Many bankruptcies are a result of medical debt
Medical debt is the top cause of bankruptcy filings in the United States, more than mortgage debt or credit card debt.
People face financial difficulties for a variety of situations, from inflation to unemployment and other factors. One of the most difficult challenges Memphis residents may face when it comes to their money is that of medical debt. Over the years, the problem of affordable health care has been a topic of national debate. Even those who have insurance can struggle with medical debt. For people without any type of coverage, this problem can be crippling.
According to Governing Data, Tennessee ranks 26th out of a list comparing the states with the highest-costing hospital procedures. The price tag can vary widely between hospitals and from procedure to procedure. A visit to the emergency room can set a family back thousands of dollars. More complex procedures such as heart surgery can end up being many times more expensive. Therefore, an unexpected medical emergency can be devastating, whether people have insurance or not.
Number one cause of bankruptcies
Medical debt and other health care-related expenses are the top cause of bankruptcy filings, states CNBC, surpassing even credit card and mortgage debt. In fact, 2 million Americans in 2013 reportedly filed for bankruptcy as a result of insurmountable medical bills. Does having insurance protect against overwhelming debt? Unfortunately, many people’s insurance coverage comes with high deductibles and added costs that patients must pay out-of-pocket. Some medications or procedures are not covered by insurance at all.
In fact, states Fox Business, the majority of those who file for bankruptcy because of medical debt have health care insurance. One example includes a woman undergoing treatment for breast cancer. With her co-pays, travel expenses and other out-of-pocket costs, she says she is responsible for more than $8,500 each year. This amount does not even include the lost wages while dealing with her illness.
Those with medical debt can face additional hardships related to their medical expenses. These can include the following:
- Adding medical debt to existing credit card balances
- Being unable to afford basic living necessities such as rent, utilities and food
- Depleting savings accounts
- Needing to forgo necessary prescriptions and medical care in an attempt to prevent further debt, which can result in increased health problems later
Also, those with large amounts of medical debt on their credit cards often deal with high interest rates, which can further increase their debt and make it difficult to pay down their balance.
An attorney may help
Despite recent changes to medical coverage, countless people in Tennessee and across the country are still facing financial challenges that nobody should have to face. There are several ways that people in debt can take charge of their financial future. These may include credit counseling or filing for bankruptcy and getting a fresh start. Those who are drowning in debt should contact an experienced bankruptcy attorney to discuss their options.
Keywords: bankruptcy, Chapter 7, Chapter 13, debt