This morning, as I was catching up on the latest in the Medicare/prescription drug debate working its way through the House/Senate conference committee, I noted a peculiar sentence buried in the very last paragraph in this NYTimes article on the Republican's attempts to add co-pays to home healthcare and laboratory tests:
In many cases, Mr. Mertz said, the cost of trying to collect the co-payments would exceed the amount collected. For the 100 most common tests, he said, the co-payment would average less than $2.50 a test.
The House Republicans who sponsored the copays argue that they will cut down on the frivolous use of home care and unnecessary lab tests.
Now, putting aside how irrational the logic of saving money by cutting back on less expensive at-home care and early detection testing, I was cynically struck by the non-medical fallout of transferring a greater share of medical costs onto the elderly and disabled, many on fixed incomes and thus the least likely to be able to afford such shifts. Medicare members already shell out copays for doctor visits, hospital services, equipment rental, etc. As costs increase and beneficiaries become squeezed, more and more of these copays end up as delinquent debt, and is passed off to collection agencies at a significantly reduced rate.
Now, do our elected legislators actually take into consideration the possibility that increasing out-of-pocket expenses will lead to extra business for collection agencies? Well, apparently the credit agencies think so, as they shelled out 17 million dollars in campaign contributions in 2000 and 2002, 2 to 1 to Republicans. Granted, debt collectors are also looking to Congressional Republicans to tighten personal bankruptcy laws (in period of high economic pain) and loosen restrictions on collection tactics. But collection and credit companies have made strange alliances in the past, including battling against restrictions on high pressure telemarketers.
The bottom line: The more debt foisted upon those who can least afford it, delinquency, the lifeblood of the collection sector, increases exponentially. The good news, as witnessed by last months jump in employment in the industry, is that it's one of the few areas of real job growth in the recent "recovery".