Medicare and Medical Debt

Medicare is a life-saver for older Americans, but it does have out-of-pocket costs that can expose some patients to medical debt. A new issue brief created for HCFANY by the Medicare Rights Center explains some of the causes of medical debt for people enrolled in Medicare and describes some steps patients can take to avoid it.

Some of the causes of medical debt for people covered through Medicare are the same as for people with other types of insurance. More and more New Yorkers say they cannot afford to pay for care because of deductibles and out-of-pocket costs. This can be especially difficult for patients who are cannot afford supplemental coverage but are not low-income enough for Medicaid.

Like other patients, people with Medicare deal with medical billing errors and service denials. Patients who have had their care plan denied by insurers are then in a position where they have to ask their doctor for a different care plan; attempt to appeal, which can be overwhelming without help; or pay on their own. Finally, Medicare patients have to navigate covered versus non-covered services. Long-term care, dental care, and even ambulances can leave them on the hook for large medical bills.

Patients with Medicare coverage should review their Medicare Summary Notice to know what bills may be coming and whether any services they’ve received in the past three months were not covered. They can get help with billing questions, appealing service denials, or finding affordable care by calling the Medicare Rights Center at 800-333-4114.

New York State should also do more to protect patients from medical debt. One reason that medical errors are so common and that it is so hard for patients to know what services are covered by what providers is because the current health care system is so fragmented. A single-payer system, like the one that would be created by the New York Health Act, would eliminate the complexity that causes so much distress for patients in today’s system.

New York should also take steps to make medical billing more fair in the current system:

  • Funding consumer assistance programs,
  • Capping interest rates on medical debt judgments,
  • Barring providers from placing liens on patients’ homes or garnishing their wages,
  • Banning facility fees, and
  • Making the state’s hospital financial assistance policy easier to apply for.

By Anna Szilagyi, Outreach & Program Development Coordinator, Medicare Rights Center

In September 2020, the Centers for Medicare and Medicaid Services (CMS) launched Care Compare, a redesign of their previous health care compare sites on Medicare.gov. Care Compare streamlines eight separate sites into one tool that allows Medicare beneficiaries to compare doctors and clinicians, hospitals, nursing homes, home health services, hospice care, inpatient rehabilitation facilities, long-term care hospitals, and dialysis facilities.

People need information to find providers that are right for their needs – what can New York learn from Medicare’s Care Compare when designing its own tools?

New York State announced a similar project for 2020. The goal of NYHealthcareCompare is to help New Yorkers compare the cost and quality of health care procedures at hospitals and access educational resources designed to help consumers know their rights, including financial assistance options and what to do about a surprise bill. Medicare enrollees may not have the same need to compare provider prices (except for non-covered services such as dental) as those with other types of insurance, but they do have the same problems with receiving confusing medical bills, being improperly billed, identifying in-network managed care providers, making informed decisions about their care, and finding providers with the highest safety ratings. CMS’s redesign of Medicare’s compare tool can offer direction to New York State in its design of a consumer health care compare site aimed at increasing health care transparency.

At medicare.gov/care-compare, Medicare beneficiaries and their families and caregivers can search by zip code, provider type, and optional keywords to get information on providers and compare up to three at a time. Once someone has started a search, Care Compare includes a list view and a map view (excluding for home health and hospice providers). The one-stop Care Compare tool is easier to navigate than using a different site for each type of provider, and the tool includes descriptions of each provider type to assist consumers with their searches. Care Compare’s design is a significant improvement from Medicare’s previous provider compare tools. However, not all provider information is relevant to consumers, and information that is relevant is lacking in certain areas.

When searching for doctors and clinicians, beyond basic contact and specialty information, consumers can see whether a provider is “participating,” which is important in estimating their Medicare cost-sharing. Participating providers accept Medicare’s approved amount for health care services as full payment and cannot charge beneficiaries more for Medicare-covered services. However, consumers enrolled in Medicare Advantage Plans would still need to confirm whether a provider is in network for their specific plan to ensure the most affordable care. Additionally, not all doctors and clinicians listed have performance information available, which makes it difficult to accurately compare providers.

Similarly, when comparing nursing homes, the tool shows how many fines or citations the facility has for fire safety and inspections. However, if the nursing home has not had an inspection, then the facility does not appear to have any quality issues. The importance of consistency and transparency is particularly important when comparing nursing homes.

