A new study finds that two out of every three American families that file for bankruptcy do so because of high health care costs. The American Public Health Association (AJPH) survey shows 66.5% of all bankruptcies can be tied to medical issues.
The group estimates that an average of 530,000 families files for bankruptcy each year due to high medical costs and bills as well as missing time at work due to medical issues.
Rates remain high despite the Affordable Care Act
While bankruptcy rates among people with massive medical debt are nothing new, the AJPH study did uncover a new finding showing bankruptcies have increased since the Affordable Care Act (ACA) became law. Cases citing medical debt rose slightly in the three years that followed the law’s implementation.
Researchers say the increase was fueled by the lack of high-quality health insurance coverage. The study says many plans offered by employers or through the Health Insurance Marketplace provide inadequate coverage, resulting in people who get sick and still acquire substantial debt while also being forced to miss work and paychecks due to their conditions.
Most American workers have little or no savings
Jobs site CareerBuilder surveyed full-time workers in the U.S. and found that more than 75% said they are living paycheck to paycheck. Financial website Bankrate.com took it a step further finding that only 40% of Americans say they have $1,000 in their savings accounts to cover an unexpected expense. The AJPH study reported that families filing for bankruptcy might have multiple reasons, including:
- Unaffordable mortgages
- Spending beyond their means
- Helping friends or relatives
- Student loans
- Divorce or separation
Seeking legal advice can help you through a difficult time
Many people consider bankruptcy as a worst-case scenario, but it can also be a way of dealing with overwhelming debts while preventing collection efforts and wage garnishment. Advice from an experienced bankruptcy attorney here in Indiana can help you through a difficult time and find the best solution for getting your finances and life back on track.