By Stacy Mays, Founder, Copeland Road Health Ventures

August 2024 – Medical debt is crushing middle America.  Folks with good jobs and employer sponsored health insurance are being driven to bankruptcy.  Two out of three personal bankruptcies are medical expense related.

Americans are carrying almost $200B in medical debt.

Historically, many have thought of medical debt as a problem impacting those with lower incomes.  With Medicaid expansion, the Children’s Health Insurance Plan and income-based subsidies available for State healthcare exchange plans, the direct impact of medical expenses on lower income individuals has been reduced. But there is a catch.

For lower income individuals, although their direct cost of medical care is not driving bankruptcy, the related costs like transportation, lost work hours and supplies not covered by insurance still creates medical debt.

Most people with employer coverage think they have “good” insurance.  Many don’t realize it, but in addition to forcing them to cover higher and higher out of pocket costs, their health insurance is also suppressing their wages. They are also unaware that the cash price for many drugs and medical services is far less than their “in-network” health plan rates.

The average premium for employer sponsored health insurance for a family of four will exceed $25,000 in 2025, a staggering number.  Couple that with the fact that most plans have deductibles approaching $4,500 and out of pocket maximums in excess of $15,000.  Even with a family income approaching $100,000, many Americans can’t pay an unexpected bill of $400.  An unexpected expense of $15K is more than most families can handle.

Over 100M US adults are carrying medical debt.  When surveyed, 50% of Americans say that they have delayed or avoided medical care because they fear the expense.

A recent conversation with a friend really hit home on this issue.  My friend’s husband works for a major health plan in a front line role. They have a high deductible health plan through his employer.  They are both in their 40’s, well-educated and very pragmatic.

Last fall, my friend shared that she was worried about her husband’s health.  He was experiencing some concerning symptoms including shortness of breath, daytime drowsiness and generally low energy.  They also knew that his blood pressure was high.

I suggested that he needed to see a doctor as soon as possible.  My friend’s response was sobering.  She knew he needed to see a doctor, but they had decided to wait for the next plan year for their health insurance before either of them sought care.  In addition to his condition, she thought she might need some minor surgery, and they couldn’t afford to “write a blank check” for deductible, copay and out of pocket expenses that could be $15,000 two years in a row.  They needed to wait.

They waited.  He’s fine and she had her surgery, but why is that OK?  Why should folks with full-time jobs and employer sponsored health plans have to live in fear of needing medical care?

When will we collectively have had enough of the status quo and demand something better?

There are approaches available that will help drive change in the employer sponsored health plan space and reduce the medical debt burden on employees.  These approaches include things  like direct primary care, competitive bid case rates, transparent PBMs, cash cards and consumer transparency tools.  ICHRA can also offer some relief.

Employers can help their employees avoid medical debt.  They must decide they are tired of the status quo and demand change.

About the Author

Stacy Mays is a versatile and strategic executive with over 20 years of experience in the healthcare industry.  She is a proven innovator with unique expertise at the intersection of operations, finance, technology, and clinical management.  She has worked for companies ranging from start-ups to industry giants.

Stacy has broad and deep subject matter expertise in all aspects of healthcare.  She has the demonstrated ability to identify robust new ideas, and the vision to guide their introduction into the mainstream.

In 2023, Stacy founded the advisory firm, Copeland Road Health Ventures (www.copelandroad.com) through which she provides strategy, product and product positioning expertise to executive leadership in a number of successful healthcare ventures. Her clients range from pre-seed startups to publicly traded, multinational corporations.