Older adults are being squeezed by inaccurate medical bills: CFPB

Billing practices could lead to inaccurate bills and collection attempts for money not owed

Older Americans are susceptible to inaccurate medical bills and reporting that could result in attempts to collect money that is not actually owed, according to a new issue spotlight report published this week by the Consumer Financial Protection Bureau (CFPB).

The Bureau found that nearly 4 million adults at or over the age of 65 report having unpaid medical bills, despite the fact that 98% of those surveyed had maintained health insurance coverage. Nearly 70% of those impacted also reported having medical insurance “from two or more sources,” likely from Medicare and supplemental coverage policy.

The rate of seniors reporting unpaid medical bills is also on the rise, according to the CFPB.

“The reported amount of unpaid medical bills among older adults increased by 20% between 2019 and 2020, from $44.8 billion to $53.8 billion,” the report states. “Yet older adults reported fewer doctor visits and lower out-of-pocket expenses in 2020 than in 2019.”

The medical billing system complexity is also likely to contribute to confusion and overpayment, according to the Bureau, and Medicare is not exempt from these kinds of problems.

“Older adults face a complex billing system with a high likelihood of errors and inaccurate bills,” the report states. “Complaints submitted to the CFPB involving Medicare commonly cite inaccurate billing as a source of unpaid medical bills in collections. Consumers who reported having multiple sources of insurance were especially likely to note problems with inaccurate billing.”

Eligible beneficiaries who qualify for both Medicare and Medicaid should have little or no out-of-pocket expenses for care that is covered by Medicare, the CFPB explained. Still, this group is more likely to report unpaid medical expenses, according to the report.

“Federal and state laws prohibit providers from billing certain dually eligible beneficiaries for payment beyond a nominal copay set by the state, if any,” the report states. “Despite these protections, older adults with both Medicare and Medicaid are more likely to report unpaid medical bills than the general older population. CFPB findings suggest that providers are billing older dual beneficiaries for amounts they don’t owe.”

What’s most damaging to a senior’s finances is that providers and billers can “refer inaccurate medical bills to collectors and credit reporting companies with significant consequences for the health and financial security of older adults,” the report states.

The CFPB previously highlighted that over 4 million seniors are impacted by medical debt, many with significant hardships. It also found that among seniors, medical debt is disproportionately more common among seniors of color, those living near the poverty line, people who are uninsured, unmarried seniors and those who do not own their own homes.

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