Probing Into The Reasons For Increasing Millenarian Health Care Debt

When you look at the stats regarding health debt you may tend to think why millennial racks up so much debt in health care and medical treatments more frequently. Is it due to the low income and their inability to pay the bills or is it simply due to the catastrophic illness that people face in their later stages of life? No matter what people imagine and how they reason medical debts, this happens to be the most interesting subject for research for many organizations and institutions.

According to a recent study it is revealed that a millennial carry a larger amount of such specific types of debtsand they incur it more frequently that the older Americans! This fact resulted in further studies conducted on the trends in the Census data and the reports published in the Health Affairs.

When the data is compared with the credit records of more than 4 million Americans from the Consumer Credit Panel of the Consumer Financial Protection Bureau or CFPB it was found that in most of the cases this debt originated from a pastdue bill in a health care setting or somewhere else. It was found that:

  • One in six Americans have such health care bills that are past their due and are mentioned in their credit reports
  • The total debt amount was at a staggering $81 billion in all and
  • More than 53% of all these bills typically amounted to less than $600 each.

All these facts and findings are in accordance with the 2017 report prepared by the Urban Institute. All these finding along with the plethora of bankruptcy reports and debt settlement reviews it can be concluded that medical debtsare the most common form of debt collections and have become a significant financial burden for the United States. The report also found that:

  • The health care expenses amounts to 18% of the gross domestic product of the nation and
  • Among all people having at least one medical bill in collections, 11% were the young person aging about 27 years which is typically the largest share.

There is one thing that these facts point out and that is 27 years is just one year after a childloses his or her eligibility for health insurance coverage of their parent according to the Affordable Care Act.

Peculiarities of medical debt

This is a very important aspect for the policymakers to remember, the economists say. This is due to the peculiarities of medical debt. According to the economists, it can be said that medical debts can take many forms and can be accrued in different ways such as:

  • A person can rack it up while using a credit card to cover their medical bill and do not pay it off on time
  • Debts can also form when a medical bill is paid by a person then a specific utility bill or car their car loan account goes to the collections and sometimes and
  • Debt is even formed when the hospitals waive off costly medical payments that they never expect to receive when it is delivered in the form of charity care.

Most of the researches and studies are not conducted taking all these forms of medical debt but are done primarily on the past-due medical bills that may or not be turned over to a third party agency for collection.

Insurance and medical debt parallels

Experts say that there are parallels between medical debt and insurance and needs to be looked into very carefully. Considering people between ages 27 and 45 in a study it was found that the rate of people who admit to have no health insurance falls to about 30%. This is when the medical debt also starts to drop as well.

  • This significant figure indicates that something serious must be done quickly to find out ways in which health insurance can be made more affordable and more attractive.
  • Efforts must also be doubled focusing on the people belonging to that age group of 44 years and under so that they can cope up with the chronic diseases that are more commonly seen in people falling in to this group.

Medical debt is no doubt pervasive but it did not happen overnight. It is also due to the role of health care as well as the management of personal finances by the Americans that has resulted in a lockstep when you consider the bigger budgetary picture of the United States.

Driving down medical debt

Given the present infrastructure and scenario it is not easy to drive down medical debts of a country. It is required to spruce up the insurance policies and structure so that the need of insurance by more citizens can be met with.

In addition to adequate insurance, several studies such as National Health Interview Surveyconducted by the Centers for Disease Control and Prevention every year since 1957 show that the initial three-quarters of Americans of the age group of 20 and 65 years admitted that they could not pay their medical bills even after being insured.

This means that the policy makers need to work out to figure out the ways in which such medical debt trends can be reversed. Few of the experts say that:

  • It is required to do more so that the millennial can confront chronic illnesses such as diabetes and hypertension which comprises of the major chunk of the total health care spending of the Americans.
  • It is also required to align the medical debt trends among the young Americans to prevent the stagnating of wealth for the younger generations now as compared to the olden times when the parents and grandparents enjoyed more flexibility.

If you compare the wealth accumulation graph of now and that of 1980s you will find that it has only gone up by an inch. This is driven by different factors and one such is medical debts apart from student loans. Therefore,health care issue and the cost of foregone care are just instances of a larger financial instability.

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