Our personal credit cards may be straining after this holiday gift-giving season but according to new research reported on the Nightly Business Report, (12/12/2019) 137 million people face financial hardship in 2019 due to medical debt.
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An increased number of patients are paying off medical bills with their credit cards.
- According to CompareCards.com, 33% are in debt due to medical bills.
- 60% used a credit card because they had no other way to pay
- 15% owe $1 thousand – $5 thousand in medical debt on a credit card
PBS (Public Broadcasting Systems) published (Health Jul 26, 2018, 5:26 PM EST)) a study found in Health Affairs that one in six Americans have past-due health care bills on their credit report, a debt totaling $81 billion in all. These findings are consistent with a 2017 Urban Institute report that suggests medical debt is the most common financial burden in collections in the United States, a country where health care spending amounts to 18 percent of the nation’s gross domestic product.
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Medical debt imparts other parts of a patient’s life such as trying to purchase a home. A Zillow survey shows that 13 thousand people who owe money for their health care expenses are turned down (38%) for their home mortgage applications. Financial companies see these people as a financial risk. Forty-four percent of mortgage applicants admitted that if they had a $1,000 unexpected bill they could not financially handle paying the bill.
Caroline Ratcliffe, a senior fellow at the Urban Institute who studies asset building and poverty found in a 2016 study that families that set aside between $250 and $749 were less likely to be evicted or miss a mortgage or utility payment.
However, Benedic Ippolito from the American Enterprise Institute feels that “If you know you can’t afford a bill, and you really don’t want to incur debt, then you might not go out and seek care.”
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Here are some options to dig yourself out of medical debt if you are unfortunate enough to find yourself in that situation. It can happen to you even if you have a full-time job with medical insurance – it only takes one catastrophic medical event.
- Negotiate with the provider before or after the surgery/event
- Get on a payment plan
- Transfer medical debt from a high-interest credit card to a low or no-interest card
- Hire a medical bill advocate
Some people are one catastrophe away from being insolvent or using credit cards to finance their health care; it’s a fact of life. Hopefully, you’ll never be in that situation.
If you read this blog on a regular basis you’ll know that maintaining health and wellness is a great idea. So, I wish you happy, healthy holidays.
