Medical debt is the leading cause of bankruptcy in the United States. Medical debt can accumulate in a variety of ways, but most often it is due to a lack of adequate health insurance or unforeseen medical conditions and emergencies that are not adequately covered by insurance policies. With the advent of the Affordable Care Act, many people hope this trend will not continue, but right now it remains a very real and pressing concern for millions of Americans, many of whom face overwhelming debt and don’t know where to go .

Reasons for medical debt

A recent study cited showed that 62% of households facing significant debt have medical debt as a large part of their problem. These debts come in the form of unexpected emergency room visits, which can be costly even if a person has health insurance and prohibitively expensive if they don’t. They also come in the form of dental work, which is a separate type of insurance not usually covered by basic health plans. Dental work can easily run into the thousands of dollars and is the type of work that, when needed, is absolutely necessary ASAP.

Another big factor in outstanding medical debt that makes people think about filing for bankruptcy is the out-of-pocket costs of prescription drugs. Prescription drugs can cost an arm and a leg, and are notoriously difficult to get covered by typical health insurance plans.

Health conditions that lead to spiraling debt are often related to obesity and the effects of aging, and those suffering from such conditions and the associated debt are filing for bankruptcy at an ever-increasing rate.

Another worrying statistic from the study is that households that already have medical debt are less likely to seek treatment when they need it, as they want to avoid further debt burden and bankruptcy.

Also, even after filing for bankruptcy, which can eliminate large portions of unsecured debt, many people are afraid to seek new treatment, as they likely still don’t have adequate insurance and may not be able to pay the new medical debt for the long term. several years. years after initial discharge.

1.7 million people will file for bankruptcy due to medical debt this year, the study estimates. Fortunately, the protections offered by filing for bankruptcy are strong and can pay off most debt incurred by those suffering from health problems or accidents, but the bigger issue is that health problems and accidents are a fact of life. and it seems that something is happening. inherently flawed when a system fails to account for these realities in a meaningful way.