As Bills Balloon, More Hospitals Push Patients to Pay Up Front

PPACA has unintended consequences

Hundreds of U.S. hospitals are trying to cope with an unexpected consequence of the Patient Protection and Affordable Care Act: millions more Americans have health insurance, but it requires them to spend thousands of dollars before their insurer kicks in a dime. Since hospitals don’t want to end up footing the bill, they are now experimenting with prepayment strategies for patients, with a growing number of centers requiring payment before scheduled care and offering no-interest loans, according to interviews conducted by the Reuters news service.

The PPACA extended insurance to 20 million Americans, which initially helped hospitals begin to shrink debt from uninsured patients who could not pay their medical bills. But more and more people in PPACA health plans or in employer-based plans are choosing insurance that features low monthly payments. The trade-off is high out-of-pocket costs when they need care. Even if President Trump dismantles the PPACA, as promised, these plans won’t disappear, according to the Reuters article.

The trend toward up-front payment is expected to accelerate this year because unpaid bills are creating massive bad debt for even the most prestigious medical centers, the article says. U.S. hospitals had nearly $36 billion in uncompensated care costs in 2015, a figure that largely consists of unpaid patient bills.

Prepayment strategies are being rolled out by hospitals across the country because the financial equation has changed so much for patients––even the insured ones.

Almost half of Americans (45%) polled by the Kaiser Family Foundation said they would have difficulty paying an unexpected $500 medical bill. The average deductible this year for the least-expensive of the PPACA health plans is $6,000 for an individual––an 18% hike since 2014––and more than double that for a family, according to government data.

Wake Forest Baptist Medical Center in North Carolina has seen its bad debt creep up in recent years as more patients saw out-of-pocket expenses soar, with some deductibles reaching $15,000, the article notes.

“We’ve seen that many patients are unaware of the increases in their deductibles,” said CFO Chad Eckes. Wake Forest now asks for payment before nonemergency services are provided but also offers zero-interest, longer repayment options.

“It’s a challenging position,” he said. “It’s a discussion no one wants to be in, and none of us enjoy.”

Source: Reuters; April 13, 2017.