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Medical debt is a leading cause of bankruptcy

On Behalf of | Jul 24, 2019 | Medical Debt |

Recovering from the great recession did not include saving up for major health care expenses. Most people here in Texas and across the country felt fortunate they managed to get through it with their homes, their jobs and perhaps, some savings. Even so, an unexpected injury or illness could end up costing tens of thousands of dollars, if not more. Some people end up with hundreds of thousands or millions of dollars’ worth of medical debt — and that is with health insurance.

As it turns out, this scenario is not uncommon. A recent study found that somewhere in the neighborhood of 350,000 people file bankruptcy each year due to overwhelming amounts of medical expenses. That means that approximately 66.5% of the bankruptcies filed resulted from this type of debt. Even though the president recently issued an Executive Order attempting to make the medical industry more transparent about out-of-pocket costs for patients, emergencies and serious illnesses do not usually allow people to “shop around” for cheaper medical care, if that exists.

Access to health care insurance has not seemed to help the problem. The supposition is that the medical insurance provided by the Affordable Care Act failed to provide any real relief for people who need health care. The percentage of people citing medical debt as the reason for bankruptcy actually increased after the passage of the act.

For this reason, many people turn to bankruptcy in order to find a solution to their medical debt issues. The relief provided through this debt relief option allows families to receive a fresh financial start. Until health care becomes more affordable across the country, including here in Texas, the number of people using this option to relieve themselves of this type of overwhelming burden may only continue to rise.