Almost everyone can agree that health care in the United States is expensive. In addition, less and less medical institutions are willing to forgive all or a portion of a medical bill. Qualifications for Medicaid and Medicare are getting stricter as government funding for these programs is at an all-time low. So, how many people are forced to file bankruptcy due to insurmountable medical bills?
The answer is that as of 2007, a Harvard study shows that at least 60% of bankruptcies are related to medical bills. Even people with health insurance are filing bankruptcy. Insurance premiums, deductibles, co-pay, and out of pocket expenses cause medical bills to drown individuals and families in medical debt. Harvard also discovered that 75% of those filing bankruptcy for medical reasons had health insurance. It is clear that having health insurance is no guarantee against carrying debt related to health care.
Sometimes, it is not just medical bills alone that cause people to file bankruptcy. If a person is too ill to work, they will lose income, making it harder than ever to pay for medical bills. If people are forced to quit their job, that can mean they lose their health insurance as well.
The American Journal of Medicine reports that even well educated, middle class home owners are subject to overwhelming medical bills. People are forced to get a second mortgage on their home to pay their medical bills. Another problem is that because of medical bills, people are using credit cards to pay for day to day expenses such as groceries and gas. Doing so places individuals and families more and more in debt.
In 2010, the Commonwealth Fund learned that due to the slow economy and high unemployment, 24% of working adults said they had lost a job in the past two years. Losing a job also means losing health care benefits.
Since the Social Security Administration (SSA) will not consider a person to be disabled until they have been out of work for 24 months, people can accumulate a huge amount of medical debt between the time they become disabled and when Medicare benefits begin.