According to the Kaiser Family Foundation (KFF) report, “An estimated 1 in 3 Americans have trouble paying their medical bills. They are gradually paying medical bills over time or they have bills they can’t afford to pay at all.”
Catastrophic injuries and chronic diseases have devastated the quality of life of too many families in this country. The high cost of health care is emptying the wallets and savings of millions of Americans. The consequence; medical debt is the #1 cause of personal bankruptcy in the United States
Both the insured and uninsured suffer from high medical costs. Although being uninsured puts you at a greater risk of falling into debt, having health insurance is not a guarantee against worrisome medical bills.
Medical Debt
The KFF/NYTimes report cited many examples of people having a miserable time trying to get out from under the weight of medical debt.
A truck driver with health insurance was surprised by the “truckload” of medical bills after his surgery. He received bills not only from the hospital and surgeon but from many providers (e.g. anesthesiologists, radiologists) who were not in his health care network. Years later, the out-of-pocket medical costs for him and his family were overwhelming and forced him to declare bankruptcy.
Factors Contributing to Medical Debt
- Being uninsured
- Out-of-pocket expenses — medical services not covered by health insurance
- Cost sharing — high deductibles
- High cost of monthly health premiums
- Out of network costs
- Unexpected claim denials
- Unhealthy lifestyle
- Inadequate savings
- High cost of drugs
Inadequate Savings
Teachers, construction workers, financial planners, nurses and others all seem to face a common problem — inadequate savings to pay for anything from a broken appliance to a broken leg.
Lack of “rainy day” savings has gone from bad to worse in the U.S. A survey of 7000 Americans conducted in 2016 by GOBanking Rates asked, “How much do you have saved in your saving account?” The results are stunning: 7 out of 10 (69%) adults between the ages of 18-64 have less than $1000 in their savings account and one third has zero money in savings.
Lack of sufficient savings to deal with emergencies and chronic medical bills are pivotal reasons for medical debt being the number one cause of bankruptcy in America. This chaotic situation results in emotional distress, damaged credit and financial upheavals in families.
The pressure of paying outstanding medical bills has forced families to increase credit card debt and use up their savings. As a result, they have eliminated major purchases, postpone household spending and put off vacations. They have worked more hours, got second jobs and borrowed money from friends and family.
Surveys indicate that the United States lags behind the Scandinavian and many other industrialized western countries concerning quality of life issues. The reason just may be that they enjoy peace of mind because they feel secure and protected by their health care coverage.
In a previous post, “Script Shock — The Staggering Cost of Prescription Drugs,” the article emphasized that the cost of medications is spiraling out of control. Consider the New York Times article of October 18, 2017 that reported the drug Yescarta, which was approved by the Food and Drug Administration (FDA) on 10/18/2017 for “aggressive forms of blood cancer and non-Hodgkin’s Lymphoma.” It’s a form of gene therapy designed to be given once intravenously: cost — $ 373,000, that is, three hundred and seventy three thousand dollars!
In the same Times article the author noted that in August, 2017 the FDA approved Kymriah, a cancer drug indicated for an aggressive form of acute leukemia, costing $475,000 — four hundred and seventy five thousand dollars!
Don McCanne, M.D. puts it this way, ”These experts from the KFF/NYTimes survey of adults 18 to 64 confirm once again that our multi-payer health insurance system falls far short in preventing financial insecurity for those with medical needs. The survey demonstrates “the deplorable consequences of the financial hardships created by this system.”
In a more moderate tone, Ruth R. Faden, PhD, MPH, Professor at the Johns Hopkins University, noted that the benefits of adequate health care go beyond statistical outcomes and medical costs.
“There is value in the security of knowing dying loved ones will be cared for, that the burden on family members of people with dementias will be lessened, and improving prospects for disadvantaged children and communities.”
References
U.S. Bureau of Economic Analysis, Personal Saving Rate [PSAVERT], retrieved from FRED, Federal Reserve Bank of St. Louis;, May, 2017.
Huddleston, Cameron; GOBankingRates, September 19, 2016
KFF/NYTimes; Medical Bills Survey; Burden of Medical Debt, Even With Insurance; January 5, 2016
Kaiser Family Foundation; Karen Pollitz and Cynthia Cox et al; Medical Debt Among People With Insurance; January 7, 2014
Anticaglia, Joseph R; “Script Shock — Staggering Cost of Prescription Drugs” HC Smart, October, 2017
This article is intended solely as a learning experience. Please consult your physician for diagnostic and treatment options.