nationally representative survey of U.S. households with a sample of 13,300 adults ages 65 and older, conducted by the U.S. Census Bureau between February 2020 and June 2021.13 It also relies on complaints submitted by consumers to CFPB between January 2020 and December 2022, including approximately 1,100 debt collection complaints and more than 300 credit reporting complaints about Medicare billing.14 Consumer complaints provide insights into how inaccurate bills reach debt collectors and credit reporting companies, the challenges that consumers face when they attempt to fix incorrect medical bills, and the impact of inaccurate medical bills on older adults.
Older adults report having unpaid medical bills despite many having comprehensive medical insurance
In 2020, 7 percent—or 3.9 million—adults ages 65 and older reported having unpaid medical bills according to CFPB’s analysis of SIPP.15 Some subgroups of older adults are more likely than the average older adult to report unpaid medical bills. They include older adults of color (12 percent), older adults with annual household incomes between 100 and 200 percent of the federal poverty level (13 percent),16 older adults with poor or fair health (13 percent), and older adults carrying other debts such as mortgages, student loans, and credit card debt (10 percent).17 In general, the percentage of older adults reporting unpaid medical bills was lower than the percentage of adults ages 18 to 64 (11 percent) reporting unpaid medical bills. That figure may be in part due to the nearly universal health insurance coverage among older adults, most commonly provided through Medicare.18 Health insurance provides important protections against medical debt by reducing out-of-pocket expenses, among other things.19
The amount of unpaid medical bills is also increasing among older adults. The total amount of unpaid medical bills reported by older adults increased by 20 percent between 2019 and 2020, from $44.8 billion to $53.8 billion.20 The average and median amounts in unpaid medical bills reported by older adults were also higher in 2020 ($13,800 average / $1,500 median) than in 2019 ($11,700 average /$1,200 median).21 These increases are higher than the growth in Medicare premiums, and greater than overall Medicare and health spending observed between 2019 and 2020.22 They are also surprising given that older adults who reported unpaid bills in the survey also reported fewer doctor visits and lower out-of-pocket expenses in 2020 than in 2019.23 Lastly, the amount of unpaid bills has increased among older adults despite notable recent improvements in the health of older adults with Medicare,24 and the reduction of Medicare coverage gaps for older adults and enhanced assistance programs for low-income beneficiaries over the last 20 years.25
FIGURE 1:
Older adults’ unpaid medical bills by insurance coverage, December 2020
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