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Medical Debt, a Uniquely American Problem

Posted by Théda Page | Jun 07, 2023 | 0 Comments

National Cancer Survivors Day is held annually the first Sunday in June. In Texas, the MD Anderson Center will host a series of classes, events, seminars, and more online during the week of June 4-10, 2023. The Cancer Support Community of North Texas will continue its work helping Texans impacted by cancer. And throughout our state, families will struggle with medical debt resulting from a dreaded diagnosis. Medical debt is a uniquely American problem, but bankruptcy could be a solution.

Uniquely American, Really?

America is the only developed nation that saddles its citizens with crippling medical debt. Don't take our word for it; the affirmatively capitalist magazine Fortune says so. Every other developed nation (from tiny Cuba to powerhouses like Germany) socializes medical debt by having the government pick up the tab for expensive procedures and operations. That tab is spread uniformly among the citizens through national taxes. Families in those developed nations do not pay for medical care the way families in Egypt, Afghanistan, Iran, Nigeria, and America do.

America's solution? Having local municipalities and charities buy up medical debt for pennies on the dollar and relieve the families of the financial stranglehold. It's a workaround for a crisis of national impact.

How Much Debt?

Some will say such talk of America's medical debt is a wild exaggeration. How can every other country erase medical debt while the United States, the world's leading economy, cannot? Surely the problem is not very significant. Right?

Wrong. The Stanford Institute for Economic Policy Research (SIEPR) noted in 2021 that the almost-universally accepted dollar value of Americans' medical debt — $81 billion — was incorrect.

The figure is closer to $140 billion.

That's roughly the cost of dealing with 20 weather and climate disasters. It's the total value of the recreational vehicle industry. It's what the U.S. chocolate business is worth.

That's a heckuva burden for struggling American families — faced with cancer diagnoses, physical therapy regimens, nauseating pharmaceuticals, and daily setbacks — to handle. Many families simply cannot handle the medical debt. They try to ignore creditors, tear up hospital bills, or endure sleepless nights.

Forbes says Texas ranks #27 for medical expenses, with every Texan shouldering an average of $8,048 in annual health care costs. More than 16 percent of Texans avoided seeing doctors because of cost.

Does Bankruptcy Help?

Texas provides some small tools to deal with medical bills. Legislation to prevent surprise medical billing has worked its way through the part-time legislature. Medical billing transparency legislation is slinking forward, with a goal of providing patients with an itemized list of charges in layman's terms.

In the meanwhile, until something changes, bankruptcy is one of the few readily available ways to get out from under crushing medical debt.

In personal bankruptcy, your two most commonly pursued options are Chapter 7 bankruptcy or Chapter 13 bankruptcy:

  • Chapter 7 — Your medical bills are unsecured debt, like credit card and store card debt and payday loans; those medical bills are eligible for discharge at the end of the process, and if you used a bank charge card to cover medical bills, those credit card charges are also eligible for discharge
  • Chapter 13 — Under Chapter 13 bankruptcy, you will generally pay only part of what your medical debt is, with monthly repayments based on your disposable income; medical debt is paid from disposable income with your other unsecured debts only after priority and secured debt (your taxes and mortgage arrears, for example) is paid

At the same time families contend with gut-wrenching decisions over cancer treatment, they have to face a steady trickle of bills, bills, bills. While most Texans would nobly handle everything coming their way, most Texans simply can't pay $2 million medical bills.

Bankruptcy can help you and your family find relief from formidable medical bills, reducing the stress and anxiety you all feel from the crushing debt. A bankruptcy attorney can prevent medical creditors from harassing you, forestall collections, prioritize your debts and preserve your assets.

But a Frisco bankruptcy attorney can do nothing to help you with medical debt until you reach out. Contact us today at The Page Law Firm in Frisco, or call our offices today at 214-618-2101. Get out from under the heap of medical bills and concentrate on getting your family members better!

About the Author

Théda Page

Théda Page's practice of law is motivated by the desire to help people through difficult circumstances. She spends time with her clients in order to understand their needs so that she can provide them with comprehensive and quality representation.


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