Americans are massively bankrupt due to medical debts

In 60% of cases, Americans today point out very heavy bills from medical institutions and services as the cause of bankruptcy. This is more often than bankruptcy due to loans for housing or study.

In April 2016, Venus Lockett was set to speak at an event in Atlanta. She was stressed - yesterday a woman made a presentation until late, and then mistakenly deleted it. When she went to the podium, she noticed that she could not pronounce words normally and made only indistinct sounds. Lockett, 57, suffered a mini-stroke, writes The Atlantic.

The uninsured woman was taken to a hospital several kilometers from the conference room. They kept her there all night, took tests and discharged her home, where she soon made a full recovery. In May the bill arrived. Lockett was charged $26 for “monitoring” and was required to pay within 203,62 days. Lockett fell into a stupor.

“Damn, I knew I shouldn’t have gone to the hospital,” she recalls. “But at the same time, I was scared when I couldn’t speak.”

Medical debt is a uniquely American phenomenon, a burden that is hard to imagine in other developed countries. According to a survey published in the American Journal of Public Health, nearly 60% of people who filed for bankruptcy reported that medical expenses contributed “very” or “somewhat” to their bankruptcy. This is higher than the percentage who cited home or student loans.

A study in 2016 showed that a third of the cancer patients who survived were in debt due to medical expenses, and 3% declared bankruptcy. According to a study by the Consumer Financial Protection Bureau of 2014, medical bills are the most common cause of debts sent to collection agencies.

Most consumer advocates said the problem would be exacerbated: the percentage of uninsured is growing, and more and more people are signing up for cheaper health insurance plans. More Americans get high-deductible insurance, which requires patients to pay thousands of dollars before the insurance company pays for anything. Networks of doctors are shrinking, which means that more and more health workers will be out of coverage.

Emergency room visits and scheduled surgical procedures are the most common reasons for large medical bills that patients simply cannot afford to pay. Sometimes bizarre loopholes make their way into the darkest moments of human destiny. For example, a baby will be covered at birth by Medicaid or the Children's Health Insurance Program, but a stillbirth may not be covered by that insurance. Therefore, the average cost per stillbirth for hospital services alone is more than $750 higher, adding further stress to parents.

Some states require hospitals to provide compassionate care to low-income and uninsured patients, but these patients often end up with bills. Hospitals send debts to debt collectors without telling the collectors anything about the charity, says Amelia Morris, legal director of Central California Legal Services. “Sometimes a patient gets a judgment and it turns out no one has ever heard of charity.”

A spokesperson for the American Hospital Association said that in 2017, medical facilities provided assistance worth over 38 billions to patients who could not afford it.

“Hospitals across the country are committed to finding ways to help underinsured and uninsured patients,” the spokesperson said. “Hospitals offer charity care programs, screen government aid for patient eligibility, and provide discounts when possible. Every day, American hospitals treat patients who can pay only minimal payment or no payment at all.”

However, some patients develop medical debt that causes them to stop seeking care because they fear the debt will mount. This debt can worsen a person's credit score, making it difficult for a person to move to a better area or make other health-related decisions. In the end, these people get worse and the debts continue to grow.

The $26 bill was not the last one Lockett received as a result of the April incident. On April 203, she received a separate bill for consultations with two doctors during her hospital stay in the amount of $28. This amount was added to several other diagnostic test costs for a new bill of $1301 that arrived a month later.

In May, another bill came from Grady EMS - $1807 for a car that picked her up from a conference room. Lockett says she called the company to try to negotiate, and within a month, Grady EMS sent her a new, reduced bill for $1084.

Attempts by Lockett to negotiate with the hospital were less successful. On April 26, the woman received a letter from Chamberlin Edmonds, claiming that she could be helped to “find government benefits” to pay a bill, such as Medicaid or Medicare. Lockett says she did not have the right to participate in Medicare or Medicaid. Later, the company deleted its site and did not answer journalists' questions. As a result, having asked for help in the service, Lockett was left with nothing but his $ 30 000 debt.

A year later, Lockett attended a meeting with representatives of the non-profit group Georgia Watch. One representative told her that the organization has a guide for people who want to negotiate their medical bills. Lockett took a copy of the recommendations and called the hospital. This time, according to her, the account was canceled.

"The reality is that medical costs are not objective, true costs," says Berneta L. Haynes of Georgia Watch. One day, an MRI could cost $19. Another time it won't cost anything.

Although she still had a reduced bill from the ER, Lockett was lucky. For many, no. Dana Peterman, a physical therapist from Forsyth, Georgia, owed more than $4000 after her son was rushed to the hospital with an anaphylactic reaction to peanuts in 2017. She tried to negotiate, but the hospital did not give a discount. The woman paid the full amount, not wanting the debt to affect her credit history.

To negotiate with a hospital, consumer advocates recommend asking about financial assistance, including charity care for the uninsured. If this doesn't help, you need to find out if the patient can pay as if they had Medicare - these amounts are usually lower. Hospitals and even collection agencies often agree to such decisions in exchange for a one-time payment.

The system requires people to negotiate on their behalf with giant corporations for sums of more than tens of thousands of dollars, often while in bed recovering from illness. If the patient does not pay, the medical debt may be sent to a debt collector. Small debts are sold to debt buyers - companies that try to collect as much as possible from outstanding debts. These buyers rely only on a list of debts on a spreadsheet rather than an actual medical history, making it difficult for patients to negotiate a deal or correct a mistake. In cases where things are really bad and a person literally has to hand over all their income to pay off debts or go to court, it may make sense to file for bankruptcy, experts say.

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