Why your fear of medical debt is entirely justified


(Flickr / 401kcalculator.org)

In an age of expanded health insurance coverage, being able to pay your medical bills could still be a major headache.

One in four people say their medical debt exceeds their emergency savings, according to a new survey published today. The problem is even more acute among low-income people, as you might expect. Nearly half (44 percent) of those earning less than $30,000 per year say their emergency savings are eclipsed by medical debt, according to the Bankrate survey. And most people (about 55 percent) say they're worried that they won't have enough savings to pay their medical bills.

The survey is a reminder that being able to pay medical bills is still a huge problem with plenty of consequences — whether it means people can't actually afford the care they need or they can't pay for other necessities. Medical debt was the top reason for individual bankruptcy filings in 2013, according to a study earlier this year from Nerd Wallet, a personal finance Web site.

Starting this year, the Affordable Care Act places new limits on patients' out-of-pocket spending. But can the law actually put a stop to medical bankruptcies? Probably not.

About 40 percent who purchased new coverage under Obamacare said they're struggling to pay premiums. A study of Massachusetts' coverage expansion, which was the basis for the ACA, found medical bills still contributed to about 52 percent of bankruptcies.

It's also true that many people still aren't aware of the financial assistance, such as tax credits, available to them through Obamacare — help that could make paying medical bills a little more doable.

Jason Millman covers all things health policy, with a focus on Obamacare implementation. He previously covered health policy for Politico.
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