Medical Bankruptcy

Medical care in the American health care system can be incredibly expensive, and complaints about unexpected bills with high dollar amounts are not uncommon. This issue is so widespread that medical bills are the leading cause of bankruptcy in the United States, with 66% of bankruptcies caused directly by medical expenses. This is a deeply concerning statistic unique to the Unites States where health care is not provided to citizens through a government program at little to no out of pocket cost, as is the case in most other developed countries. Instead patients are responsible for finding their own health insurance, which often ends up tied to ones employer, and there is no guarantee of coverage.

There are many reasons that could be pointed to as the cause of these bankruptcies. A major contributing factor is that 27 million people in 2021 were uninsured. Having no insurance can lead to staggering bills should an emergency occur. Another major factor is that the quality of insurance can vary wildly, and patients still have to contend with premiums, deductibles, and co-pays. All of these out-of-pocket expenses can add up quickly and put patients in a difficult financial position. When these facts are considered alongside that fact that a majority of Americans cannot afford an unexpected $500 bill, it is no wonder things looks so bleak.

This situation can also lead to changing attitudes about utilizing health care. 40% of Americans are concerned they won’t be able to afford health care this year. Many patients report delaying care or declining care because of their inability to pay. There are examples of patients attempting to ration their insulin supply due to the price. These actions often result in more costly treatment regimens when compared to the relevant preventative services. Mistrust in healthcare can also play into this and disincentivize people from getting care.

The impact of medical bankruptcies cannot be understated. Having to declare bankruptcy due to medical debt can have broad impacts on both a persons physical and mental well-being. Medical outcomes (including mental health) can be significantly impacted by declaring bankruptcy. Additionally, 17% of adults with medical debt declared bankruptcy or lost their house because of it. Losing ones house or access to other basic needs due to bills that don’t exist in other countries is again a uniquely American issue.

Many people argue that a universal single-payer system administered by the government, such as Bernie Sanders’ Medicare For All bill, is the best solution, and the most similar to other countries. Others argue that a public option or expansions to the Affordable Care Act are perhaps more reasonable solutions. I think that there are merits to both of these options in addition to others, as well as consequences. Healthcare reform has happened several times throughout American history, sponsored by both political parties at various points, and it is clear that more reform is necessary.

While the pros and cons of various systems can be debated, I think it is clear that the current situation is both tragic and unsustainable. It should not be the case that anybody loses their house in the richest country in the world due to bills out of their control. I think it is clear that reform is desperately needed, and the question should be how, not if or when, updates to the system are made. In my opinion, supplemental legislation to the ACA regulating medical bankruptcies should be passed while broader changes to the system are debated and adopted over time.

In summary, medical debt is the leading cause of bankruptcy in the United States and has broad impacts on patients health outcomes as well as emotional and financial well-being. This kind of debt is unique to the United States and the structure of our health care system. There are many potential causes and solutions to this issue, and it is imperative that action be taken to prevent further harm to patients lives.

Sources:

https://www.retireguide.com/retirement-planning/risks/medical-bankruptcy-statistics/

https://www.cdc.gov/nchs/data/nhsr/nhsr169.pdf