Medical debt is the leading cause of bankruptcy in the United States. Medical debt can accumulate in a number of ways, but most often it is due to a lack of adequate health insurance or unforeseen medical conditions and emergencies 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 pressing concern for millions of Americans, many of whom face overwhelming debt and no they know where to turn. .

Medical Debt Reasons

A recently cited study showed that 62% of households facing significant debt have medical debt as a large part of their problem. These debts come in the form of unexpected emergency room visits, which can be expensive even if a person has health insurance and prohibitively expensive if they don’t. They also come in the form of dental work, which is a separate type of insurance not usually covered by basic health plans. Dental work can easily run into thousands of dollars and is the type of work that, when it is needed, is absolutely necessary ASAP.

Another major factor in outstanding medical debt that makes people consider bankruptcy is out-of-pocket costs for prescription drugs. Prescription drugs can cost an arm and a leg, and are notoriously difficult to get covered by typical health insurance plans.

The health conditions that lead to skyrocketing debt are often related to obesity and the effects of age, and those suffering from such conditions and the associated debt are filing for bankruptcy at an increasing rate.

Another troubling statistic from the study is that households that already have medical debt are less likely to seek treatment when they need it, as they want to avoid further debt burdens and filing for bankruptcy.

Also, even after filing for bankruptcy, which can eliminate large chunks of unsecured debt, many people are afraid of new treatment, since they may still not have adequate insurance and cannot pay the new medical debt for a long time. several years. years after initial discharge.

1.7 million people will file for bankruptcy due to medical debt this year, the study estimates. Fortunately, the protections offered by filing for bankruptcy are strong and can clear most debts incurred by those who suffer from health problems or accidents, but the more important problem is that health problems and accidents are a fact of life. and it seems that something is happening. inherently wrong when a system fails to account for these realities in a meaningful way.