Medical debt is among the biggest financial challenges Americans face, and according to a recent investigation by NerdWallet, the problem isn’t because Americans are spending their money elsewhere. The NerdWallet investigation involved an online survey of 2,016 American adults 18 years old and above, as well as public and private sector reports on consumer debt, medical billing errors and hospital prices.
The key findings of the investigation may or may not come as a surprise to readers, depending on how familiar they are with the current medical debt landscape. First is that medical care is simply more expensive that many people can afford, even with insurance. Medical debt is the largest category of consumer debt in collections, with nearly one in five American adults facing debt collection calls with respect to medical debt this year.
Second, errors in medical billing are a significant problem in the United States and increase costs for consumers. In 2013, for instance, the average billing error rate for Medicare was 49 percent, which had the result of providing an average overpayment of 26.4 percent. Third, because health care prices vary widely, it is nearly impossible for consumers of medical services to be clear about whether a hospital charges fair prices for their services. More standardization would make it easier for consumers to spend their money wisely. Each of these findings demonstrates the difficulty for consumers of getting and maintaining control of medical expenses.
We have previously mentioned on this blog that medical debt is very common in bankruptcy, and is among the top reasons for debtors to go forward with a bankruptcy filing. Consumers who are informed should understand that, though their options are limited, there are ways to help control the costs of health care and that there is the possibility of finding debt relief by filing for bankruptcy, if necessary. Those who are contemplating a bankruptcy filing can benefit from working with an experienced attorney to make sure they understand which form of bankruptcy is right for them, how the process works, and how they can have a successful case.
Source: Nerdwallet.com, “NerdWallet Health Study: Medical Debt Crisis Worsening Despite Policy Advances,” Oct. 8. 2014.