Will Medical Debt Lead to Bankruptcy and/or Homelessness?

Over a quarter of Americans are straddled with serious medical debt. Medical bills that come rolling in for prescriptions, emergency care, hospital and doctor visits, physical therapy, medical devices, and related insurance premiums suck up huge portions of Americans’ earnings, often leaving them to forgo needed medical care, heating, grocery purchases, credit card debt, or rent and mortgage payments. With over six in ten bankruptcies related to medical bills, it’s no wonder that there is a connection between medical debt, bankruptcy, and homelessness. Furthermore, studies confirm that poor health is linked to higher rates of default and foreclosure among older individuals. Alarmingly, Black Americans who live in racially distinctive areas experience disproportionately higher rates of such debt, leading to higher rates of home foreclosure and therefore disparate rates in home ownership.

Study Results

It turns out that, as expected, medical debt that reaches the tens of thousands of dollars and more can be life-altering. Surprisingly though, even smaller amounts of medical debt can be catastrophic. One study in Seattle found that homeless adults generally had some sort of debt, and over 60 percent of respondents reported that they currently held medical debt. Nearly half of those individuals said they had had trouble paying their own or family members’ medical debt, and three-fourths stated that their cases had been sent to collection agencies. Over 30 percent of these homeless people felt that their medical bills were largely the cause of their housing crisis. Data backs up that conclusion—as those with medical debt tend to have the length of their homelessness prolonged by more than two whole years—with people of color remaining homeless for roughly a year more than that.

What About Insurance?

Over half of the homeless individuals surveyed reported having health insurance, but that they accumulated medical debt in spite of that fact. Roughly half had debt of under $1,000, and another third said they had less than $300 in medical debt. These realities indicate that even a small amount of medical debt can have a significant impact on the length of one’s homelessness. For those whose debt was sent to collections, lifetime homelessness stretched out 11 years longer than for those whose medical debt wasn’t sent to a collection agency.

The Bankruptcy Help You Need

At the Law Office of Julia Kefalinos, our experienced and compassionate Miami bankruptcy attorneys understand the challenges associated with medical debt and are committed to helping you get through the bankruptcy process with your dignity intact and the ability to make a fresh start. To discuss your situation, schedule a confidential consultation in our office today.

Source:

publichealthpost.org/health-equity/medical-debt-homelessness/