There is no epidemic of medical bankruptcy
An an estimated 100 million Americans have health care debt, according to a survey released this month by the Kaiser Family Foundation. The problem is so severe, Kaiser says, that it is driving millions of people out of their homes or into bankruptcy.
But a closer look at the data reveals that medical debt, while burdensome for many, is not a crisis. The Kaiser survey found that 11% of respondents with current or past health debt had filed for personal bankruptcy “at least partially” due to their medical debt. It’s an overstatement to say that medical debt “caused” their bankruptcy. Consider that three quarters of medical debtors owe less than $5,000. That’s a fraction of the more than $90,000 the average US resident has in debt, ranging from student loans to mortgages to credit card bills.
Most Kaiser respondents, with or without health care debt, said they would be able to handle an unexpected $500 medical bill. 30% said they would pay the bill right away. Another 20% said they would put it on a credit card and pay it in full on the next statement, avoiding interest altogether. And 21% said they would put it on their credit card and pay it back over time.
In other words, most Americans are not in a health care debt crisis. More than half of respondents to Kaiser’s survey said it was easy for them to pay for health care. This is despite the fact that there were more than twice as many people who had medical debt in the survey as people who had no debt.
Put into context, Kaiser’s survey data is not indicative of a widespread medical bankruptcy catastrophe – nor is it a reason to consider the socialization of medical debt advising a takeover of the system. health by the government.
Sally C. Pipes is President and CEO and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. His latest book is
False premise, false promise: The dire reality of Medicare for All
(Meeting 2020). Follow her on Twitter @sallypipes.