There are a number of different debt crisis looming for Americans, but the biggest one may be medical debt. Recent reports reveal that over 100 million adults, more than 40% of all the adults in America have medical debt. That is a massive number that looks like it will only rise significantly over time.
Unlike other forms of debt, medical debt is generally not debt you consider in advance. Rather, it is something that happens to you. Medical debt is thrust upon people due to accident, illness, age, and sometimes bad luck. The major issue with medical debt is that medical treatment doesn't have upfront and predictable pricing so there is no cap on what someone might owe for their treatment. Just a few days stay in a hospital can drive medical debt into the hundreds of thousands of dollars.
In our practice we see examples of crushing medical debt everyday. For instance, one family, with health insurance picked up $80,000 of medical debt as a result of giving birth to premature twins. The family was insured but their insurance didn't cover the neonatal intensive care required for premature births. In another example, a recent bankruptcy filer incurred more than $25,000 of debt due to going to the emergency room for an intestinal obstruction. Both families had to declare bankruptcy and one even lost their home. The reality is that nearly half of all American consumers do not have the money on hand to afford a $500 medical emergency.
One of the major problems is the way medical debt is presented. Patients must sign vague financial agreements when admitted that make broad statements such as “I agree to pay for charges not covered by my insurance.” Meanwhile, nobody knows what insurance does or does not cover. Moreover, no one has the chance to actually review the complicated paperwork prior to signing since it is buried in a stack of paperwork you have to fill out when you get to the hospital.
To add insult to injury, medical debt collection is outsourced to aggressive debt collectors who don't care much for federal or state laws protecting consumers from debt collections. Even with the recent announcement that credit reporting agencies will no longer report small medical debts and will remove medical debts that have been paid, it will not have any real impact for most consumers. The fact is that nearly 20% of all American consumers have more medical debt than they will ever be able to payoff in their lifetime.
The fix to medical debt is complicated and requires us to answer big picture questions about the direction of our way of life. A system that saddles nearly half of its citizens with insurmountable debt every time they have to go to the hospital or doctor's office cannot sustain itself. A fully functional and efficient society would rid its citizens of medical debt altogether, but we know that is not an option in our current economic system since we live in a debtor's economy. But, if you are saddled by medical debt then gives us a call. There are strategies consumer lawyers can use, such as debt settlement, state and federal consumer collection laws, and bankruptcy to help rid you of your medical debt.
