Medical Debt Cited More Often in Bankruptcies

Medical debt is increasingly a factor in personal bankruptcy filings, an analysis of data at a large credit-counseling agency finds.

Roughly 20 percent of those seeking financial counseling this year and last cited medical debt as the primary cause of their decision to seek bankruptcy protection, according to CredAbility, an Atlanta-based nonprofit credit counseling agency that serves clients nationally. That’s up from about 12 to 13 percent in the prior two years. The analysis included more than 47,000 clients for the first half of this year, and more than 100,000 in each of the prior years. (Federal law requires anyone filing for bankruptcy to receive counseling in case other options are available.)

With unemployment persistently high, more people have lost health coverage along with their jobs, says Michelle Jones, the agency’s senior vice president of counseling. Health costs are escalating for employed people, as well, in the form of higher premiums and deductibles. More health plans are offering lower monthly premiums in exchange for higher deductibles, but that means people find themselves on the hook for more out-of-pocket costs, if they get sick.

Read the rest of the article at the New York Times