It has been widely estimated that consumers have been shouldering around $81 billion in medical debt that they can’t afford to pay.
The reality is much, much worse.
That $81 billion figure has been frequently cited, but a study by a Stanford University economist shows that Americans have a minimum of $140 billion worth of medical debt. Even more distressing is the revelation that the debt load is hitting people who are already impoverished the hardest.
Previous studies only looked at a narrow definition of medical debt among a select sample of people. Now that the study has been broadened, the debt load can be tied directly to the decision of many states to restrict Medicaid benefits.
In states that expanded Medicaid, the medical debt load dropped roughly 50% from where it was in 2013. By comparison, medical debt only declined 10% in states that didn’t expand benefits – and the debt that is there is disproportionately allocated among the poorest people.
Unpaid medical bills are not only the number one reason people have debt collectors breathing down their necks, but they also exceed all other types of debts in collections combined.
The researcher who began the study said that he was motivated by the widespread exposure given to that old $81 billion figure in the last presidential election. If that figure shocked the sensibilities of many and provoked significant debates about medical debt, this new study should really open a few eyes.
If you’re drowning in debt (medical or otherwise), you have options. There’s no shame in exploring debt elimination options, including bankruptcy.