The Racial Divide of Healthcare Debt

There is nobody who will disagree that there are problems with medical debt across America. From massively underestimating how much medical debt actually exists to hospitals and healthcare facilities across the country being called out for being too aggressive in trying to collect on unpaid debts — especially when the amounts collected are not significantly adding to the facilities’ bottom lines — there is no doubt that there are more problems than solutions. A published media report has exposed yet another problem facing healthcare facilities and the companies that collect their debts — racial inequality.

People living in communities of color are four times more likely to have medical debt that has been placed with a collection agency than people living in communities where the majority of people are White, according to the report. In many cases, the report states, doctors and hospitals are not doing enough to protect their patients from “harsh billing practices” like “garnishing wages, charging high interest rates, placing liens on homes, and suing patients.”

Some facilities even claim in the report that they were unaware that the collection agencies they used were filing lawsuits against individuals with unpaid medical debts.

Going after those patients only amounts to approximately 1% of the total revenue brought in by a hospital, some advocates claim, making the practices that are being deployed not worth the squeeze of what they are bringing in. And the byproduct is creating serious financial situations for those with unpaid debts.

Advocates will continue to pressure healthcare facilities, especially those that are non-profit, from garnishing wages and putting liens on houses, and making it clear when financial assistance is available.

Racial gaps exist across many aspects of the healthcare industry. One poll, conducted in Maryland, revealed that less than half of African-Americans knew that hospitals provided free or low-cost care for low-income patients, compared with 79% of White respondents.

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