If you live in Arkansas, you may benefit from learning more about how medical debt is the leading cause of bankruptcy. Professionals say this is a uniquely American problem largely caused by a broken health care system. As of April 2021, approximately 21 million Americans held $46 million in medical debt and were facing collections from a third party.
Understanding healthcare in the U.S.
The U.S. spends over $10,500 per capita on health care, which is far more than modern countries like Germany, the Netherlands and Australia. Medical prices in other countries are often more than 50% lower than in the U.S. In 2019, the average single deductible was over $1,900, and the average family deductible was over $3,600.
For approximately 46 million people, quality health care is unaffordable. Surveys indicate that around 60% of Americans have between $5,000 to $10,000 in medical debt.
Causes of medical debt in the U.S.
Some of the leading causes of medical debt are emergency room visits, visits with doctors and specialists, childbirth and related care, dental care and surprise billing. Some of the other causes include lab tests and fees, prescription drug costs, urgent surgeries hospital stays and management of long-term illnesses. Many Americans have gone into bankruptcy from medical debt associated with insurance premiums, elective surgeries and ambulance usage.
Managing medical debt in the U.S.
Professionals liken the medical debt situation to the subprime mortgage crisis of 2008. The industry allows people to get insurance plans they can’t afford that aren’t aligned with their income level. This results in many people not getting the medical coverage they need by the time they need it. Americans with the largest medical debts live in areas where Medicaid was not expanded. For some of these people, filing for bankruptcy is the only way to find relief from this debt.