Modern hospitals can offer care that people may only have dreamed of a few decades ago. Unfortunately, that higher standard of care comes with substantially higher costs.
Every year, millions of Americans require care that their insurance does not fully cover, leaving them with huge amounts of medical. Now, according to financial analysts, half of all American households have medical debt that they must repay.
That burden contributes substantially to the number of households that eventually file for personal bankruptcy.
The number of households with medical debt is on the rise
Rising treatment costs are among the reasons that medical debt has begun to impact such a large portion of American households. However, the costs passed on to patients from health insurance providers are also part of the issue. Some people have five-figure deductibles on their policies. Others may have to pay 30% in coinsurance, meaning that they have to pay 30% of the cost for their care out-of-pocket.
According to an analysis of finances in American households, 50% of all households have some degree of medical debt, which is a 4% increase from 2020. Of those in medical debt, 57% owed more than $1,000. Although researchers did note that fewer individuals were experiencing aggressive collection activity for those debts in 2021 as opposed to 2020, it is still quite clear that medical debt is a major issue for modern American households.
Medical creditors are often ruthless
Just because the business provides medical services and prides itself on compassionate care does not mean they take a compassionate attitude toward those who fall behind on paying their bills. The sad truth is that hospitals and medical care providers will aggressively attempt to collect on debts.
They may sell the debt to third-party collectors that engage in the borderline harassment of debtors. They may also seek a lien against someone’s personal property or even against any personal injury award they secure in civil court.
If you don’t address the medical debt, it could drag down your credit score, but repaying a large amount owed on life-saving care may not be realistic for you right now. Filing personal bankruptcy can be a way for a household unable to pay its monthly expenses and manage its medical debt.