Medical Debt Linked to Worse Health Status, Increased Mortality for Black Americans

(HealthDay News) — At the county level, medical debt is associated with worse health status, premature death, and increased mortality rates, according to a study published online March 4 in JAMA Network Open.

Xuesong Han, Ph.D., from the American Cancer Society in Atlanta, and colleagues conducted a cross-sectional study at the U.S. county level to examine the associations of medical debt with health status, premature death, and mortality. The analysis included data from 2,943 counties.

On average, 19.8 percent of the population had medical debt. The researchers found that a 1-percentage point increase in the population with medical debt was associated with 18.3 and 17.9 more physically and mentally unhealthy days, respectively, per 1,000 people during the past month after adjustment for county-level sociodemographic characteristics, and with 1.12 years of life lost per 1,000 people and an increase of 7.51 per 100,000 person-years in age-adjusted all-cause mortality rate. For all leading causes of death, including cancer, heart disease, and suicide, associations of medical debt and elevated mortality rates were consistent (1.12, 1.39, and 0.09, respectively, per 100,000 person-years).

According to the Commonwealth Fund, one in three Black Americans have medical debt.

“Patients are increasingly burdened by high out-of-pocket costs for health care in the U.S., including problems paying medical bills and medical debt,” Han said in a statement. “Our findings reinforce medical debt as an important social determinant of health, which, unfortunately, may threaten public health in the country.”

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What is medical debt?

Medical debt are financial obligations as a result of receiving medical care, treatments, procedures, or medications. It arises when patients are unable to cover the full cost of their medical expenses out of pocket and must rely on payment plans, loans, or credit cards to settle their bills. This debt can come from various sources, including doctor visits, hospital stays, surgeries, prescription medications, and medical equipment.

Several factors contribute to growing medical debt, including high health care costs, lack of adequate insurance coverage, co-payments, deductibles, and out-of-network charges. Even individuals with medical insurance can find themselves saddled with medical debt due to policy limitations, unexpected medical emergencies, or gaps in coverage.

Medical debt is a significant financial strain for many individuals and families, often leading to financial instability, stress, and even bankruptcy. It can have long-lasting consequences, affecting credit scores, hindering access to future health care, and jeopardizing overall well-being.

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Does bankruptcy clear medical debt?

Filing for bankruptcy can relieve some medical debt, but it depends on the type of bankruptcy filed and the specific circumstances.

Chapter 7 bankruptcy, also known as liquidation bankruptcy, may discharge most unsecured debts, including medical bills. However, certain assets may be sold to repay creditors, and not all debts are eligible for discharge.

Chapter 13 bankruptcy, also known as reorganization bankruptcy, creates a repayment plan to settle debts over three to five years. Medical debt may be included in this plan, allowing individuals to repay a portion of what they owe, potentially at a reduced rate.

Can medical debt affect your credit?

Medical debt can definitely affect your credit. When you don’t pay your medical bills, medical providers may send the debt to collections agencies, which can report the debt to credit bureaus. Once medical debt appears on your credit report, it can lower your credit score.

The impact on your credit score depends on various factors, including the amount of medical debt, the number of accounts in collections, and your overall credit history. Delinquent medical debt can remain on your credit report for up to seven years, negatively affecting your ability to obtain credit cards, loans, or favorable interest rates.

However, it’s worth noting that some credit scoring models, such as FICO Score 9 and VantageScore 4.0, weigh medical debt less heavily than other types of debt, recognizing that medical expenses can be unforeseen and sometimes unavoidable. Additionally, newer scoring models may disregard paid medical collections entirely.

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