Medical care is considered a necessity, a basic cost of living, in the same way that food, clothing and shelter are consider basic needs. Unfortunately, medical care can be very costly, especially those who are still without insurance or who have high premiums and high deductibles. As many Americans have learned from difficult experience, though, even insurance doesn’t guarantee protection against financial ruin induced by medical bills.
According to a recent poll conducted in Florida, 76 percent of those who claimed to have had serious financial difficulty in the past two years also had health insurance. The limitations of polling notwithstanding, this is telling, though probably not surprising to many.
The costs of medical debt are more than just the medical bills, too. There is also the impact unpaid medical debt has on a patient’s credit. Unpaid medical debt is typically transferred to debt collectors very quickly, and shows up on a debtor’s credit report. According to the Consumer Financial Protection Bureau, about 20 percent of Americans have medical debt on their credit reports.
Then there is the contribution of medical debt toward bankruptcy. According to recent polls, 7 percent of Americans say medical debt has contributed to their decision to file for bankruptcy. Among Americans who file for bankruptcy, mention of medical debt is undoubtedly significantly higher since medical debt is well known to be one of the most common reasons debtors file for bankruptcy.
In our next post, we’ll continue looking at the topic of medical debt and bankruptcy.