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Paying for healthcare creates mental and financial health concerns

Fifty-two percent of insured Americans say paying for medical bills creates stress that is affecting their health.

Jeff Lagasse, Associate Editor

Photo: Kameleon007/Getty Images

Unaffordable medical bills, higher deductible health plans, and confusing billing statements have caused an increase in physical and mental health issues for a majority of insured Americans, according to a new study from Health Payment Systems and PayMedix.

The 2023 PayMedix "Healthcare Payments and Financial Disparities Study" polled more than 1,000 Americans with employer-provided health insurance, along with 210 HR benefits managers, to gain insights into the affordability and impact of the current healthcare billing market.

Among the most notable findings are that more than half (52%) of insured Americans said that paying for medical bills has been stressful, with nearly all of them (92%) claiming the stress has affected their physical and mental health.

About one-third of respondents said that out-of-pocket costs (33%) and deductibles (31%) are unaffordable. That increases to four in 10 Americans with a credit score of 669 or less who find their deductibles (44%) unaffordable.

More than half of Americans said that in the last six months, paying for medical bills has been stressful (52%). The stress is most prominent among younger generations, people of color and those with a credit score of 669 or lower.

Among a variety of health-related scenarios, nearly a third of respondents said the cost of an unexpected medical bill is the most stressful scenario (29%) that could happen. Only 13% said the same about the cost of having a sick family member.

In the past year, nearly one in five (19%) Americans have received collection notices from their medical providers, with a third of millennials (34%) and a quarter of GenZ (27%) getting sent to collections. Of all those sent to collections, nearly two-thirds (62%) say they feel more negative about their provider after receiving a collection notice.

This unexpected debt is causing nearly one-third (30%) of Americans to dip into their savings, with nearly one-in-five (17%) having to delay payments. The latter is significantly higher among those with lower credit scores (669 or less), which adds to the never-ending cycle of poor credit.


After receiving an unexpected medical bill, consumers may avoid future care altogether, with nearly one quarter (22%) saying it makes them never want to go to the doctor again.

Medical billing stress is compounded by the volume and confusion of billing statements, the survey found. Americans report receiving more than 70 bills and statements throughout the past year, mostly in the form of Explanation of Benefits, with about a quarter of respondents claiming their EOBs (29%), medical bills (25%) and what they owe (24%) are difficult to understand.

There appears to be a disconnect between employers and employees on the solutions to this problem. A majority (60%) of employees surveyed said their employers should be responsible for providing financial strategies to deal with the confusion, such as simplified billing, flexible payment options, and low-interest credit. Yet less than one in five report that their employers provide a payment solution that offers credit, or a solution that simplifies the billing experience.

Half of Americans and nearly two-thirds of Gen Z (64%) and Millennials (65%) strongly desire an employer-provided solution for simplified bills. Most are interested in flexible payment options with zero to low-interest credit (72%), as well as providing guaranteed credit up to their out-of-pocket maximum (54%).

But while nearly three-quarters of benefits managers (72%) said they are likely to consider a simplified billing experience that offers financial security for all employees, fewer than four in 10 claim they currently have solutions in place. This also conflicts with what consumers report when asked if their employer offers any kind of support.


A July 2022 Morning Consult survey found one in five adults in the U.S. received an unexpected medical bill in that year, even after a federal ban on surprise medical billing.

Adults who received unexpected bills were most likely to get them for in-network lab work that was sent to an out-of-network lab for assessment, which is covered under the No Surprises Act, or for testing or procedures not covered by insurance, which isn't. Another one in five were billed after being treated by an out-of-network doctor at an in-network hospital.

Sometimes those charges were hefty: 22% of adults who got unexpected bills were on the hook for over $1,000.


"Affordability challenges are taking a real toll, not only on the financial health of patients but their physical and mental health as well," said Tom Policelli, CEO of HPS/PayMedix. "It is particularly tough on people with lower credit scores and worsens the gap in health equity. The bad news is that the disjointed nature of our healthcare system has made it hard for consumers to even understand the financial side of their care. The good news is that there are holistic solutions that deliver efficiency to the system and affordability to consumers."

Twitter: @JELagasse
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