Medical debt plagues countless Americans and often leads to financial distress and, in some cases, bankruptcy. The financial burden of health care expenses can be overwhelming. Many individuals and families find themselves in dire straits due to their inability to manage these costs.
The number of Americans struggling to stay on top of their medical bills has grown so much that medical debt is now one of the leading causes of bankruptcy filings across the nation.
What drives medical debt
The rising cost of health care services in the United States contributes to the problem. People often have to contend with exorbitant bills for surgeries, hospital stays, medications and treatments. Even those with insurance can face substantial out-of-pocket expenses, leading to financial strain.
Inadequate health insurance coverage is another major factor driving medical debt to bankruptcy levels. High deductibles and copayments can make it difficult for individuals to afford necessary medical care. Sometimes, people may even forego essential treatments or medications due to the fear of incurring further debt.
How bankruptcy might help
For many Americans, the burden of medical debt becomes insurmountable. Bankruptcy can offer a potential avenue for individuals burdened by overwhelming medical debt to find relief from their financial woes. Filing for bankruptcy allows individuals to either discharge or restructure their debts, including medical bills. In Chapter 7 bankruptcy, unsecured medical debts often undergo discharge, providing a clean slate for the debtor. In Chapter 13 bankruptcy, a repayment plan enables individuals to make manageable, structured payments over a specific period. This potentially reduces the financial strain caused by medical debt.
Estimates suggest that about 40% of bankruptcy filings in America arise because of medical debt. This indicates that policymakers and healthcare providers must do more to help people access the medical care they need without the threat of financial ruin.