Medical Bankruptcy Is On The Rise
Currently, the number one cause of bankruptcy in the U.S. is due to unpaid medical bills accounting for three out of five bankruptcies. The amount of medical bankruptcies continues to rise as they outnumber other financial issues causing bankruptcy such as credit card bills or unpaid mortgages.
Even for American adults with health insurance, greater than 20% are struggling to pay their medical bills. Problems paying hospital bills are common for all Americans including middle class families and it is estimated that 1.7 million households will file for bankruptcy this year due to medical bills. It is unclear whether new healthcare policies like the Affordable Care Act will resolve this problem as many families who have insurance coverage still are unable to pay their bills.
Struggling With Medical Bills
The majority of those struggling with their healthcare bills are middle-aged persons in family households. When illness strikes these groups they are completely overwhelmed and struggle to pay their medical billing costs even with the help of insurance coverage. . Those with high deductible insurance plans find that their out-of-pocket costs are more than they are able to pay. With a maximum out-of-pocket cost of $5,000 to $10,000 for these higher deductible plans, a serious illness could mean falling behind on bills very quickly.
Some families have so much trouble with medical costs that an estimated 25 million Americans are avoiding taking medication to save money. These people are either skipping doses, taking less medication than they are prescribed or delaying refilling their medication due to financial concerns. This statistic has people involved in the study concerned as this type of behavior can lead to more health problems in the long run.
Filing For Bankruptcy
These studies can make the concept behind the Affordable Care Act appear ineffective as it offers the goal of every American to have health insurance coverage. However, many of the families who are either filing for bankruptcy or are losing most of their income due to medical bills already have full year round health coverage that is not helping to pay their medical bills.
With high out-of-pocket costs, Americans often turn to credit card use to cover their healthcare bills which only adds to their debt and continues the problem. As the debt piles on, the cycle can lead to Americans depleting their savings or like 10 million people in U.S. an inability to pay for basic necessities like food and rent.
Expensive Medical Bills
Expensive medical bills become an insurmountable problem as credit card debt and collection agencies make it even harder to cover the cost of health billing. Those with unpaid medical bills on their credit card will receive a lower crediting rating and must pay higher interest rates as a result of their debt.
Over 35 million Americans will be contacted by collection agencies for their unpaid medical bills. In some circumstances, those unable to pay their bills will have their wages garnished to cover the debt which is often what leads to bankruptcy and even losing their homes.
High Cost Of Medical Bills
With the high cost of medical bills, many Americans find themselves losing their savings and declaring bankruptcy when they are faced with a serious illness. Insurance coverage does not always mean that an individual or family will be able to cover the cost of their medical bills as they still struggle to pay off their debt.
Some even suffer enough financially that they cannot afford to pay rent, utilities or buy food and avoid taking necessary medication for their illness. These alarming statistics reveal the problem with health care is not lack of insurance coverage but overwhelmingly expensive medical costs that are beyond an average middle class family’s ability to pay.Tags: bankruptcy