Report: high cost of medical care is a heavy burden for young adults

February 28, 2013

Report: high cost of medical care is a heavy burden for young adults

Article provided by William G. Schwab and Associates
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The high cost of medical care is an unpleasant fact that many struggle with in Pennsylvania and elsewhere. Although many political solutions have been offered, many Americans still find that they have to choose between rent and medicine. This fact was echoed in a recent report by the Commonwealth Fund that concluded that millions of young adults are foregoing necessary medical care because of its high costs.

The report found that 41 percent of adults between age 19 and 29 decided not to get medical care within 12 months because of the costs. To save money, the young adults instead elect to skip doctor visits, refuse recommended tests and leave prescriptions unfilled.

When the young adults do receive medical care, medical debt weighs heavily on their finances. The report found that 36 percent of 19-29 year olds reported problems paying medical bills or said that they were making payments over time. Among those with medical debt, 43 percent said that they had used up all of their savings to pay the bills; 33 percent took on additional credit card debt; and 32 percent were unable to make student loan or tuition payments because of medical debt.

The report also found that for many young adults, medical debt was stunting their life plans or seriously affecting their lifestyle. Thirty-one percent reported that they had delayed career or education plans because of medical bills. An additional 28 percent said that medical bills left them unable to pay for life's necessities like food or rent.

Bankruptcy: a possible solution

For many adults, both young and old, who are overburdened with medical debts, young and old, bankruptcy may be a solution to their seemingly hopeless financial situation. Individuals in these circumstances can typically file for either Chapter 7 or Chapter 13 protection. Each type of bankruptcy has its own advantages and eligibility requirements.

In Chapter 7 bankruptcy (also called liquidation), a trustee sells all of the debtor's property that is not exempt by law to pay creditors. Once the property has been sold, the court grants the debtor a discharge of many types of unsecured debt, including medical bills. Once the discharge has been granted, the debtor is not under any obligation to pay back most debts, even if the debt was not fully paid for by the sale.

Debtors who have regular income are eligible for Chapter 13 bankruptcy. In this type of bankruptcy, the debtor keeps his or her possessions while his or her debts are reorganized into an affordable payment plan. Once the plan is in place, the debtor makes payments under the plan for three to five years, often only paying a fraction of his or her debts. Once the debtor has finished making the required payments under the plan, he or she receives a discharge of the remaining unsecured debt. This relieves the debtor of any obligation to pay the outstanding balance.

As bankruptcy is a complicated area of the law, the decision to file for bankruptcy should not be taken without competent advice. If you are overwhelmed with medical debt, contact a knowledgeable bankruptcy lawyer. An attorney can advise you on the right debt relief option for your individual situation.