A study from the Kaiser Family Foundation (KFF) recently found that more than half of Americans have owed medical debt in the last year, with 61% receiving a surprise medical bill.
In many cases, people with medical insurance have discovered that they owe large amounts of money without realizing for a medical expense that isn’t covered by their policy.
Like any type of debt, medical debt can lead to financial hardship and credit problems. It means that people have less money to spend on essential items, like housing, food, and utilities.
People can also be at risk of accumulating medical debt, meaning they avoid future medical treatment which can be extremely dangerous for their overall health.
Furthermore, medical debt can have a major impact of people’s credit. According to the National Consumer Law Center, last year, health-related debt was the number one cause of bankruptcy.
Who is affected by medical debt?
According to the Survey of Income and Program Participation (SIPP), the average medical debt is $2,000. Some of the factors that contribute to whether a household carries medical debt include age, education, poverty, ethnicity, and other social, health, and economic factors.
For example, those with a lower level of education and households with children under 18 were more likely to have medical debts. Regionally, Southern households were the most likely to have medical debts, and those in the West and Northeast were least likely.
Unexpected bills are often disputed
In the Kaiser Family Foundation (KFF) report, it was noted that, among insured adults, 61% received a surprise medical bill and 53% said they believed their bill contained an error.
A large number of these patients said the bill contained items that should be covered by their insurance or that they had been billed for services that were already paid for.
In many cases, the medical bill disputes are not resolved and 32% of people with disputed health care debt have had that bill sent to collections. This can damage their credit score, limit their ability to get credit, and, in some cases, lead to bankruptcy.