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The Problem of Medical Debt in America

Lampley Law Office Aug. 20, 2021

Going to the doctor or hospital can be a scary experience. Many people experience anxiety in health care settings, but for some people, the worry is about more than just their health — it is also about the bills. Medical debt is a problem that is quickly ballooning out of control.

According to one survey, around 20% of people in America have been in medical debt collections. The average amount of medical debt that lands someone in collections is only $429. This is just an average though, and some people owe much more than this. Researchers point out that people living in low-income communities and in the South tend to owe the highest amounts.

The Biggest Source of Debt

Medical debt is the largest source of consumer debt as well as collections. Patients are carrying so much medical debt that it is actually larger than all other sources of debt combined. If you are struggling under the weight of medical debt, you might not even realize that it is affecting your life both right now as well as in the future.

When you do not pay a medical bill, it can end up going to a debt collection agency. When this happens, the top three credit bureaus will receive information that shows up on your credit report. Having an unpaid medical bill on your credit report can make it difficult to qualify for loans or to secure lines of credit in the future.

Medical Debt Affects Daily Life

Most patients do not know how much they will have to pay for a doctor’s visit or procedure until the bills start showing up weeks or even months later. Even with insurance coverage, people frequently struggle to cover hundreds or thousands of dollars in medical bills. A 2016 survey found that 70% of people who have trouble paying their medical bills end up spending less on basic necessities like:

  • Food

  • Clothing

  • Household items

No one should have to give up on basic necessities just to pay off a medical bill. Unfortunately, this is the reality that so many patients in Florida face. Some even end up using credit cards or taking out loans to pay medical bills, but this really only transfers debt from one place to another.

Reducing Medical Bills

It is sometimes possible to secure smaller medical bills. Many hospitals are willing to negotiate with patients and may accept lower payments or even payment plans. Patients can also check their bills for possible mistakes, such as duplicated costs or bills for procedures they never actually received. It is not uncommon for insurance companies to initially deny covered costs either, so it is always a good idea to take a closer look.

Living under the constraints of too much medical debt can be exhausting. For some people, bankruptcy can provide a safe and proven path toward financial security. Both Chapter 7 and Chapter 13 bankruptcy can effectively discharge medical debt, as well as stopping foreclosures and collection efforts from harassing creditors.