Medical Debts
Is your medical debt a bitter pill to swallow?
A study by ‘Commonwealth Fund’, found that as of 2007, 41% of working-age Americans, about 72 million people, carry medical debts. The figure is up by 7% from 34% in 2005.
Medical debts build up when people do not have adequate funds to meet expenses for treatment, hospitalization, medicines or other necessary medical procedures. Cost of health care and medical procedures have gone up considerably in the last few years and many families are finding it difficult to meet their medical expenses. People who are uninsured or underinsured are the worst hit. Often these patients have to pay their medical bills through credit cards resulting in high medical related credit card debts.
Uninsured patients lack the support from the insurance companies to negotiate their medical bills. They end up paying the full price of their medical treatment out of their own pockets. According to NCHC.org, over 47 million Americans (16% of the population) don’t have health insurance.
On the other hand, most underinsured patients realize the extent of their limited insurance coverage only after the bills start pouring in. Rehabilitation care, expensive drugs, out of network doctors, co-payment on bills, deductibles for medical care etc. all add up to significant medical expenses that have to be paid by the patient themselves. Nearly half of people without medical insurance currently have outstanding medical debts averaging $9,000 per person [Source:Credit.com]. In fact, 75% of people who filed for bankruptcy because of medical debts had health insurance. [Source:BCS Alliance.com]
Consequences of medical debts
As with any type of consumer debt, medical debt leads to many personal and financial problems:
- High medical care costs deter many people from seeking preventive care or from seeking treatment for chronic diseases. Worse still, many times they also stop treatment half way through!
- According to a survey conducted by ‘Commonwealth Fund’, 44% of those with medical debt used all or most of their savings to pay outstanding medical bills [Source: commonwealthfund.org].
- Results of the same survey also showed that one in five medical debtors incurred large credit card debt or took out a loan against their home to pay medical expenses.
- Many people have to resort to filing for bankruptcy in an effort to solve their medical debt problems. Statistics for 2003 and 2004 show that about 50% of personal bankruptcy filings were due to medical debt.
Managing medical debts can be very stressful. We, at understand your situation. We are committed to help you take care of your health care debts. Our one-on-one confidential counseling sessions will review your present financial situation. We will then work out the best possible option for you to manage your medical debts. If required we will help structure a Debt Management Plan (DMP) for you to pay off your medical debts in a systematic manner.
