Medical Bills Often ‘Root Cause’ Of Personal Bankruptcy

Medical bills are the problem, according to Dan Mangan with CNBC, who reports on NerdWallet Health’s bankruptcy study. The study looked at numbers from a variety of sources, including the U.S. Census and federal courts, and concluded that for millions of Americans healthcare expenses are at the top of the list of problems when it comes to making ends meet.

This goes for Americans with health insurance and those without health insurance (though the picture is even bleaker for those without).

Based on Mangan’s report, you could group affected Americans into three buckets:

  1. Those 1.7 million people who will file for bankruptcy in 2013
  2. Those 56 million people who won’t file for bankruptcy but who will still struggle to pay medical bills
  3. Those 10 million people who, even though they do have health insurance, won’t have an easy go at paying medical bills

It all paints a picture of “rising health costs,” as Mangan writes.

Mangan quotes NerdWallet Health VP Christina LaMontagne:

“A lot of Americans probably think about bankruptcy as coming from unpaid credit-card debt or mortgages. But the root cause of all those troubles may well be medical bills.”

So those 1.7 million people filing for Chapter 7 or Chapter 13 bankruptcy (the usual types of personal bankruptcy filings) are doing so not because they ran up credit-card debt on frivolous purchases like flat-screen TVs, but because they ran up credit-card debt to cover medical bills – which is a whole different thing.

Source: Medical Bills Are the Biggest Cause of US Bankruptcies: Study

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Medical Bills Often ‘Root Cause’ Of Personal Bankruptcy