The $140 billion the New York Times says Americans owe in medical debt is just the tip of the iceberg.

The number doesn’t even include the billions we’re putting on our credit cards to pay for health care because of insurance deductibles we can’t possibly meet.

The New York Times is reporting that the amount Americans owe in medical debt is much bigger than previously thought. Citing research published Tuesday in JAMA, Sarah Kliff and Margot Sanger-Katz wrote that collection agencies held $140 billion in unpaid medical bills in 2020--far more than the $81 million researchers estimated in 2016. 

As bad as that is, the reality is that the total is much, much higher than $140 billion. As the reporters noted, that amount doesn’t include anywhere close to all the medical bills Americans owe, just the debts that have been sold to collection agencies. Not counted in that total are the medical bills patients are putting on their credit cards and trying to pay off. Undoubtedly, many of those patients will never pay them off.

Another crucially important fact the Times story does not mention is that much of Americans’ medical debt--maybe more than half of it--is owed not by the uninsured but by people who have health insurance. 

To meet Wall Street’s profit expectations, insurance companies like the ones I used to work for keep jacking up the amount Americans have to pay out of their own pockets before their coverage kicks in. It is not at all uncommon for patients in this country to have to pay thousands of dollars in deductibles, copayments and coinsurance every year. That’s in addition to the premiums they have to pay to get the coverage in the first place.

Sarah Gantz of The Philadelphia Inquirer is one of the relatively few reporters covering this growing crisis. In late 2019, she told the story of Sharon Kelly, a breast cancer survivor who had stopped going to the doctor--even though she had insurance--for fear of adding to her debt she already owes.

“It kind of paralyzes you,” said Gantz, who paid nearly $7,000 a year in premiums alone in 2019. ”I started thinking, ‘What if I just don’t have insurance.”

She added: “Medical debt is a very quiet and insidious kind of debt. It just starts coming from all different places. … It doesn’t hit you until you’re at the height of it.”

Kelly is like millions of other Americans with health insurance who give little thought to the actual value and usefulness of their policies. As Gantz wrote, Kelly had always been healthy and rarely used her health insurance plan--and didn’t give much thought to the deductibles she’d have to pay if she got sick. 

That’s the way it is with high-deductible plans. People in these plans, which are now prevalent in the US, mistakenly think their coverage is adequate and will protect them from financial ruin. That can be an incredibly costly and even deadly mistake. 

Gantz reported that in Pennsylvania, even people with coverage through their employers paid for about 14% of their health costs out of pocket in 2019. It’s even worse for people who have to buy coverage on their own, including from the health insurance marketplace established by the Affordable Care Act as Kelly did. People enrolled in those plans paid 22% of their medical costs out of their own pockets, according to the Health Care Cost Institute. 

That is consistent with the findings of the Commonwealth Fund, which has been tracking the rapid growth of Americans who are underinsured because of high out-of-pocket requirements. The Commonwealth Fund’s most recent research found that more than 40% of people with individual plans and more than a quarter of people with employer-sponsored coverage are now underinsured and consequently unprepared for a serious diagnosis or accident. An alarming 43.4% of adults between the ages of 19-64 are now inadequately insured. 

“It’s almost like you’re sitting on a time bomb,” Gantz quoted Sara Collins of the Commonwealth Fund as saying. “You have this high-deductible plan you may not use much, but if you do get sick, you can end up with a lot of out-of-pocket costs.”

In Kelly’s case, she learned from a routine mammogram that she had cancer when she was halfway through the calendar year. She had no choice but to pay her deductible over the remainder of the year. And then, as Gantz reported, “January came, and her deductible bounced back up to $7,000. Her treatment continued, as did the bills.”

Because of those bills, Kelly decided not to undergo chemotherapy as her doctors advised. She also has put off going back to the doctor.

She’s far from being alone. An untold number of Americans are gambling with their lives because of their high-deductible plans, not going to the doctor when they should and, increasingly, not even picking up their prescriptions. The ACA established a ceiling for out-of-pockets, but that ceiling is ridiculously high and increases every year. In 2021, many Americans with insurance will have to pay $8,550 before their coverage kicks in. If they have a family policy, the out-of-pocket maximum is now $17,100.

It can be just as bad if not worse for Medicare beneficiaries. People in Medicare Advantage plans, operated by private insurers, can also be on the hook for thousands of dollars in out-of-pockets. And, incredibly, there is no cap on out-of-pockets for people enrolled in the traditional Medicare program. 

Addressing this growing problem must become a priority of the Biden White House and Congress. The president is understandably proud and protective of the ACA, but just getting more people enrolled in health plans and increasing premium subsidies are not nearly enough and will not be helpful to the millions of middle-class Americans in high-deductible plans. 

Ezekiel Emanuel, who helped write the ACA, told the Times on the 10th anniversary of the law last year that not anticipating the growth and consequences of ever-rising out-of-pocket requirements was “a huge mistake.”

It is time for Congress and the Biden administration to fix that huge mistake. Several patient advocacy, business and provider organizations are coming together to put pressure on them to do that. Stay tuned for details.