Medical Debt Epidemic Creates $41 Billion in Unpaid ... - Bankruptcy

By John Clark

According to a Forbes report, unpaid medical debt accounted for more than $41 billion in outstanding health care bills in 2011, which likely rivals the amount patients owed last year, as well.

After collecting comprehensive data from every health care field, the American Hospital Association announced this week that patients still owed $41 billion for health care at the end of the last calendar year, which is a five percent jump from the previous twelve months.

And the incredible amount of medical debt reveals why so many Americans have opted to file for Chapter 7 bankruptcy in order to tackle their growing health care expenses.

Weak Economy Contributes to Rising Medical Debt

Sources say the weak economy, as well as the rapidly aging American population, helped contribute to the $41 billion sum. Notably, this figure is nearly double the amount of medical debt held by patients in 200.

In addition to the weak economy, high levels of unemployment forced many Americans to skip payments on medical debt in order to meet other basic costs, including food, housing, and transportation.

According to the American Hospital Association, the lack of reimbursement for medical care forced several health care providers to close their doors in 2012, despite rising patient demand.

Last year, the number of hospitals in the United States dipped slightly from 4,985 to 4,973, although most of these closings were a result of mergers and other types of consolidation.

And hospitals fear that 2013 will be another dark year for the finances of medical providers, as they will continue to have to provide uncompensated care to many patients while they wait for the implementation of the Affordable Care Act in 2014.

Health Care Providers and Patients Await Political Reform

Recent political reforms, however, have given both hospitals and patients hope that the medical debt crisis could be coming to a close.

In January 2014, private insurance companies will be obligated to offer subsidized health insurance to individuals and small businesses through exchanges that will be regulated by the federal government.

Moreover, most states (at least the ones that opt into the program) will expand their Medicaid coverage for indigent patients. This, in theory, will reduce the debt load of working Americans, and ensure that hospitals are compensated for the services they provide.

In practice, some observers are skeptical that the insurance exchanges will truly reduce health care costs, but many other analysts are eager to see whether the Affordable Care Act will live up to its potential.

Source: http://www.clearbankruptcy.com/blog/medical-debt-epidemic-creates-41-billion-in-unpaid-hospital-bills/

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