Medical debt is a big price that most of us have to pay at some point in time. In fact, more than one in four Americans can’t afford to pay their medical bills. Scrounging money for a hospital stay or prescription medication can mean skimping on other basic necessities.
The average amount of unpaid medical debt per collection tradeline is $579, according to the Consumer Financial Protection Bureau. The majority of Americans say that they reduce spending on clothing, food, and other household items in order to pay this debt off.
So, how does this happen? Getting into medical debt is somewhat of a snowball effect. It usually starts with doctor’s visits. From there, doctors may order tests, which accumulate lab fees. Then, medications are prescribed based on the results of those tests. These medications may or may not be covered by insurance.
Other causes of medical debt include caretaking for an ill relative (usually a child), emergency room visits, and outpatient services.
This medical debt is not only a burden to individuals’ wallets, but also to the U.S. economy, as the U.S. government is also sharing the load in funding high medical costs. The cost of medicine is split nearly evenly between individuals, businesses, and governments.
If you’re forced to make budget cuts in order to put more money toward your medical debt, you’re right to wonder where your money is actually going. Medical care costs in the United States are spent on the treatments for various conditions, hospital care, clinical services, and prescription drugs.
17.1% of the U.S. federal budget is allocated to Medicare and 9.5% of the budget is allocated to Medicaid, according to the California Health Care Foundation.
How do U.S. healthcare costs stack up against other countries? Well, America has a bigger price tag for several medical sectors. Hospital stays, surgeries, labor and delivery, scans, and prescription drugs are all higher on average in the U.S. than comparable countries, including Australia, Switzerland, and the United Kingdom.
Comparing healthcare costs in the U.S. to other countries suggests some healthcare reform may be necessary. Perhaps the first step toward getting out of debt is to understand the severity of the issue. Healthcare costs are expected to continue rising, putting more Americans at risk for accruing debt. Share these statistics with friends and family to educate your loved ones on how to prepare for medical debt and influence policy changes in the future.