Study: Medical debt still a big problem for many

A new study shows that medical debt is a large problem for many people in the U.S. and can lead to financial struggles.

Most people in Orlando work hard to keep their finances under control. They pay their credit card balances every month, save up for large purchases and keep to their budget. However, there is one debt that can hit them when they least expect it - medical bills.

A look at medical debt

A new survey conducted by the Kaiser Family Foundation and The New York Times shows that medical debt is still a big problem for many people. One person says after his wife died from cancer, he had to use her retirement savings to pay for her hospital bills. When he had to pay $4,000 for his cost of a knee replacement, he cashed out an individual retirement account.

The study, which included over 1,000 adults, revealed that medical debt caused people to take the following actions:

  • Used up savings accounts
  • Borrowed money from family and friends
  • Put in more hours or got a second job
  • Used credit cards to pay bills

People who participated in the study also said that they reduced their spending for the household. Many people with medical debt may choose to spend less on food, struggle to pay household bills and even meet their mortgage.

Less coverage

The study showed that even those people who had insurance still struggled with debt. Experts say that this is due to the fact insurers are offering less coverage, leaving people with higher out-of-pocket costs. For example, some insurance plans pay 80 percent but if someone is undergoing treatment for cancer, that 20 percent could quickly climb into thousands of dollars.

Insurers are also very strict concerning the doctors people on their plans can receive treatment from. This can leave people with huge bills if they accidently see a doctor or specialist who is not on the preferred provider list.

Medical debt and bankruptcy

As medical costs and pharmaceutical prices continue to rise, many people are left with no choice but to file for bankruptcy. CNBC reports that in 2014, medical-related debt was cited for 52 percent of new collection cases. In 2013, bankruptcy filings showed the No. 1 cause was medical debt.

Many people will forego other bills to pay their medical costs, which usually are for health issues that are serious. Some people are even choosing to not fill their prescriptions or skip doses due to impact of the drugs on their budget. It is estimated that medical bills will cause financial problems for 56 million people across the country.

For those who are considering bankruptcy in Florida, they may find it helpful to speak with an experienced attorney. An attorney can explain to them how bankruptcy works and how to get started.