To the surprise of probably nobody, the amount of out-of-pocket healthcare expenses placed on patients continued to rise, and will continue to do so at the same rate for at least the next five years, according to data that was released last week. Patients were expected to absorb and cover 10% more of their healthcare expenses last year, according to data released by the Kalorama Foundation. In total, the total out-of-pocket healthcare bill for patients is $491 billion in 2021, with another $800 billion that will be added during the next five years.
For companies collecting healthcare debt, the news may appear to be good — there will likely be more debts to collect in the coming years, but it also means that collectors will likely be competing with other healthcare debt collectors also trying to recover unpaid debts from the same patient.
The average out-of-pocket expense for a patient has grown to $1,650 per year in 2021, from $250 a year in 1980, according to researchers. That total is expected to continuing rising through the next five years.
Among the drivers that are adding to the financial burdens being placed on individuals are:
- More employers continuing to shift the burdens of healthcare affordability onto consumers, coupled with other policy changes that continue to make healthcare more expensive
- Business and economic trends
- The cost of treating chronic conditions — like obesity — on an aging population
“Consumers have noticed this trend and are becoming increasingly concerned with their ability to pay for the costs of illness,” the Foundation noted in releasing the data. “And for the lowest wage earners, these healthcare costs have become astronomical.”
Companies that specialize in collecting healthcare debts, either on a first-party or early out basis or those working bad debt accounts will have a steady stream of business for the foreseeable future. But whether they will be able to actually collect on those accounts is not as definitive.