Medical debt is the leading cause of bankruptcy filings in the United States. Medical debt can be accumulated in a variety of ways, but it is usually due to a lack of proper health insurance or unforeseen medical conditions and emergencies that are not adequately covered by insurance policies. With the advent of the Affordable Care Act, many people hope that this trend will not continue, but right now it remains a very real and urgent concern for millions of Americans, many of whom are faced with overwhelming debt and don’t know where to turn . .
Reasons for medical debt
A recent survey showed that 62% of highly indebted households cited medical debt as a major part of their problem. These debts come in the form of unexpected emergency room visits, which can be expensive even if someone has health insurance, and prohibitively expensive if the person doesn’t have it. They also come in the form of dental work, which is a separate type of insurance generally not covered by basic health plans. Dental work can easily run into the thousands of dollars and is the type of work that, if needed, is absolutely necessary as soon as possible.
Another big factor in outstanding medical debt that makes people think about filing for bankruptcy is the out-of-pocket cost of prescription drugs. Prescription drugs can cost an arm and a leg and are notoriously difficult to cover under typical health insurance policies.
Health problems that lead to skyrocketing debt are generally related to obesity and the effects of old age, and those suffering from such conditions and the associated debts are increasingly filing for bankruptcy.
Another disturbing statistic in the study is that households already saddled with medical debt are less likely to seek treatment when needed as they want to avoid further debt and file for bankruptcy.
In addition, many people are afraid of undergoing new treatment even after filing for bankruptcy, which can eliminate huge chunks of unsecured debt, as they probably still don’t have proper insurance and won’t be able to afford new medical debt. pay for several years. years after the first discharge.
1.7 million people will file for bankruptcy this year due to medical debt, the study estimates. Fortunately, the protections offered by filing for bankruptcy are strong and can pay off most debts incurred by people suffering from ill health or accidents – but the bigger problem is that ill health and accidents are a reality of life. are, and it feels like something is inherently wrong when a system fails to account for these realities in a meaningful way.
Medical Debt No. 1 Cause of Bankruptcy Filing
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