Question: What is the number-one cause of bankruptcy in the United States? Is it buying luxury items we can’t afford such as the latest cellphones or televisions? Is it taking out private loans for expensive cars or vacation homes? Is it anything that a reasonable person would decide they don’t need?
Sadly, the number-one cause of bankruptcy in America is medical debt. Even with insurance, medical care is expensive. And one medical emergency could be costly enough to wipe out a savings account and max out credit cards. National statistics reveal that fully one-third of Americans have problems paying their medical bills. Among 62 percent of individuals who file for personal bankruptcy, medical debt is the triggering factor.
A group called the Patient Advocate Foundation provides services to help Americans manage their medical debt. More than 67 percent of their clients have health insurance. How can costs get so out of control even with the safety net of insurance?
No matter what your views on the Affordable Care Act (Obamacare) may be, the new law has certainly prompted public discussion and promoted greater awareness about the hidden costs of medical treatment. In hospitals and other medical facilities, there is seemingly no consistency about what different services cost. Sprains can be treated for as little as $4 or as much $24,110. Pricing without rhyme or reason is possible because there is no transparency and Americans don’t have the luxury of shopping around for their healthcare.
In light of how many Americans suffer financial ruin due to medical debt, this is a problem that needs and deserves a legislative solution. And in the meantime, these statistics are yet further proof that filing for bankruptcy is not an indicator of irresponsibility or laziness.
If you are concerned about your own medical debt or other financial burdens, you may wish to speak with an experienced bankruptcy attorney in order to better understand your rights and options.
Source: Roll Call, “Medical Debt: The New Norm for Patients in America: Commentary,” Nancy Davenport-Ennis,” April 30, 2014