Farmers and Ranchers Face the Consequences of Medical Debt

By Kristina Hubbard, Montana Rural Health Advocate for the Center for Rural Affairs

Patricia DeJong and her late husband, Dan, used to own a cattle ranch in Lincoln County, Montana, before losing it all to medical debt. Health insurance was unaffordable, and in 2000, while uninsured, Dan was diagnosed with Hodgkin's Lymphoma. Over the course of five years, their medical debt spiraled out of control and they made the heartbreaking decision to sell their family's fourth generation ranch. Dan died in 2006 with all of his medical bills paid, but with no land to pass on to his family.

A new report brief by the Access Project indicates that Patricia's story might not be unique. Who Has Medical Debt and What are the Consequences? shows that medical debt plagues nearly 20% of farmers and ranchers. The figures were compiled from a 2007 survey involving more than 2,000 family farmers and ranchers in seven Great Plains states.

The findings are troubling, and provide more evidence that our current health care system simply is not working for rural people. The report notes that the farmers and ranchers most at risk of accruing medical debt include people with lower incomes (under $40,000), poorer health status, lack of health insurance, and married people with children. And as other studies show, insurance does not necessarily protect people from medical debt. It's no surprise that the uninsured had higher rates of medical debt, but more than one in six farmers or ranchers who had health insurance also had medical debt. Clearly, extending health insurance to people uninsured will help, but the quality of health insurance is also important, and the insured with high out-of-pocket costs may still find health care unaffordable.

The report also concluded that people with medical debt are much more likely to draw down resources to pay for care (51%) and that health care costs contribute to financial problems (52%). In fact, among those with medical debt, nearly four in ten used up all of their savings to pay the bills; one in three took on additional credit card debt; and one in ten had taken out a loan or mortgage against their home. In many cases, people with medical debt had already used up savings or retirement funds before they went into debt.

And since people with medical debt spend almost twice as much out-of-pocket for health care as those without medical debt, they are more than twice as likely to delay care.

Ensuring affordable coverage for rural people depends on real choices and true competition in the health insurance marketplace, which makes the Senate Finance Committee's decision last week not to support a public insurance option especially disappointing. The Center for Rural Affairs' Why Rural America Needs a Public Health Insurance Plan Option explains why a public health insurance plan would help address rural insurance instability. For example, we found that public health insurance premiums would cost up to 30% less than private plans.

At a time when health care costs are crushing small businesses and dragging down rural economies, people like Patricia DeJong should not have to wait any longer for a solution that provides affordability and choice. We need reform this year. Make sure you remind your elected officials.

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