Medical Debt
What You Need to Know:
Hospitals are committed to making health care affordable and working proactively with patients to resolve billing concerns long before collection is considered. They routinely screen patients for financial assistance, offer financial counseling, connect patients to support resources, and provide discounted or charity care for our most financially vulnerable patients. Hospitals understand that patient circumstances sometimes change and are committed to helping patients navigate difficult times and through the available assistance options.
Rising medical debt is largely driven by broader challenges in health insurance coverage, including gaps in coverage, expiration of federal enhanced premium tax credits, and the growth of high-deductible health plans that shift more upfront costs to patients. These trends increase the financial burden individuals face when seeking care, drive more people to be uninsured and delay care, and contribute to unpaid medical bills across the system.
To keep hospitals open and serving their communities, we need policies that balance patient affordability with hospital sustainability.
Key Points/Hospital Perspective:
- Colorado’s hospitals have spent years building systems designed to protect patients long before a bill ever becomes a burden. Colorado hospitals don’t just treat patients and send bills. They absorb staggering amounts of unpaid care every single year as a core part of how they operate. Hospitals act on unpaid bills only after fully exploring every option to support patients through payment plans, outreach, and financial assistance.
- Since 2021, charity care provided by Colorado hospitals has increased 112% – an increase of $208 million. That’s care delivered to patients who couldn’t pay and absorbed by hospitals committed to keeping their doors open to everyone regardless of ability to pay.
- Hospitals and providers are caught in the middle. Hospitals don’t control what patients owe – insurers set deductibles, decide coverage, and determine reimbursement, then leave patients responsible for high out-of-pocket costs.
- Over the past decade, high-deductible plans have become the dominant form of employer-sponsored coverage across the country. These plans create the impression of comprehensive coverage while requiring patients to pay a premium and then also pay out of pocket for their deductible before insurance contributes a single dollar to their care.
- The result: Patients arrive at the hospital believing they’re covered. Then they receive a bill that reflects the gap their insurer left behind.
- Medical care is not free to deliver. The nurses, physicians, equipment, facilities, and around-the-clock care that make a hospital function all carry real costs – costs that must be covered somehow.
- When hospitals can’t recover payment, those costs don’t disappear. They shift to insured patients, employers, and communities.
- These impacts ripple through the broader community in the form of reduced services, scaled-back programs, and for rural hospitals, there is real risk that they can no longer afford to stay open.
- Every dollar recovered by a hospital isn’t profit. It’s the funding behind a life-saving piece of equipment, a rural emergency department that serves the only community for miles, and a health care workforce that patients depend on when they need it most.
- Before a patient ever hears from a collections department, hospitals have typically:
- Made multiple direct attempts to contact the patient
- Offered structured, flexible payment plans
- Connected patients with financial counselors and assistance programs
- Screened patients for charity care eligibility
- Colorado’s hospitals are deeply committed to protecting patients facing hardship and preserving a strong, sustainable, high-quality health care system.
CHA Contact: Bridget Frazier, senior director, advocacy and government relations | [email protected]
