One Idahoan's debt woes mirror challenges faced by many college graduates

adutton@idahostatesman.comApril 7, 2013 

Except for a plan to live in his truck this summer, Brandon Prince is like many other 20- and 30-something Idahoans. He plays hard in the Idaho outdoors. He moved to Boise after college.

And like many of his peers, he's overwhelmed by debt, though not from a maxed-out credit card or a high-interest car loan. Prince owes more than $80,000 combined to student lenders and to St. Luke's Health System, for a culinary degree and an emergency hospital visit.

Prince, 35, is an example of what the rising costs of education and health care can lead to in a state where wages are stagnant and the percentage of workers covered by health insurance is falling. Two-thirds of Idaho college graduates now owe on student loans, with burdens averaging more than $24,000. About one in five Idahoans younger than 65 lacks any kind of health insurance.

That is leading to more student loan defaults, debt-collection lawsuits, and pleas for money from the state and county taxpayer-funded programs that were intended to cover catastrophic medical bills.

The debt isn't just carried by individuals who incur it, though - it's also borne by taxpayers. Unpaid medical debt becomes the responsibility of Idaho counties, the state and the federal government, whose health care payments and tax exemptions help support local hospitals so they can provide care to the uninsured. The federal government in many cases has agreed to pay a student loan if a graduate does not, and as a result is increasingly playing the role of debt collector.

The debt also burdens others in the economy. A graduate with debt payments is less likely to drop $50 at a local restaurant on a Saturday night. Instead, that person is likely - in as many as 40 percent of cases - to delay buying a home or even a new car when the clunker hits 150,000 miles. He or she waits to get married and moves in with parents or a roommate to save money.

Or, in Prince's case, he moves into a makeshift bedroom in the back of his truck, resigned to working until he dies, and crosses his fingers that he doesn't have another medical emergency.

ONE MAN'S STORY

The problems for Prince began when he enrolled in culinary school in Portland seven years ago and paid for it with student loans. After graduating, he moved to Boise in October 2007, seeking better job prospects. An Idaho native, he says he had missed his home state. But he couldn't find steady work as a chef. He works in a Boise store now, earning too little to pay off his student loans, which started at about $42,700 and now total about $61,000, thanks to interest and fees.

He started having pains last fall that felt an awful lot like the kidney stones he'd passed at St. Luke's Regional Medical Center more than 10 years ago. He went to the hospital's ER, where he learned he was suffering from kidney stones again - including one large enough to present a medical emergency.

After a CT scan, "a nurse came into my room with a tray of tools and a smile," he wrote later in a letter to St. Luke's. Prince was headed for surgery.

"I remembered the sign in the front room of the emergency room, the one that says, 'No one will be denied care on the basis of inability to pay.' I felt nervous, but reassured that I would be taken care of," he wrote. "I know very little about how hospitals and nonprofit organizations work, but I assumed part of their charter was to work on some sort of 'sliding-scale' for services, including charity care they could take as a tax credit. I work mostly part-time at a customer service job that pays $10 an hour. Surely, I thought, I fall somewhere on that sliding scale."

After a fairly complicated surgery to break up and remove the stones from one of his kidneys, Prince went home. His total bill, including a follow-up visit, was $26,104.36.

"I knew I didn't have the money to go to the hospital and did everything in my power to avoid going there, including putting myself at risk for complicated kidney disease," Prince wrote.

"I simply felt that if I endured long enough, the problem would right itself, and I would not have to ask for charity or forgiveness."

WHAT HAPPENS TO THE MEDICALLY INDIGENT

The hospital applied almost immediately for Medicaid on his behalf to the Idaho Department of Health and Welfare. The application was denied, so the hospital turned to the payer of last resort, the county's medically indigent fund.

Idaho counties and the state both cover medical bills for patients who aren't capable of paying them off over several years. That program is under a growing burden, according to state and county officials. It spent more than $55 million statewide in the last fiscal year on 6,491 cases like Prince's, according to a presentation to the Legislature's Joint Finance-Appropriations Committee.

Almost 60 percent of claims for catastrophic coverage were denied in fiscal 2011, because the person didn't qualify or for other reasons, according to the Idaho Association of Counties.

St. Luke's routinely files applications for uninsured, poor patients when their bills hit $8,000. If Prince's bills are covered through the program, St. Luke's will recoup about half of what it charged him and write off the rest as charity care, the health system's spokesman said. Ada County may then try to collect some of the money, placing a lien on property - in Prince's case, his truck - but "has not ever foreclosed on any of its liens that I'm aware of," said county spokeswoman Jessica Donald.

The county does set up a payment plan of at least $25 a month with no interest for patients who are required to repay the costs.

The governments get very little of that money back. Ada County's indigent services program recovered $573,000 for the county and $369,000 for the state catastrophic fund, up from $555,000 for the county and state in 2011 and $462,000 in 2010.

Prince makes a low enough income to qualify for Medicaid - but only under a federal expansion of the public health insurance program that would cover Idaho's low-income, childless men and women. A state-commissioned study found that Idaho would save $478 million in property taxes by covering people like Prince under a broader program financed mostly by the federal government. Leaders in the Idaho Legislature decided to pass on that expansion this year and keep the catastrophic-costs program for at least another year.

If his application for state and county assistance is denied, Prince would likely receive St. Luke's financial assistance or be put on a payment plan, said St. Luke's spokesman Ken Dey. The hospital isn't charging him interest at this point.

Meanwhile, Prince's student debt overshadows the average Idaho graduate's by tens of thousands of dollars. He's not sure he'll ever repay that debt, a blend of federal and private loans.

He says he feels like a distressed homeowner, thinking, "I can't solve it, so I'm just going to walk away from it."

He has already gone through bankruptcy - not to undo his student debt, which federal law prohibits, but to clear away other debts so paying his student loans would be easier.

When he got the bill for his St. Luke's care, he wondered whether he'd have to file for bankruptcy again. He hopes it won't come to that.

Prince also still has kidney stones that could present another medical crisis. He said he can't afford the tests and treatments that could keep the problem from reaching that point.

He is quick to praise everyone he interacted with at St. Luke's. He also isn't contesting how much he was charged. He says he just doesn't want to put taxpayers on the hook.

"The last thing I expect is pity," he wrote. "I know life's not fair. It was my damn kidney that made the stone. It's my fault and my responsibility. ... It's admittedly dramatic, but if curing me meant stripping freedom and happiness out of my life, I might as well have refused to sign the papers, pulled the IV out of my arm and walked out to sit on the sidewalk and wait for my kidney to fail."

Audrey Dutton: 377-6448

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