NerdWallet Health Estimates 56 Million Americans under 65 will Struggle with Medical Bills in 2013
by christina on June 19, 2013 - NerdWallet Health
One in five American adults will struggle to pay medical bills this year. A
sudden accident or frightening diagnosis can touch virtually anyone, unleashing
mountains of bills even on the insured. In fact, medical bills are the leading
cause of personal bankruptcy, a last resort after millions of families have
drained their savings, maxed their credit cards and even refinanced their homes.
To further understand the complexity of health costs, NerdWallet Health has
compiled a series of estimates highlighting the strain of medical bills in 2013.
Summary Findings
NerdWallet estimates for 2013:
- 56M Americans under age 65 will have trouble paying medical bills
–
Over 35M American adults (ages 19-64) will be contacted by collections
agencies for unpaid medical bills
– Nearly 17M American adults (ages 19-64)
will receive a lower credit rating on account of their high medical bills
–
Over 15M American adults (ages 19-64) will use up all their savings to pay
medical bills
– Over 11M American adults (ages 19-64) will take on credit
card debt to pay off their hospital bills
– Nearly 10M American adults
(ages 19-64) will be unable to pay for basic necessities like rent, food, and
heat due to their medical bills
- Over 16M children live in households struggling with medical bills
- Despite having year-round insurance coverage, 10M insured Americans ages
19-64 will face bills they are unable to pay
- 1.7M Americans live in households that will declare bankruptcy due to
their inability to pay their medical bills
– Three states will account for
over one-quarter of those living in medical-related bankruptcy: California
(248,002), Illinois (113,524), and Florida (99,780)
- To save costs, over 25M adults (ages 19-64) will not take their
prescription drugs as indicated, including skipping doses, taking less
medicine than prescribed or delaying a refill
gIn 2013 over 20% of American adults are struggling to pay their medical
bills, and three in five bankruptcies will be due to medical bills. While we are
quick to blame debt on poor savings and bad spending habits, our study
emphasizes the burden of health costs causing widespread indebtedness. Medical
bills can completely overwhelm a family when illness strikes,h says Christina
LaMontagne, VP of Health at NerdWallet. gFurthermore, 25 million people hesitate
to take their medications in order to control their medical costs. Unfortunately
this can lead to even worse financial outcomes as preventative treatments are
not rendered and patients end up using expensive ambulance and ER care as their
health worsens.h
Finally, many question whether President Obamafs universal health insurance
mandate will protect Americans from problems with medical bills. gInsurance is
no silver bullet,h says LaMontagne. gEven with insurance coverage, we expect 10
million Americans will face bills they are unable to pay.h
Methodology & Sources
Baseline estimate of US population in 2013: We estimated the
population based on US census data for total population at the beginning of 2013
and the growth rate between 2012 and 2013, which we halved to reflect average
population for calendar year 2013. All numbers were calculated off this
figure.
Americans (adults & children) struggling with medical bills:
There is significant variation in estimates offered by the US government,
non-profits and think-tanks. We used the most conservative, government provided
statistics released this month from the Center for Disease Control.
Bankruptcy: We relied on a widely cited Harvard study published in 2009. NerdWallet Health chose to
include only bankruptcy explicitly tied to medical bills, excluding indirect
reasons like lost work opportunities. Thus we conservatively estimated medical
bankruptcy rates to be 57.1% (versus the authorsf 62.1%) of US bankruptcies. We
also used official bankruptcy statistics, released this month through March
2013, from US Courts.
Behavior data (use of savings, credit cards, and prescription
management): We used a 2013 Commonwealth Fund report that provided percentage estimates
of affected adults and applied these figures to our base affected population
numbers.
Prescription drug use: Here we used Center for Disease Control data from 2011 and scaled them to
2013 population figures.
About NerdWallet Health
NerdWallet Health provides transparency to patients,
empowering them to choose better and more affordable health care. NerdWallet
Healthfs newly launched Hospital Price
Comparison tool allows individuals to study hospital prices in their region.
Please consult a health professional for medical advice.