Oklahoma among worst states for medical debt

De Alegria, whose downward spiral started with a workplace injury, is one of countless Oklahomans who have felt the burden of medical debt.

The state ranks among the worst in the country for unpaid medical bills, which are especially hard on the most vulnerable populations.

According to a recent Urban Institute report, almost 22% of Oklahoma residents have medical debt in collections. That’s the third highest rate nationally, trailing only South Carolina and West Virginia. In Oklahoma’s communities of color the number jumps to 32%.

As for the state’s two most populous counties, in Tulsa County, 19% of residents overall (32% communities of color) have medical debt in collections; in Oklahoma County, it’s 22% (35% communities of color).

Harmon and Greer counties in southwestern Oklahoma — at 42% and 39% of residents respectively — are tops in the state and rank in the top 10 nationally among counties for which numbers are available.

No one is more aware of the problem than the organizations that serve the state’s most vulnerable residents.

“At least once a day now I see someone who has an issue with medical debt. It seems to be becoming a bigger problem,” said Veronica Robles, case manager with Catholic Charities Emergency Assistance program in Tulsa.

“So often it’s coming on top of everything else they are already dealing with.”

Medical debt is also a common concern for client families of Green Country Habitat for Humanity, said Cameron Walker, president and CEO.

“Where we see its impact is not so much on the front end but after they own a home and are paying a mortgage,” said Walker, whose nonprofit helps lower-income families build their own homes.

Often, medical bills are part of a “bundle of debt” clients face, along with student loans, high interest car loans, etc., he said.

“Our families are on such a tight financial budget that they are often one major life event away from being completely knocked off the rails.”

When that event comes, it’s often medical.

“It’s no fault of the homeowners themselves,” he added. “It’s not a misallocation of funding. It’s simply a lack of excess funding.”

Oklahomans have not been idle in the face of the issue.

A recent Tulsa-based partnership with RIP Medical Debt, a national nonprofit, raised funds to help over 36,000 Oklahomans erase nearly $41 million in medical debt.

But how to keep families from accumulating that debt remains a problem with no obvious solution.

Leaders are hopeful that Medicaid expansion — which Oklahoma has passed, unlike some other states that rank high — will help.

Since it went into effect in July 2021, more than 300,000 Oklahomans have gained coverage.

It’s still too early for medical debt numbers to reflect any impact. But promisingly, the percentage of Oklahomans without insurance is on the decline, having dropped from 14.4% to 9.6% since Medicaid expansion, according to the Oklahoma Policy Institute.

De Alegria, who moved to Tulsa from Tucson in 2019, has always taken pride in working and providing for herself.

But almost overnight, her life in her new city was turned upside down.

She was injured on the job, and it led to three separate surgeries.

Now, though recovered overall, she has physical limitations that have left her unable to find work.

Making matters worse, De Alegria did not have health insurance at the time.

And so far, while still pending, efforts to pursue worker’s compensation and disability benefits have been frustrating.

The end result, she said, is a financial nightmare that includes thousands of dollars in medical debt.

Peter Chacon, emergency assistance manager for Catholic Charities of Eastern Oklahoma, says the organization tries to intervene before medical debt becomes a problem, helping households with insurance enrollment.

“The bigger issue behind unpaid medical bills is unpaid bills, period,” he said. “Clients have to choose between paying current bills for basic needs and insurance coverage for potential future medical bills. And they are choosing to service their most time-sensitive needs first.”

Clients without insurance are more likely to avoid preventive care, which in turns leads to much larger bills when care is eventually sought, he said.

The average cost of a three-day hospital stay is roughly $30,000 — “more than the full annual income of someone at or below the poverty line,” Chacon said.

“So for impoverished households it’s a matter of financial triage. A massive expense that there is no realistic way to pay off becomes the lowest priority for households struggling financially. Would you pay your $400 in savings toward a $30,000 medical bill and not make a dent or buy a new set of tires to drive to work? Or pay your utility bills?”

The issue of medical debt wasn’t the only reason, but it was definitely a factor in Green Country Habitat’s becoming a HUD-approved homeowner counseling agency, Walker said.

“We wanted additional tools at our disposal to assist clients with their debt,” said Walker, whose organization has built 100 homes in the last 22 months, most of them serving people of color in north Tulsa.

Walker said over 50% of the organization’s client households have a single head, in most cases a single mother.

A recent situation for one of them, he said, has become all too common.

“We have a household with a single mother who has a child that’s dealing with a major illness. She’s had to miss work, and with the out-of-pocket medical expenses she has fallen behind on the mortgage payments.”

Habitat has been able to intervene on behalf of clients in many mortgage cases, Walker said.

“We can kind of jump in and be that intermediary between the bank and the family, and we can usually work with them, either modifying or buying some time,” he said.

“But I can tell you from experience, a lot of families panic. They’re dealing with all these things, maybe a child in the hospital. They’re fearful. So they they don’t reach out to us, and everything just snowballs.”

Medical debt is often a factor and an added stressor. And the picture for clients isn’t getting any better with the current inflation.

“We are dealing with increased fuel costs, increased groceries, increased energy costs,” Walker said.

“It’s a real problem, and we’re really scrambling right now to talk with funders and people in the philanthropic community.”

While her future remains uncertain, De Alegria is grateful for the philanthropic spirit she has encountered in Tulsa.

It starts with Robles and Catholic Charities, who’ve continued to be there for her, providing her with food and various services.

“They’ve done so much for me,” she said.

If not for the help of the charity and the family members who took her in, she’s afraid to think of what might’ve happened.

“I’d probably be under a bridge,” she said.

“It’s just so hard to think about, how all this could happen to me.”

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