There is no disagreement that health care in America is expensive. If you suddenly have a serious injury or illness and need emergency care, that care could cost thousands upon thousands of dollars.
The Journal of the American Medical Association completed a study that found that medical debt in America was twice as high as it had expected, with around $140 billion in collections as of June 2020. The debt level was higher in states where people refused the Medicaid expansion.
Around 18% of all Americans have medical debt of some kind. That works out to around one in six people, so either you or someone you know may be struggling with medical debt.
Can insurance prevent medical bankruptcy?
The interesting thing about medical debt is that it affects both people who have insurance and those who do not. Though those with insurance may have less debt thanks to their coverage, the reality is that their deductible and out-of-network costs may still add up to thousands of dollars that they cannot afford to pay back.
Is bankruptcy the only method to handle medical debt?
Bankruptcy’s not the only way to handle your medical debt, but it is one way that is effective. Medical debts are not secured, so they are dischargeable in bankruptcy in most cases. Other options, like negotiating payment plans or lower rates for services, may also help patients move forward and eliminate the debt that is having such a negative impact on their lives. Chapter 7 and 13 bankruptcy are both possible solutions that could give people back their financial security.