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Medical expenses: A major cause of bankruptcy

When people file for bankruptcy, they are often seeking relief from a surmounting pile of loan payments, debt and expenses. Medical expenses, however, are one of the most common types of debt responsible for pushing people off the financial ledge. Whether they have just been diagnosed with a chronic condition or they are required to go in for an unexpected surgical procedure, people may find themselves with medical debt. Furthermore, people may not be able to work while they are recovering or may become disabled and unable to work at all. 

According to a study published in the American Journal of Public Health, nearly 70% of bankruptcies in the United States involved medical issues. Every year, more than 530,000 families struggling with medical bills file for bankruptcy in an attempt to regain control of their finances. 

The high price of health care has taken a toll on many Americans and people are crying out for a solution to unaffordable care. Even when people have healthcare insurance coverage, they are still subject to high monthly premiums and high deductibles. High deductible plans may be the only affordable monthly option for many, yet they contribute to even more debt. On top of the monthly premium, patients must pay the deductible before the plan contributes a significant amount toward care. In some cases, people never reach that deductible and they are paying everything out-of-pocket. 

In addition, the price of healthcare varies depending on what state you are in and what medical institute you go to. Some people are wondering why an emergency room visit for a sprained ankle may cost $100 in one state and $3,000 in another. Yet all of these things contribute to medical debt and the need to file for bankruptcy for relief.

 

 

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