Is medical debt still the main cause of personal banruptcy?

On Behalf of | Feb 8, 2018 | Firm News, Personal Bankruptcy |

Medical debt is hardly an isolated issue in America. After all, millions who required various procedures and treatment now experience a different, financial type of suffering. The debt caused by medical bills affects countless Floridians, but will this trend ever come to a close? Some experts claim that this issue is hardly at its end, while others see the light at the end of the tunnel.

A USA Today article from last May appears to give this issue a sobering account, calling medical debt the number one reason Americans file for bankruptcy. Providing data from the Kaiser Family Foundation, Today shares that over a quarter of adults in the country have trouble paying their medical bills. And while having insurance is usually a positive sign, this type of debt is unfazed by such protection. An unsettling amount of earnings go directly toward covering medical costs, and the most disturbing aspect is that these efforts still do not make ends meet. The two options from which most Americans choose are emergency savings or filing personal bankruptcy.

While many still swim in a sea of medical debt, others are finding relief through other outlets. Quartz shared last year that the nation was in its twelfth year of personal bankruptcy decline, with a 50 percent decrease since 2010. Although some argue on the exact reason for this plunge, many would agree that the Affordable Care Act had a hand in this progress. By putting an end to annual out-of-pocket medical bills and expanding insurance coverage to millions, the ACA worked toward reducing the number of people who file for personal bankruptcy as a result of medical expenses. However, the solution is not so simple; the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act also played a role in reducing bankruptcies nationwide. No matter which angle from which it is viewed, medical debt can become the tipping point for those who have preexisting financial challenges.