WEDNESDAY, Nov. 9, 2005 (HealthDay News) -- Americans who have trouble paying for medical care often have problems keeping a roof over their heads as well, a new survey reveals.

Among lower-income adults with medical debt, more than one-quarter (27 percent) said they had housing problems as a result of that debt. These problems included being unable to qualify for a mortgage or to make rent or mortgage payments, being turned down from renting a home, and being forced to move to less-expensive housing.

Some even said they had been evicted or were now homeless because of medical debt.

"We learned that our health insurance system is failing in many instances to fulfill its fundamental purpose: protecting American families from the catastrophic effects of large medical bills," said Robert W. Seifert, policy director of The Access Project, a national initiative to improve access to care for the uninsured.

Seifert's organization presented highlights of the report in a teleconference on Wednesday.

Medical debt is a fairly widespread problem affecting a large segment of the U.S. population, recent surveys suggest. A report from The Commonwealth Fund, for example, found that nearly two in five working-age adults -- an estimated 77 million people -- had a medical bill problem in the previous 12 months.

In an earlier Access Project survey, 46 percent of uninsured individuals in 18 states reported having unpaid bills or being in debt to the facility where they received care.

Danilo Pelletiere, research director at the National Low Income Housing Coalition in Washington, D.C., said the new study linking medical debt and housing problems rings true based on the coalition's own polling data.

In a poll of likely voters this June, the coalition found that 25 percent had difficulty paying their housing expenses in the past year, while 27 percent said their housing costs made it difficult to pay for health care, including medical insurance. Nineteen percent faced both problems.

"Whether it's a housing cost problem or medical problem, they're obviously interacting in a way that's putting people under pressure," Pelletiere said.

The Access Project surveyed nearly 1,700 low- and moderate-income taxpayers at seven income tax-assistance sites around the country. Nearly half of those surveyed (46 percent) reported having medical debt, posing a significant barrier to economic advancement in general and housing security in particular, the findings suggested.

Uninsured individuals were more likely than people with insurance to say that their debt led to a housing problem, the survey found. Still, one in five of those who were insured when they incurred their debt experienced housing problems, too.

People with larger bills were more likely to face a housing problem. Fifty-two percent of those with outstanding debts of $5,000 or more reported having a housing problem.

But even relatively small amounts of medical debt -- $500 or less -- can pose a hardship. One out of six respondents (16 percent) said that amount of debt had harmed their credit, and 12 percent with this amount of debt had housing problems.

"What looks like a small amount to you or I is not a small amount; it can be the straw that broke the camel's back for a lot of these people," Pelletiere said.

It is particularly problematic when the debt affects a person's credit standing. People whose debt appeared on their credit report were twice as likely to report housing problems as those who said the debt was not on their credit report.

"Often, people with medical bills are pressured to make payments and end up using their credit cards to make payments, in effect, exchanging the medical debt for long-term debt," said Jessica Cecere, president of the Consumer Credit Counseling Service of Palm Beach County and the Treasure Coast in West Palm Beach, Fla.

A possible remedy, the Access Project suggests, would be to prevent medical providers and their agents from reporting medical debt to credit agencies. It's only fair, they argued, since medical debt is one of the few types of debt that is acquired involuntary and essentially acts as a "sickness tax" on top of the bills themselves by damaging the person's credit.

"It surely cannot be anyone's intent to impose these burdens on people who simply seek services to meet their health-care needs," Seifert said.

More information

To view the Access Project report, click here.

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