Medical Debt Ruins Lives
I am one of the 51% of people living in the United States who avoid going to the doctor because of the high cost of healthcare. And I am actually lucky - extremely lucky because I have health insurance through my employer, I have a pre-existing condition that is treatable with a low-cost medication, that is not life-threatening, that requires relatively infrequent monitoring, and I have no other serious medical conditions that I am aware of. Many in America face much worse and do not have the choice to avoid medical care. Many will face accessing care in a country with some of the highest medical costs in the world, and as a result, many will experience financial ruin and bankruptcy. With the greatest conviction, I don’t believe anyone who lives in this country should ever face a situation in which they have to choose between receiving medical care and financial ruin. In my mind, our healthcare system in its current state is exploitative, financially disastrous, predatory, and ethically reprehensible. This is unacceptable, and that is why I’m writing this article.
The Life Ruining Cost of Medical Debt
Over 137 million Americans are hurting financially because of medical costs, and over 60% of Americans who file for bankruptcy do so because of medical debt.
One only has to Google ‘Medical debt in America’ to find innumerable articles and studies highlighting statistics like these above, it is both a common, long-term, and well-known crisis.
What I found in my research illustrated the terrifying reality of how burdensome this debt is —and that it often happens to people who are not only insured (62% had insurance at the time it was incurred) but who otherwise are very financially responsible and who didn’t struggle with debt that they couldn't repay until they had a health crisis. 60% of these individuals will go on to have their life savings vanish and drain their entire retirement savings, they will lose everything they’ve worked for in their life in order to pay this debt. All because they had the misfortune of getting sick. This statistic includes people who have health insurance and this is a direct result of the high out of pocket costs (OOPC) that are increasingly common with many health insurance policies.
I don’t want to inundate you with endless statistics, so I will attempt to distill what I found in my research down to what illustrates both the seriousness and inevitability of this debt. I want to emphasize that this debt is often unavoidable due to both the nature of American health insurance coverage and how high treatment costs are compared to other countries— more on that and the predatory healthcare system in my next article (I realized after writing about medical debt its too much to include in one article). Everything costs more in the United States, routine medical procedures and tests costs thousands of dollars, and there is little to no price transparency so you will not know how much you're billed for medical services until after the fact. Medical debt is so common and so damaging that 26% of Americans stated that medical debt had caused major problems with their family/personal finances, that's over a quarter of all Americans, and this impact is felt almost equally between the insured and uninsured. This is a huge number given 92% of Americans currently have health insurance, why are 26% of them still struggling with medical debt? 54% of these Americans with medical debt have no other debt on their credit reports, and 22% of those with debt in collections have only medical debt in collections. Here is the effect this life-ruining medical debt has on their lives:
- 37% needed to borrow money from friends or family.
- 34% had to take on more credit card debt.
- 70% were forced to cut back on household essentials like food, clothing, school supplies, etc.
- 41% took on a second job or increased their hours at their current job.
- 35% were unable to pay their medical debt and also afford basic necessities such as food and rent.
- 59% exhausted their entire savings to pay the debt.
- 100% were extremely distressed and devastated by this debt (I came up with this statistic myself).
It only takes one medical emergency or long term health problem to destroy a person or family financially. One of the saddest and most appalling examples of this reality is the plight of those who are diagnosed with cancer. Facing a cancer diagnosis and arduous treatment is difficult enough, but sadly 50% of cancer survivors will also experience extreme financial difficulty as a direct result of the medical bills resulting from their cancer treatment, and cancer patients are 2.5x more likely to file for bankruptcy after diagnosis. 42% of cancer patients will deplete their life assets by their second year of treatment. The likelihood of this increases with the length and intensity of cancer treatment, and is more frequently an issue among younger cancer patients; the average loss being $92,098. A huge contributing factor to these losses is medical debt due to high OOPC associated with cancer treatment. Some will even be forced to reduce or stop treatment altogether because they can no longer afford to incur more debt. 25% of cancer patients will avoid some part of their treatment, 10% avoided doctor visits, and 8% stopped or cut doses of essential cancer medications. The stress that comes with having to pay for cancer treatments negatively affects patient outcomes. The majority of us know at least one person who has been ruined financially by the tragedy of cancer, and this is unacceptable.
If a medical bill goes unpaid, providers can sell this debt at a steep discount to collection agencies who will then proceed to harass the debtor and demand payment. Thankfully major credit agencies will now wait 180 days before including delinquent medical bills in credit reports, but after this grace period, the debt will damage the debtor’s credit rating. Creditors can take legal action against the debtor to force payment and can garnish the debtor’s wages or even put a lien on the property. 1.5% of Americans currently have their wages garnished due to delinquent medical bills. This is a horrendous consequence of medical debt that is so often not undertaken voluntarily. And the financial toll is only one component of the equation —to have the albatross of debt clouding your life and future has emotional and mental costs as well. And all because you had the misfortune of needing medical care in America.
All of this illustrates that its common for people who have no debt, who are careful with their finances, and who have health insurance can still end up being financially crippled by medical debt. This affects all of us, we should all be outraged by this reality. Where illness goes medical debt follows, this is the rule rather than the exception in American healthcare in 2020. There is no safety net unless you have the most comprehensive health insurance (aka exorbitantly expensive insurance with low OOPC), are wealthy and can either absorb these costs or afford the latter, or you and your family have superhuman immunity to all physical and mental illnesses/health emergencies and will never have to engage with the healthcare system. Unfortunately, no one is immune to health problems, and we are all one health problem away from potentially losing everything. We should all be fighting for a better system, for ourselves, for our family members, for our friends, for anyone who will ever get sick in this country.
I do not feel the players in this predatory healthcare system are vilified enough or receive enough negative attention for the unethical practices that are causing the average American to live in fear of getting sick because they cannot afford healthcare. The issue of medical debt is a direct result of our predatory healthcare system, and I hope to write more about these practices, how the insured end up in debt, and the high cost of healthcare in a future article. I find these issues very upsetting and unjust, and even more so that its not a problem that will likely be solved anytime soon given the current political climate in this country.
