Medical Debt Update: Struggling Consumers Cut Health Care Spending
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Medical Debt Update: Struggling Consumers Cut Healthcare Spending


As the economy remains stuck in first gear, Americans have tightened their wallets and reduced their spending on clothing, entertainment and transportation. Surprisingly, consumers have also reduced their spending on health care, sometimes quite dramatically.

According to a study published by the National Bureau of Economic Research, Americans have “reduced their routine medical care” by a much larger margin during the recession than people in Britain, Canada, France and Germany.

The statistics gathered by the researchers paint a rather dour picture of medical care spending:

  • Among Americans polled by the researchers, 26.5 percent claimed to have reduced their spending on basic medical care since 2007, when the global recession first caused financial hardship.
  • This number far exceeds the percentage of people who have reduced medical spending in other countries, including 7.6 percent in Britain, 5.3 percent in Canada, 10.3 percent in Germany, and 12 percent in France.
  • Cuts in spending were generally related to the size of out-of-pocket costs, as residents of America, who have much higher out-of-pocket limits, were unable to afford rising medical expenses.
  • Cutbacks in the use of routine medical care were most common among people with lower incomes, people who had lost a large amount of their wealth during the recession, and the young.
  • Roughly 15 percent of Americans do not have health insurance, and these uninsured people account for a large percentage of people who were forced to cut back on routine medical spending during the recession.

This study’s results aligned with the findings of a recent survey performed by the American Hospital Association, which found that the recession has had a significant effect on the country’s medical providers.

According to its report, “[a]bout 70 percent of hospitals report fewer patient visits and elective procedures as family budgets remain tight and patients continue to delay or forgo care.”

The numbers are significant for two reasons. First: Ignoring primary and preventive medical care often leads to more serious - and more expensive - problems in the future. But clearly, medical bills are at the front of many minds, as medical bills continue to be a leading cause of bankruptcy. The most recent reports list medical bills as a major factor in 60 percent of all bankruptcy filings.

Impact of New Health Care Law on Medical Debt

According to reports, the new health care law could ameliorate some of the impacts of the recession on Americans’ ability to afford routine medical care and pay their medical bills.

By the end of this decade, the law is supposed to provide insurance coverage for more than 30 million people who are currently uninsured. Further, the law will provide subsidized coverage for people with income up to four times the poverty level.

In addition, the new law aims to prevent insurers from charging deductibles or co-payments for routine preventative services, such as colonoscopies, mammograms and immunizations. Such a law will likely reduce the impact of tough economic times on the use basic health care services.

If increased medical costs have ruined your finances, consider contacting a personal lawyer to see if bankruptcy could help you handle your medical costs.

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