Sohn: Tennesseans are mired in medical debt

A nurse gives a patient a shot. One in four Tennesseans have medical debt that hurts their credit report. (AP Photo/Jacquelyn Martin)

It seems a sad irony that in one of the states where Donald Trump has some of his strongest support - in part because he's mistakenly admired for his supposed good business sense - one in four Tennesseans had medical debts that hurt their credit history in 2016.

In fact, Tennessee has the 10th highest rate of medical debt in the country. The median amount of medical debt on Tennesseans' credit reports was $739. Hamilton County's number is higher still: 29% had medical debt in collections on their credit reports, with a median amount of medical debt of $769. Nationally, the rate is about 18%.

The research into Tennesseans' medical debt was performed by the Sycamore Institute, an independent, nonpartisan public policy research center for Tennessee, and funded by the Annie E. Casey Foundation.

That research also found, unsurprisingly, that while medical debt is common across most demographic and socioeconomic groups in Tennessee, it is more common among the uninsured, those with lower incomes or education levels and people of color.

Why does it matter?

Because despite the bravado of our president who says he's with the little guy even as he pushes tax breaks for the extremely wealthy and refuses to talk about his own taxes, we live in a time when 40% of all other American adults say they would have trouble covering an unexpected $400 expense.

That means medical bills don't have to be huge to create additional financial hardships. And a bad credit report can reduce access to jobs and refinancing credit - the very things that can help people pay down debt and build better financial security.

A 2015 National Financial Capability Study found that a person with medical debt is more likely to have credit card debt, student loans, car loans, mortgages and payday loans. In fact, the study found that 51% of Tennesseans with unpaid medical bills (vs. 23% without) reported taking a payday loan in the last five years.

Here's another stinger: Having insurance is not guaranteed to help. Almost every employer-sponsored insurance plan in Tennessee now requires a deductible, and the average family plan deductible has nearly tripled - to about $4,000 - since 2002.

And it isn't just national politicians who seem determined to kick people fighting to keep their finances in the black.

Earlier this month, a new conservative study from the American Legislative Exchange Council ranked Tennessee as one of the top states for its economic outlook. But that same week, we learned that over the past two years, the state had been dropping health insurance coverage for about 130,000 low-income children enrolled in TennCare or CoverKids, including 5,500 in Hamilton County. Chattanooga Mayor Andy Berke has called for legislative oversight to stop the purge.

The price of health care can't really be budgeted the way a car payment can. When patients go to the doctor or parents take their children to the emergency room, they often don't know the price of medical care before it is provided to them.

Worse still, they can get trapped between providers and insurers.

One study found health marketplace insurers in Tennessee denied between 8% and 23% of claims by in-network providers in 2017. That could be because providers didn't properly bill the insurers or used incorrect billing codes. Or perhaps the insurer disagreed with the provider about whether the service was medically necessary.

Still, patients are often asked to pay the disputed bills, even while insurers and providers try to negotiate the dispute. If they don't pay during that time, the debt often is turned over to collections.

Rather than pass consumer-helping health care legislation, our state lawmakers sent a bill to the governor that will in effect cap the amount of federal dollars, $7.5 billion currently, that pays for two thirds of state-provided health care.

Under Tennessee's current Medicaid and TennCare waiver with Washington, if the state's costs increase - for whatever reason - more enrollees, natural disaster injuries, pandemics, whatever - the federal government share will accordingly increase. But Republicans in government - state and federal - have long been so eager to undo anything in health care that might ever have been touched by "Obamacare" that they have practically chanted block grant, block grant, block grant. Thus Tennessee has now directed our governor to ask for federal permission to use a block grant, which will let the federal government off the hook for its guarantee of a continuing 2-1 match.

Tennessee has the seventh-fastest growing economy of any U.S. state, but we're ranked 41st worst in WalletHub's "best health care systems" list. Add to that: In a 2014 Kaiser Family Foundation study Tennessee was found to make the 13th lowest health care expenditure. And now we learn that we have a higher than national average number of Tennesseans whose medical debt is hurting their credit.

Go figure. Is it any wonder that Tennessee is one of the unhealthiest states in the nation, with more adult diabetes, poor mental health days, obese adults and low birth-weight babies?