The “deductible season” dilemma: Do patients really need to pay those overdue bills?

A recent Reddit thread on r/HealthInsurance began with a blunt question: “As of January 2025, there will no longer be any credit reports for medical debt of any amount. Why should I pay any more for medical bills?”

Others echoed the sentiment, questioning why they should pay the bill once it arrives.

There's nothing new about patients delaying or avoiding paying medical bills, but as patient balances become a larger portion of revenue and the incentive to pay becomes weaker, it's increasingly difficult for providers to absorb the impact.

Since credit reporting agencies no longer track most medical debt, sites like Reddit are awash with advice on how to avoid collections. These conversations are now generated by generative AI tools like ChatGPT and Claude, which return the same suggestions to users seeking answers.

Healthcare consumers are not necessarily wrong to ask these questions. Credit reporting rules change throughout the year. Medical debt under $500 is no longer reported to the credit bureaus, although a federal court in July struck down a rule that would not have allowed medical debt to appear on credit reports. But just because some medical debt doesn't show up on a credit report doesn't mean a patient no longer owes it. It just means that the provider's practices need to change the billing experience.

This need conflicts with the healthcare industry's most economically difficult time of year: deductible season, when deductibles reset and patients pay the most out of pocket.

Every January, millions of Americans start paying their insurance deductibles again, suddenly facing hundreds or thousands of dollars out of pocket. These amounts are increasing and continue to increase as high-deductible health plans become more common. According to the U.S. Bureau of Labor Statistics, 51% of Americans with private insurance are enrolled in private insurance as of 2023. For billing teams, this means a surge in patient issues, payment plans, and past-due balances. Inbox Health data shows that health care organizations collected the highest total amounts in February and the highest total amounts in March, illustrating how tumultuous the first few months of the year have been.

This year’s deductible season looks particularly challenging.

Changes in credit reporting rules remove one of providers' most effective deterrents to non-payment. That alone is enough to cause unrest, but additional regulatory changes have complicated the situation, leaving many patients unsure of what their insurance actually covers. Telehealth visits have been nearly universally reimbursed during the pandemic. Now, a lot of people are not. Patients who log in for a video visit may not realize their plan no longer covers the service until after the bill arrives. Meanwhile, millions of people who lost Medicaid during the redetermination are still finding their safety net gone.

All of this creates a fog of misunderstanding that manifests itself in the billing office as phone calls, frustration, and unpaid balances. Before paying, patients want to know: Does my insurance actually cover anything? Is this encoding correct? Am I being double billed? When they can't get an answer quickly, they often don't pay at all.

How Provider Practices Can Make Up Lost Ground

Providers must now compete on communication: how clearly they explain fees, how quickly they respond, and how effectively they build trust with every interaction.

Easier said than done. Many clinics are already understaffed and stretched thin. A billing representative spends much of an average January answering voicemails, explaining deductibles and processing payment plans. Even the most diligent team cannot respond to every patient in real time.

Conversational AI “Enter Chat” fills this gap. AI-enabled billing platforms can now instantly and accurately answer patients’ most common questions: Why is my balance higher than normal? Can I break this into smaller payments? Patients receive clear, easy-to-understand explanations whenever they need them, not just during office hours.

When patients understand their bills, they are more likely to pay them. The goal is not to be more aggressive in pursuing due fees, but to meet with patients more effectively and gain a clear understanding of the communication channels they actually use.

The data already shows where the future is headed. Patient liability currently accounts for about one-fifth of clinic revenue, and collection rates are declining year over year. The methods of the past—paper statements, call centers, third-party collectors—belonged to an era when insurance covered most of a provider's revenue.

In today's complex and evolving billing environment, transparency and convenience are more than just nice to have. For most providers, they are a prerequisite for financial sustainability. When people question not only their own bills, but also the institution that sends them, trust is the most important currency. This trust comes from experience. When patients can get clear, quick answers to what they are owed and understand the context of their bill, it builds their confidence that their doctor has their best interests at heart. The better the payment experience, the more patients trust that what they pay is fair.

Much of this is reflected in patients' online behavior; they are not trying to game the system but learn how to navigate it. They ask fair questions to Reddit and ChatGPT because they are the only sources that provide quick, simple language answers. Providers who respond with clarity, empathy, and speed will not only receive more reliable compensation, but also retain something more valuable: the fragile trust that underpins every part of the care experience.

Patients should feel confident that they are being treated fairly. This assurance and the trust it creates will remain a provider’s most effective collection tool.

Photo: KLH49, Getty Images

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