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Medical debt is a major cause of bankruptcy filings

The medical care system in most states, including in Arkansas, remains unaffordable and a financial burden of major proportions to many consumers. The most surprising aspect of the problem is that even people with seemingly adequate health insurance are finding it necessary to file bankruptcy to survive medical debt. Clearly, medical debt has become a leading source of consumer bankruptcy filings nationwide.

One hospital system in another state more than doubled its profits from 2013 to 2014. However, some employees from the same hospital system have had to file bankruptcy despite having health coverage through the employing hospital. The unfair system left some employees in debt to their employer hospital for thousands of dollars in medical bills that they could not pay.

It is likely that the same unfair reality is plaguing hospital employees and insured consumers throughout the country. A 2014 article in The Atlantic reported that medical debts have become the number one reason for filing bankruptcy. Surprisingly, the article concluded that Americans have three times more medical debt than credit card and bank debt combined.

One obvious solution that has been urged by some interested parties is that the hospitals that are making substantial profits should be compelled to take some of those profits and pump them into free services for the poor. This is particularly true for non-profit hospitals that have large profits and get substantial tax breaks. It has been suggested that hospitals getting tax-exempt status must assist patients having incomes below the poverty level or lose their tax breaks.

Others assert that the problem is subsiding somewhat as the Affordable Care Act becomes more responsibly utilized, both here in Arkansas and throughout the country. Additionally, legislation should be passed to require that insurance payments relieve the patient's responsibility for bills. An insured patient should never have to worry about overwhelming medical debt under a system of comprehensive national health coverage. For those who have immediate problems with unmanageable medical debt, they may find it beneficial to consult with an experienced consumer bankruptcy attorney to learn how bankruptcy will help to clear up the problem.  

Source: thelundreport.org, "Medical Bankruptcy Report Shows Problem Continues Despite Health Law", Chris Gray, Dec. 11, 2015

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