Report Ties Medical Debts to BK Filings

Offering a “microcosm” of the “national problem” of the financial issues caused by illness and injuries leading to individuals being forced to file for bankruptcy protection, a state consumer advocacy group has published a report detailing that 60% of bankruptcy filings included some form of medical debt.

The report, which was issued by the OSPIRG, one of two dozen state groups affiliated with the U.S. Public Interest Research Group (PIRG), is available by clicking here. It looked at 8,000 individuals who filed for bankruptcy protection in Oregon during 2019, before the COVID-19 pandemic hit the United States.

Of those who had medical debts listed on their bankruptcy petitions, 15% had at least $10,000 and the median amount was $2,326, according to the report. Three percent of filers reported medical debts that exceeded their annual income.

“We have a societal obligation to make sure a broken leg doesn’t break the bank,” said Patricia Kelmar, Health Care Campaigns director for PIRG, in a statement. “Someone who needs medical care isn’t a consumer who’s accumulated debt with foolish purchases. These folks need a hug and time to recover — not some debt collector harassing them.”

The report details that demographic variables, like whether individuals had health insurance, or how much money they made, did not necessarily play a role in keeping individuals from having to file for bankruptcy protection.

Interestingly enough, the most frequently listed debt holder for medical debts on bankruptcy petitions in Oregon was not a healthcare provider, but CareCredit, a credit card for healthcare offered by Synchrony Bank.

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