Causes of Medical Bankruptcy

Causes of Medical Bankruptcy

Doctor with blue latex gloves counting hundred dollar bills in a hospital

Medical bankruptcy is still a common issue despite the Affordable Care Act, according to an article published by the American Journal of Public Health March 2019. The implementation of Obamacare did not necessarily result in affordable health insurance coverage and too often, individuals and families choose to go uninsured as they do not think they can afford coverage.

A study based on the Commonwealth Fund Biennial Health Insurance Survey reveals that an estimated 77 million (7 percent) Americans aged 19 and older have difficulty paying medical bills, have accrued medical debt or both.

In surveys conducted by researchers with the Consumer Bankruptcy Project, a majority of recently bankrupt debtors implicated medical bills or illness-related work loss as causes of their bankruptcy. Medical bills are considered unsecured debt and therefore can be wiped out by filing bankruptcy, just as credit card debt. A Harvard study completed by Elizabeth Warren said 62.1 percent of all bankruptcies were because of medical bills.

A 2015 poll done by NPR, Robert Wood Johnson Foundation, and the Harvard T.H. Chan School of Public Health found that 7% of respondents declared medical bankruptcy due to their health care costs over the previous two-year period.

As the cost for medical care continues to rise, more and more Americans are unable to climb out of financial debt when a medical tragedy hits. Other contributors to medical bankruptcy include demographics, stagnant incomes, major medical diagnoses, lack of access to care resulting in more complicated illnesses, and disease. While there are companies that are dedicated to helping people file medical bankruptcy, the best way to avoid it is to prevent and manage diseases with routine healthcare exams.

About 1 in 10 adults delay medical care due to cost. Dental care, prescription drugs, and eyeglasses are the first things people give up because of health costs according to the National Bankruptcy Forum.

It is important to have the right healthcare coverage to avoid becoming one of these statistics. American Online Benefits Group offers products that will help with out-of-pocket expenses when it comes to dental, vision, hospital care, prescriptions, air transport and much more. Please contact our agent or member services to receive more information at 214-389-9072.

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