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Medical Debt For Rural Americans

posted by Katie Porter

A recent study conducted by the Access Project reports on the sizeable medical debts facing rural Americans. A survey asked Kansas farmers to report on their medical bills to doctors, hopsitals, dentists, and pharmacies. Although 95% of the farmers and their families had some form of health insurance, approximately 1 in 6 families had outstanding medical debts. The median amount of medical debt among those who had overdue bills was $2,500.

These data align with my empirical research about rural Americans who file bankruptcy. My principal finding was that rural debtors are in terrible shape, with very high debts and very low incomes when they file bankruptcy. Their situations are worse even those of debtors living in urban areas, the demographic studied in most empirical work.  As I wrote in Going Broke the Hard Way: The Economics of Rural Failure, 2005 Wisc. L. Rev. 969, 1015-1018, rural families were significantly more likely than urban families to have faced large out-of-pocket medical bills before bankruptcy. This was true despite identical rates of insurance among the two samples of debtors. I hypothesized that this disparity resulted from differences in the quality and scope of the health insurance, and noted that at least one author had concluded that rural people were less likely to have employer-provided insurance, which is often more protective than the high-deductible or catastrophic policies that are affordable to those who cannot purchase group coverage. The Kansas farmers fit this model, although note that my sample contained almost exclusively non-farming rural citizens.

To the extent rural America is home to more self-employed people, more low-wage workers, and more people working for small companies, the percentage of those having to settle for high-deductible, limited-coverage health policies for cost reasons is likely to be higher. And as co-bloggers Melissa Jacoby, Elizabeth Warren, and Debb Thorne have observed, the quality of health insurance can be as important as the presence of insurance in preventing overwhelming medical bills. Medical debt is just one more way that rural Americans are particularly vulnerable to financial collapse.


Katie, could people in rural communities have to go out of network more often because of limited access to specialists, etc.? I noticed that on the cheapest (and most popular) plan offered by my university, many counties in Illinois were excluded, particularly Cook County, where I would assume many medical specialists and experts in the field practice.

Christine-- I suspect that could be part of the story about health care costs for rural Americans. Another problem is that their isolation makes it difficult for employers to join HMOs that typically offer lower deductibles and lower out-of-pocket costs.

Of course access to health care--not just the affordability of it--is a major problem for rural America, particularly in the more geographically isolated regions. I know that the University of Iowa Hospitals and Clinics are working to train and place nurse practitioners in small rural communities because these places often cannot attract doctors--despite offering substantial financial incentives to those willing to practice there.

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