Fortunately, Care Compare does include educational information for consumers in the compare view. Below the side-by-side comparison of providers, the tool includes next steps and key questions to ask before visiting a provider or receiving a health care service or procedure. For instance, when comparing hospitals, the tool links to the Medicare resources “Steps to choosing a hospital,” “How Medicare covers inpatient hospital care,” and “How Medicare covers outpatient hospital care” to help consumers make more informed health care decisions. This is also an opportunity to increase education and access to resources in New York State, such as financial assistance programs and consumer assistance programs.

While working to increase health care transparency for consumers, user-friendly tools with meaningful and relevant information are critical. In creating and updating a health care compare tool for New Yorkers, New York State should meaningfully engage consumers to identify what information and features are valuable to them. Consumer testing and focus groups could help inform NYHealthcareCompare and ensure the site is responsive to consumers’ needs.


While building out NYHealthcareCompare, New York State should consider including:

  • Consistent and comprehensive quality measures to facilitate fair comparisons across health care providers. These measures should be clearly defined, so consumers understand how quality is assessed.
  • Streamlined information that is relevant and comprehensible to consumers, such as insurance plans a provider accepts.
  • Educational resources on questions consumers should ask before visiting a provider or receiving a health care service or procedure.
  • Information to redirect people with Medicare to the Care Compare tool for comparing health care providers.
  • Information on how to access financial assistance programs.
  • Promotion of consumer assistance programs to help people navigate health care options and costs.
  • A portal for consumer feedback and comments to inform updates to the site.
  • Clear accessibility information, such as options to view content in different languages and larger type.

Insurers offering products in New York’s individual, small group, and Medicare Advantage markets submit applications to the Department of Financial Services (DFS) each year which describes how premiums will change and why. DFS (and HCFANY!) encourage consumers to respond to these requests by share their experiences with DFS. How affordable do you think your current plan is? What would happen if your premiums went up as much as your insurer asks for? You can read HCFANY’s guidance for how to comment here, and submit your comments to DFS here.

Insurers have requested an average increase of 11.2% for 2022 on the individual market, which is very high given that consumers are still navigating the economic and health-related repercussions of the COVID-19 pandemic; in addition, insurers will likely continue to benefit financially from depressed utilization and the increased use of telehealth as a result of the pandemic. In some cases insurers didn’t give enough information about why they think premiums should increase. This isn’t fair to the public.

In our comments, HCFANY discussed many reasons why DFS should consider reducing the rate requests, including both market-wide conditions and specific factors in each insurer’s application. Find your carrier in the list below to see what we had to say!

In a recent survey, one-third of people who still haven’t been vaccinated against Covid-19 said fear of the cost is a factor. Federal law is very clear: no health care provider is allowed to bill any patient for the vaccine. But with a health care system that produces so many medical billing horror stories, it’s little wonder that patients don’t trust providers to follow the law.

Many patients trying to obtain preventive care like vaccinations or cancer screenings receive unexpected medical bills. The Affordable Care Act (ACA) prohibits cost-sharing for these services, and for good reason: regular preventive care helps people avoid or manage many chronic illnesses, gives them better outcomes for many types of cancer, and helps us control infectious diseases like flu and Covid-19 through vaccinations. But bills for preventive care still sneak through. One common issue arises when providers use the wrong billing code. If a service isn’t coded as protected preventive care, patients get charged. Patients then have to try and decipher what went wrong, even though the bills they receive are not required to include those codes or even explain what services are being charged for. Legislation proposed in New York State called the Patient Medical Debt Protection Act would have required providers to list all services being charged for in plain language on every medical bill but has failed to pass two years in row.

Facility fees are another way that patients end up with bills for preventive care. Facility fees are administrative charges not associated with any medical service. They are typically charged by hospitals. However, as hospitals purchase more outpatient medical offices, more patients get hit with facility fees outside of hospitals. Facility fees aren’t charges for any specific medical service, so the ACA’s prohibition on charging for preventive care doesn’t apply. (You can learn more about facility fees here and here.) Legislation that would have barred billing for facility fees after preventive care visits passed the New York Senate this session but failed to move in the Assembly. The bill also would have required providers to tell patients ahead of time that facility fees will be applied to their bill, giving them the chance to schedule appointments somewhere else.

Patients are so distrustful of our health care system that it is interfering with our ability to achieve public health goals. Patient protections such as those that prohibit cost-sharing for Covid-19 vaccinations can help. However they can’t solve the problem. Patients should only receive medical bills that clearly explain charges and be told ahead of time about fees that will be added to their bill no matter what care they receive. Health care providers and public health officials can educate the public about vaccinations and preventive health screenings, but it won’t convince patients who have learned from experience that the only way to avoid unaffordable medical bills is to avoid medical care whenever they can.