Half of Americans fear bankruptcy due to health-related event

The number of Americans who worry about bankruptcy if they have a serious health issue has spiked over the last year and a half — particularly among men, people of color and young adults, according to a new survey from West Health and Gallup.

Concerns about medical bankruptcy have increased 12 and 9 percentage points, respectively, among adults aged 18-29 and 30-49. 55% of both groups now report being extremely concerned or concerned that a major health event could bankrupt them. Men’s concern is up 7 points to 49% and is now statistically tied with concern among women (51%).

Amid rising concerns nationally about bankruptcy arising from a significant health event, 15% of adults report that at least one person in their household currently has medical debt that will not be repaid — either in full or in part — within the next 12 months. This includes 12% of White adults and 20% of non-White adults.

Those in households earning less than $40K per year are more than four times as likely as those in households earning $100K or more to be carrying long-term medical debt (28% vs. 6%, respectively).

Implications

The sharp rise in U.S. healthcare costs, which was already a significant problem for Americans before the COVID-19 pandemic, has only been exacerbated by new challenges presented by the outbreak. In recent months, for example, 14% of Americans with likely COVID-19 symptoms reported that they would avoid care because of cost, and 88% are concerned about rising drug costs due to the pandemic. These COVID-19-related cost worries also come with a substantial racial divide.

Dovetailing with the new health-related concerns brought on by the coronavirus outbreak is the economic catastrophe that — despite the recouping of millions of jobs since May — persists in the form of 28 million people receiving some form of unemployment aid at the end of July. As such, Americans’ concerns about a major health event putting them in bankruptcy, while substantial in early 2019, are likely only intensified today because of the pandemic.

The disproportionate manner in which minorities have suffered the effects of the pandemic is reflected in higher rates of concern about bankruptcy among non-White respondents, which have jumped from 52% in early 2019 to 64% today. And the elevated level of bankruptcy concerns among adults younger than 50 corresponds with substantially higher percentages of younger adults (versus older adults) who report that a friend or family member passed away in the prior five years after not having the money to pay for needed treatment.

The troublesome confluence of the need to borrow money to pay a medical bill and subsequently carrying medical debt for a year or more comes at a time when two-thirds of Americans are reporting an increase in the price of their prescription drugs.

In the midst of this burgeoning crisis in healthcare costs and associated debt, a U.S. election looms. Despite the severe disruption the global pandemic is causing most Americans, curtailing the ongoing rising costs of prescription drugs could be an important issue factoring into their choice of candidate.

source: https://news.gallup.com/poll/317948/fear-bankruptcy-due-major-health-event.aspx

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