Medical Debt is a Source of Stress and Strain for Millions of Americans

When two-thirds of US bankruptcies are tied to medical debt, $75 billion of past-due medical debt is owed by 43 million people in the US, and 1 out of 3 GoFundMe accounts are established to help pay medical bills, you might think there is a problem.?And you’d be right.??

Medical debt is increasingly a source of stress and strain on millions of Americans – and Georgians are not exempt. Healthcare costs are the number one reason why people file for bankruptcy, which leaves many individuals and families vulnerable to lawsuits by healthcare providers and debt collectors.?And lest you think this only impacts the uninsured, think again.?More than 20% of Americans with insurance under the age of 65 also have trouble covering their healthcare costs.?

?The cost of healthcare is not coming down.?In fact, the cost of everything continues to go up,?which means fewer dollars available to pay medical debt.?Some things you can control – your dining out, your use of gasoline, even, within reason, how much electricity or water you use.?But when it comes to your health, when you get sick, your choices are limited – delay care and get sicker, take only half the prescription so it lasts longer or assume the debt.?Doctors, hospitals, pharmaceuticals, medical devices, surgery – they aren’t available at an outlet.?You can’t wait for them to go on sale.?If you need care, you need it now.?And you pay the cost.?

?Health insurance deductibles are going up. (According to the Kaiser Family Foundation, deductibles are 63% higher than they were in 2011.) As technology advances, so does the patient’s share of nearly every procedure (delivering a baby is 20 times the cost of what it was in 1969).?Everything gets passed on to the patient.?It’s no wonder medical bills are difficult – if not impossible – to pay.?

?The Motley Fool reported that 53% of Americans are now convinced that getting a medical bill they can’t afford is just as bad as being diagnosed with a serious illness.?

?What kind of impact does this have??Clearly, a patient may delay or forego a visit to the doctor or filling a prescription which may exacerbate an existing health condition.?And mounting bills add to stress and anxiety, which take their tolls in a multitude of ways. But it’s more than just a patient’s health.?Medical debt can impact credit scores, which makes it difficult to secure a car loan, mortgage or even qualify for a new job.?It impacts one’s ability to buy food, pay for utilities and it contributes to housing insecurity.??

According to healthcare.com, nearly one in four Gen Zers and Millennials with medical debt in a 2022 survey skipped rent or mortgage payments on account of their debt.?Some individuals with medical debt simply wait for their wages to be garnished, which impacts their ability to afford basic necessities.?

And the NY Times reported that between February and May of 2020 (in the midst of the pandemic), 5.4 million Americans lost their health coverage.?

What’s the answer??Loans only kick the problem down the road.?And hospitals already offer financial assistance to reduce the patient's share of the costs.?Even that rose 55% in 2021 over 2020.?As you may imagine, debt collection tactics harm not only the finances but also the overall health of people already under significant financial strain.??

RIP Medical Debt, a national nonprofit, raises money from generous donors, acquires large portfolios of medical debt for those in financial need for pennies on the dollar (as debt collectors do) and then it abolishes the debt by sending letters to recipients letting them know they're free and clear of the acquired debt. If the debt was reported to the credit bureaus, it is removed. No strings attached.?When medical debt is canceled, individuals are much more likely to access important healthcare.?They are more likely to be motivated to pay other debts – which will raise their credit scores and improve their standard of living.??

However, for lasting impact to occur, change must happen at the systemic level.???

Building a system that does not create the burden of debt would be a system in which all people are adequately insured and healthcare services are accessible in all parts of Georgia.??

?Systemic change takes time – making insurance affordable and accessible for all,?making financial aid easily accessible/presumptive for patients, banning aggressive collection practices and educating people about preventative care (so they don’t end up in emergency rooms).?It seems daunting, but taken one step at a time, it’s doable.?