More than one-third of respondents to a survey conducted by the education arm of a financial institution are carrying medical debt, and 82% of those people are having problems paying it off, according to a report highlighting the survey’s findings. For those who have medical debt, 70% said that the debt is either overdue or has been placed with a collection agency.
Those most likely to be carrying debt and having trouble paying for it are younger individuals, women, and those making less than $100,000 per year.
About 25% of individuals have used up all of their savings to pay for medical debts, and 40% have experienced an unexpected medical event in the past year. Among those who have, 70% had trouble paying for it.
The survey was conducted by Regions Next Step, a financial education program run by Regions Bank.
For those carrying medical debt, everyday expenses like food, clothing, and transportation were the biggest barriers to making payments, while other issues — like mortgage or rent payments and the financial impact of the pandemic were also causing problems.
When asked how they would cover an emergency medical expense of $1,000, 20% of respondents said they would dip into their emergency savings, 21% said they would use their credit cards, and 19% said they would pay in cash.
More troublesome is that 54% of respondents don’t know hot to obtain debt relief from medical bills, 49% don’t use flexible spending or health savings accounts, and 48% don’t negotiate the amount of their medical bills.
“Medical events can be traumatic and unpredictable – and the resulting debt can add greater stress to the healing process. Being prepared beforehand and knowing how to address medical debt can make a significant difference to staying on track with your finances,” said Joye Hehn, Next Step financial education manager for Regions Bank.
