For Black Americans, lifesaving medical care too often leads to lifelong debt

Maurice Handy of Charlotte, North Carolina, was diagnosed with stage 4 medullary thyroid cancer. Following surgery, he needed chemotherapy for life. He had no insurance to cover treatment at an estimated cost of $10,000 monthly. Although he was a veteran and the VA was willing to treat him, it wouldn’t cover the cost of chemotherapy unless the cancer was deemed service-related.

 “Many doctors and oncologists explained that all they could do was keep me comfortable until I transitioned, said Handy, known professionally as DJ Peer Pressure. “I couldn’t help but wonder whether not having insurance played a part in their lack of aggressiveness in treating my cancer.” 

Handy eventually turned to his former employer, a large pharmaceutical company, which covered the cost of the drugs. Nevertheless, he owes $10,000 for medical expenses. Without the company’s assistance, that sum would be closer to $1.2 million.

On any given day, as many as 3 million Americans hold medical debt exceeding $10,000. Black Americans, particularly young adults and low-income people, are disproportionately saddled with such debt, finds a new report by the National Consumer Law Center.  Those who live in states without expanded Medicaid are significantly more likely to incur medical debt.

Despite the Affordable Care Act, 31 million people remain uninsured. And of those with insurance, an estimated 23% are underinsured. Black Americans are more than twice as likely as white Americans to have no insurance or inadequate coverage. Their options when they get sick: Forgo medical care, even life-saving treatment, or take on debt.

Given the well-known racial disparities in income and wealth,  many Black households have little cushion when they incur medical debt. In 2019 the median white household held $188,200 in wealth, nearly 8 times that of the average Black household, at $24,000.

Compounding the burden, debt collectors are known to be particularly aggressive in their efforts to recover money from people of color. Collection agencies and hospitals are far more likely to push for wage garnishments and report a Black patient’s medical debt to credit bureaus while working with white patients to minimize monthly payments or even write off portions of the debt.

In April, Vice President Kamala Harris laid out the Biden administration’s four-step plan to address medical debt, acknowledging the outsized impact on people of color. The plan includes provisions to:

1.    Hold medical providers and debt collectors accountable for harmful practices;

2.    Reduce the role that medical debt plays in determining whether people can access personal or business loans;

3.    Help over half a million of low-income veterans get their medical debt forgiven; and,

4.    Inform consumers of their rights.

“It is imperative to acknowledge and address historical drivers that can lead to such disparities in unmet medical debt, said Vabren Watts, director of health equity for Health Affairs. “These include racial discrimination in hiring and employment practices that has stymied wage growth for many Black Americans, as well as discriminatory housing policies that have prevented many Black Americans from achieving and sustaining homeownership. All of these mentioned, including being pigeonholed in jobs with less generous employee health benefits, can hinder wealth accumulation and result in higher amounts of past-due medical debt for some racial and ethnic minority households.”

Rooted in systemic racism

Before civil rights legislation outlawed racial segregation throughout the United States, hospitals were allowed to refuse treatment and upcharge for medical services for Black people.

“I was a nurse in a Birmingham, Alabama, hospital providing care to Black people,” recalls Barbara Rupert, 80, who now lives in Colorado Springs, Colorado. “Health insurance may have existed in pockets around the country, but it wasn’t available for us colored folks, especially in the Deep South. I remember that white patients were charged considerably less than Black folks for the exact same procedures. Charitable organizations designed to help poorer patients were created, but there’s a longstanding history of not offering those services to people of color.”

She continued, “I watched and was powerless as hospitals routinely turned away colored folks — even those with life-threatening conditions. It’s no longer legal to refuse to provide medical services to Black people, but we know it still happens. Nowadays, it feels like the way to continue marginalizing us is to provide the services but force us into medical debt.”

For many people, the fear of mounting debt and the inability to take time off from work lead to dangerous delays in medical care. By the time someone sees a doctor, the ailment has often advanced beyond the easily treatable stage. All these factors combine to drive racial disparities in cancer, diabetes and other diseases, widening already shameful gaps in health and wealth.

How debt drives inequality

Maurice Handy has been paying on his debt for years. But with interest,  administrative fees and never-ending bills for non-chemo-related treatment, he has not managed to wipe the ledger clean. He has worked out a payment plan and so far his credit report hasn’t been affected. But that’s not the norm.

In 2016, doctors recommended that Tonya Scott of Delaware undergo gastric sleeve surgery. A surgical error required nine corrective surgeries, including gastric bypass. Today Scott’s stomach is the size of a golf ball, which puts her at risk for malnutrition and other complications.

“It’s been painful enough that I have to fight to remove every bill I’m sent that arose out of the subsequent surgeries, but the hospital is now making notations on my credit report,” Scott said. “I watch my credit report like a hawk and fight every entry.”

Medical debt has long-term consequences well beyond the drain on finances. It can hinder the ability to obtain credit of finance a home mortgage, car or business. With lowered credit scores, finance charges are high, making something seemingly inexpensive out of reach. All of this can lead to long-term financial insecurity and make it extremely expensive to be poor.

“The finance charge on my car is definitely higher, thanks to my lowered credit score,” said Scott.

Motivated by his own experience and stories like Scott’s, Handy has become a patient advocate. “Nobody should die because of lack of access to expensive treatments or go into massive debt to stay alive.”

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