Medical Debt in the United States

There are many reasons why people would choose the U.S. as the perfect place to start a new life. If asked, they would quote positive characteristics like, availability of opportunity, vast variety of diverse landscapes and multi-cultural cities. The U.S. has been a popular destination for immigration, let’s not forget, this is how the United States formed to begin with.

Nevertheless, the American Dream did not last long, recessions, economic instability, social inequality, police brutality etc., are all characteristics that come to mind in more recent times, but even then none of the aforementioned appears more frequently as an answer to the question “Why wouldn’t you move to the U.S.?” or “Why don’t you like living in the U.S.?”, than the healthcare system.

Many government administrations have tried to shift the paradigms towards a more European, and dare one say, humane, model of operating, but U.S. healthcare is still regarded as a largely dysfunctional institution. An institution that many view as corrupt, cruel and unfit for the developed world.

The American Healthcare System

One of the major drawbacks of the U.S. healthcare system lies with one simple fact… it is not free. Not only it is not free, but chances are that one might pay an extortionate amount of money for very simple procedures and medications. Unlike the National Healthcare System in the United Kingdom for instance, where all residents receive the same free treatment regardless of their income and insurance.

Class is definitely important to the U.S. healthcare system, with the rich being able to access world-leading medical care, and highly skilled physicians, but the poor… well it depends. The poor and employed have a chance of accessing adequate healthcare through the insurance their employers provide for them, however, things are even worse for the poor and unemployed, leading to many of them avoiding accessing medical care early, leading to easily treatable conditions becoming life-threatening.

Patient Protection and Affordable Care Act

Also known as Obamacare, the PPAACA is a healthcare system signed by former president Barack Obama in March 2010. The Act’s goal was to provide American citizens with a cheaper and higher quality healthcare system, while aiming to reduce the increase of funds invested in the U.S. healthcare system.

The Act allowed young adults to remain under their parent’s health insurance plan until the age of 26, it outlawed discrimination based on sex and more importantly it made those who profit from healthcare, accountable to someone who would be regulating their charges and general pricing.

Under the PPAACA large corporations were obliged by law to provide their employees with free health insurance, and made healthcare more accessible for poor and elderly citizens.

On the face of it the reform was welcomed, however the implementation failed to impress, with many Americans rejecting It, after the cracks on the pavement started to appear. At times, it seemed that the administration had nowhere to go and that conspiracy theories involving the Big Pharma, could actually have some valid foundation.

In any case, Obamacare is largely regarded as a good step, but it might have been a case of ‘too little, too late’. Although, since the introduction of the Affordable Care Act, there has been a significant reduction to the number of bankruptcy applications related to an inability to pay medical bills, with some 20 million people who lived without medical insurance, managing to receive healthcare cover under the new provisions.

Health Insurance in the United States

Medical Debt US

Healthcare statistics in the U.S. are clear and help reveal the sheer scale of the problem. The U.S. spends more money per capita on healthcare costs, than any other country. In fact, figures show that per person the U.S. is spending somewhere in excess of $9000.

Even with adequate health insurance, Americans still find themselves, their families and households, struggling significantly when it comes to paying off sudden medical bills. Insurance certainly makes things easier, however, it seems that insurance alone is not enough to cover the sometimes extortionate, and entirely unreasonable medical bills produced by hospitals. “Take back this $500 blanker nurse, I’d rather freeze!”

Under the circumstances, it is not surprising that a large percentage of Americans face significant financial turmoil, are unable to pay their medical bills, even after investing most, if not all, of their savings, and end up being chased by debt collection agencies that threaten them with financial ruin.

Considering how difficult it is for low-income families to meet their day to day requirements, even a small $500 medical bill, might mean that they are stretched beyond their means and on a downward debt spiral.

Although the current administration might largely disagree that healthcare should be free and accessible to all, by means of raising taxation for the richest parts of society – for obvious reasons – the fact remains, the U.S. healthcare system is in dire need of valuable reform. Some would go as far as to say that it is appalling that the leaders of the ‘free world’ find themselves opposed to such a fundamental human right; healthcare. It is that old chestnut, some might say, ‘should healthcare be a commodity or a right’?

Bankruptcies Related to Medical Debt

Medical debt affects many individuals in the U.S. every year. The burden is more impactful for the most vulnerable in our society, like war veterans, single parents, pregnant women, disabled individuals and those with chronic illnesses. In fact, 1 in 5 Americans has difficulty paying their medical bill and face the possibility of bankruptcy even after the shortest hospital stint.

It is not surprising if one considers how low the rate of increase has been for wages between 2000 and 2006 (3.8%) when compared to the whopping increase of healthcare premiums (87%).

Nevertheless, what remains surprising is that the rates of bankruptcy due to medical debt are not higher in uninsured individuals. Some would suggest that individuals and families have to carefully budget around potential illnesses, but it still seems quite utopic as a statement.

Especially when households are already struggling financially due to many other factors weighing on their livelihood, like being underpaid and not able to afford good food, working zero hour contracts, or working for tips, which fills them and their families with vast amounts of uncertainty for the future.

Therefore, it is quite clear that the suggestion of ‘careful budgeting’ for the lowest paid workers, seems somewhat otherworldly and irrelevant.

Life Stage and Medical Debt

Medical Bills US

The amount of debt due to medical bills individuals find themselves in varies significantly, with many factors affecting statistics. Though a disturbing patterns does emerge.

Upon first look, one would suppose that the elderly would more than likely be among the demographic with the highest amounts of medical bills, however, this couldn’t be further from the truth.

In America, the age bracket with the highest amount of medical debt includes the population between 35 – 44 years of age. America’s most productive age bracket faces bills that can lead to medical bankruptcy.

Many people are also refusing to take vital medication, to have children or have vital surgeries because they simply cannot afford it. All the aforementioned seem to be describing Victorian England, not America in 2018.