By NextBestFitPrevent new debt by ending point-of-care bills
With no cost sharing (or income-capped cost sharing), new medical debt mostly stops.
Draft decision:ChosenPhase 2: Wave 1: seniors, near-seniors, and childrenConfidence: high · not yet reviewed
Follows from zero cost sharing.
Review ledgerHow this path connects
This path
Prevent new debt by ending point-of-care bills
Requires:
No cost sharing at the point of careUnderinsurance: covered, but can't afford to use itChosenCreates or worsens
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Eliminate point-of-care charges for covered services
- Wind down hospital patient-collections departments
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Medical debt affects about 100 million people
Eliminating or closely capping cost sharing addresses the cause of new medical debt, reduces hospitals' collections and bad-debt work, and removes patients' fear of bills when seeking care. Uncovered services, such as cosmetic care, can still create debt.
- About $1 trillion a year in administrative cost
Eliminating or closely capping cost sharing removes hospital work on collections and bad debt.
What it creates or worsens
- Depends on other changes to work
Preventing bills from generating debt depends on eliminating or nearly eliminating cost sharing.
Who's affected
Who gains
- Low- and middle-income households
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- People with ongoing or specialist care needs
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- Uninsured people
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- People with unaffordable deductibles or coinsurance
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- Doctors, nurses, and other clinicians
- About $1 trillion a year in administrative cost: Time goes to billing and insurer rules instead of patients.
- People with employer coverage
- About $1 trillion a year in administrative cost: Premiums pay for the administration.
- Taxpayers and public budgets
- About $1 trillion a year in administrative cost: Public programs pay for it too.
Who loses
- Medical debt collectors and buyers
- Medical debt affects about 100 million people: They collect or buy medical debt.
- Hospitals, clinics, and care organizations
- Medical debt affects about 100 million people: Hospitals sell medical debt or sue to collect it.
- Health insurers, brokers, and their shareholders
- About $1 trillion a year in administrative cost: Insurers, billing firms, and clearinghouses earn from the complexity.
- Insurance and billing workers
- About $1 trillion a year in administrative cost: Their jobs exist because of the complexity.
Other ways to soften the losses
- Transition program for collections workers
Where it has been tried
- UK, Canada: Medical debt is rare for covered services.
- United Kingdom: In 2023, 4% of UK adults reported serious difficulty paying medical bills or being unable to pay them, compared with 22% in the United States.Sources: Commonwealth Fund (2024)