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How out of control is medical debt?

On Behalf of | Nov 2, 2020 | Chapter 7 | 0 comments

All over the country, regardless of income level or even insurance coverage, healthcare costs went up. Unfortunately, it has become a common reason why many Americans have less money.

Medical debt can contribute to bankruptcy fears.

How common is medical debt?

In the United States, according to CNBC, around one-third of all working Americans have medical debt. Then, of those Americans, about 28% of them have outstanding balances and over half of those with debt defaulted at least once. On average, most people spend about $5,000 yearly on their health, from medical costs to supplies, prescriptions and insurance.

Almost half of all Americans worry about whether they can pay healthcare costs. While more common among the uninsured, even insured Americans fear the costs of medical debt. Many with insurance help pay their uninsured family members’ medical bills.

How much medical debt can adults afford?

Around 15% of all Americans have medical debt that they do not believe they can pay off within the next year, explains Gallup. With such a high number of Americans who cannot afford medical debt, it begs the question, how much is too much? 26% of adults claim that they would not be able to afford a $500 medical bill. Almost half of these adults make less than $40,000 per year.

For those who cannot afford medical debt, they would have to borrow money in some form. Some say that they would use the help of a financial institution, either through loans or credit cards. Whereas 14% say that they would look to friends or family members to borrow money.