Medical bills play a role in 60% of personal bankruptcy filings, according to a new report published in the American Journal of Public Health. Of those surveyed for the report, 6 out of 10 say that a medical expense "very much" or "somewhat" contributed to their bankruptcy - more than those who cited home foreclosures or even student loans.
The survey helps solidify statistics showing that many Americans who face major health scares wind up in a precarious financial position afterward. In 2016, a study showed that 33% of cancer survivors had gone into debt as a result of their medical expenses and that 3% of them had filed for bankruptcy.
A Consumer Financial Protection Bureau study from 2014 showed that medical bills are the "most common cause of unpaid bills sent to collection agencies". About 20% of Americans have a medical claim on their credit report, according to the study, while the same proportion currently has a medical bill overdue.
Deborah Thorne, a sociologist at the University of Idaho who co-authored the latest bankruptcy study told the Atlantic: “It’s just life. It’s not like they’ve done anything wrong.” In interviews conducted by The Atlantic, half a dozen consumer advocates responded by saying that they believed the problem would get worse, since the rate of uninsured was rising and more people were signing up for "skimpier health insurance plans" introduced by the Trump administration.
More Americans also pay into high deductible plans, which require thousands of dollars in payments before insurance kicks in. At the same time, doctor networks have grown narrower.
Out of all medical bills, emergency room visits and planned surgical procedures are the most common cause of large medical bills that patients can't afford. Some times, hospitals may be covered by a person's insurance, but the doctors that work there and the ambulance company aren't, leading to patients being billed for the balance.
Berneta L. Haynes, the director of equity and access at Georgia Watch said: "The reality is that medical costs are not objective, real costs.”
Some states require that hospitals provide charity care to certain low income and uninsured patients, but these people often wind up getting regular bills, too.
Emilia Morris, the legal director of Central California Legal Services said: “The debt collectors are trying to collect these debts without making charity care available. The patient sometimes gets sued, gets a judgment entered against them, without ever having heard of charity care.”
As a result of these bills often leading to personal bankruptcies, many in the medical field now wind up just passing them on to debt collectors.
Simon Sandoval-Moshenberg, a legal director at the Legal Aid Justice Center, said: “Now we are seeing small-time medical practices get involved in selling their bad debts to debt buyers for pennies on the dollar.”