Updated: Jul 28
It is a common problem that affects millions of Americans every year. According to a recent survey, medical bills are the leading cause of bankruptcy in the United States, accounting for approximately 62% of all bankruptcies.
One of the primary ways in which medical debt affects individuals is by putting a strain on their finances. Even those who have health insurance can be burdened with high medical bills, as insurance plans often have high deductibles and co-payments. In fact, a recent study found that one in four insured Americans struggled to pay their medical bills, with the average medical debt being $2,000.
Medical debt can also affect an individual's credit score, making it difficult to obtain loans or credit cards in the future. Medical bills that are left unpaid can be sent to collections agencies, which can negatively impact an individual's credit score. In fact, according to the Consumer Financial Protection Bureau, medical debt accounts for over half of all collections accounts on credit reports.
Furthermore, medical debt can take a toll on an individual's mental health. The stress and anxiety of dealing with mounting medical bills can lead to depression and other mental health issues. This can be particularly challenging for individuals who are already dealing with the physical and emotional toll of a medical condition.
The impact of medical debt is particularly pronounced for low-income households and communities of color. According to a report by the Urban Institute, 35% of non-elderly adults with incomes below 200% of the federal poverty level had medical debt in 2018, compared to only 14% of those with incomes above 400% of the poverty level. Similarly, a study by the Commonwealth Fund found that people of color were more likely to have medical debt than white individuals, with Hispanic and Black adults being nearly twice as likely to have medical debt than white adults.
The consequences of medical debt can be long-lasting and far-reaching. In addition to financial and emotional stress, medical debt can also lead to delays in seeking medical care, which can have serious health consequences. It is therefore important to take steps to address and manage medical debt.
There are several ways in which individuals can manage medical debt, including negotiating payment plans with healthcare providers and hospitals, applying for financial assistance programs, and seeking help from credit counseling services. Additionally, policymakers can take steps to address the issue of medical debt, such as implementing policies to reduce healthcare costs and expanding access to affordable healthcare.
Medical debt is a significant problem that affects millions of Americans every year. It can have a range of negative consequences, including financial strain, damage to credit scores, and mental health issues. It is important for individuals and policymakers alike to take steps to address and manage medical debt in order to improve the health and well-being.