Experts Say This Is The No. 1 Cause Of Bankruptcy In The United States

Calculating monthly expenses for credit card debt with banknotes

Photo: Getty Images

The cost of health care in the United States has become an increasing problem over recent years, and experts are saying it is now the No. 1 cause of bankruptcy among Americans.

Yahoo Finance reports the New York-based 501 charity, RIP Medical Health, used donations to buy up people's medical debt, recently announcing a purchase of $278 million in medical debt owed by about 82,000 patients living in the Tennessee and Virginia regions.

“Medical debt is the No. 1 cause of bankruptcy in the United States, which is something that’s obviously a uniquely American problem,” said Allison Sesso, executive director of RIP Medical Debt. “So we’re out there trying to give people relief from this economic burden. We’ve got donors that are excited across the country to do more of this debt relief. That number — 278 million — we’re very proud of that, but we have a lot more debt relief ahead of us.”

The charity's recent purchase involved buying people's medical bills directly from the Ballad Health hospital system, which had previously gained criticism for using lawsuits to collect medical debt.

Sesso said most of the patients affected by the purchase are considered to be in the low-income financial bracket.

“You don’t actually have to spend all that much money to buy a whole lot of debt for people that the hospitals know can’t pay those bills,” Sesso said. “That’s exactly how it works. It’s a great return on investment. But also, importantly, it’s a huge indicator that our health care financing system is very broken.”

Credit Karma data previously provided to Yahoo Finance revealed roughly 21 million Americans holding $46 billion of medical debt as of April 2021 face collections, which involves a third-party debt collector trying to obtain the money owed by the individual.

The U.S. spends about $10,586 more per capita on health care than the next three countries -- Germany, the Netherlands and Australia -- who are reported to be far behind.

Data from the Kaiser Family Foundation shows the average single deductible in 2019 was $1,931, while the average family deductible was $3,655.

Additionally, quality health care is reported to be unaffordable to about 46 million Americans, according to a recent Gallup survey, while a LendingTree survey of 1,550 U.S. residents conducted in March, which showed the majority (60%) of U.S. residents have been in medical debt with costs ranging between $5,000 and $9,999.

You can read more information here.

Sponsored Content

Sponsored Content