Patient ‘Out-of-Pocket’ Costs Soar as Available Credit Declines, TransUnion Says

“Out-of-pocket” medical costs are surging, while available credit for these consumers is declining, according to the latest TransUnion Healthcare Report.
Healthcare costs that have to be paid by consumers — not covered by insurance — jumped more than 25 percent in the first half of 2013, TransUnion found. And that percentage likely will increase further in the next year.
While out-of-pocket costs (average patient payment responsibility) on key medical procedures continued to grow at a faster rate, the available revolving credit for consumers declined nearly $1,000 in the last year.
Average patient payment costs increased nearly 38 percent in the past year, from $1,862 in Q2 2012 to $2,568 in Q2 2013.
Since the beginning of 2013, patient payment costs have risen more than $500 ($2,042 in Q4 2012).
At the same time, the average consumer’s total revolving credit lines, such as those on bank-issued credit cards, store credit cards and home equity loans, has dropped from $34,855 in Q2 2012 to $33,884 in Q2 2013.
TransUnion reviewed anonymous data estimates from 200 hospitals across the nation, focusing on patient payment responsibilities for common procedures, including major joint replacement, cesarean section and natural birth deliveries.
That information was then compared with financial data gathered from TransUnion’s proprietary Industry Insights Report. Issued bi-annually, the TransUnion Healthcare Report examines available revolving credit as an indicator on how consumers might cover out-of-pocket costs.
“The trend of growing consumer healthcare costs continued during the first six months of the year, and we suspect they may expand even more with the recent one-year grace period granted to some insurers for out-of-pocket expenses,” said Milton Silva-Craig, president of TransUnion Healthcare.
As a result of this extension, patients expecting to pay no more than the Affordable Care Act’s (Obamacare’s) prescribed cap for out-of-pocket expenses may find that they owe both the maximum amount for hospital services and an additional maximum amount for prescription drugs, Silva-Craig said.
These added costs will make it more difficult for patients to pay their bills.
On a positive note, consumers continue to better manage their revolving debt balances. Average revolving debt dropped for the seventh straight quarter to $11,943 in Q2 2013, down almost 6 percent from the second quarter of 2012.
Subprime consumers also saw their average revolving balances drop, declining 10 percent in the last year to $8,317 in the second quarter of 2013.

J. Lipsky

Hello, I am John, born in Cedar Rapids, but lived a lot of years in Latin America. I am an economist and have specialized in credit and debt. Originally sovereign debt, but later on, in credit score management and debt consolidation. I write for many publications. Here in eCreditDaily, I write about credit, second chance banking, and debt. I also write for other websites and bulletins about inflation and country risk.

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