Significant medical debt can certainly lead to bankruptcy. In fact, medical debt is a huge problem for many Americans. According to some reports, medical debt exceeds debt from credit cards, utilities, auto loans, and other sources combined.
How many years have we heard about the federal government addressing this problem? For me, the issue of medical debt has all talk with no solutions. Maybe we have a step in the right direction.
On April 5, President Biden issued Executive Order 14070 “to protect and strengthen Medicaid and the Affordable Care Act (ACA) and to make high-quality healthcare accessible and affordable for every American.”
What Does This Mean?
Health and Human Services Secretary Xavier Becerra does an excellent job of distilling the financial implications of President Biden’s executive order. The government is committing to expanding Medicare coverage as those with it typically accrue less medical debt. Medical debt also impedes upward economic mobility, and its stratification spans race, health status, and income levels. As a result, it most often affects people of color, those in poorer health, and lower-income households.
Worse still, medical debt collectors leverage your credit report against you. Consumer Financial Protection Bureau (CFPB) director Rohit Chopra wants to change this. Understanding medical billing is a Herculean task. Determining which provider is in-network (or not); separate billing by provider and facility; and hard to understand medical codes are confusing to most patients.
And the effects are far-reaching. Not only can such monumental debt lead to bankruptcy, but so much weight is put on credit scores that it may be difficult to obtain employment or secure housing. This affects both renting and purchasing.
In short, this President Biden’s Executive Order does not offer immediate debt relief. However, it promises to assess current laws and practices with the intent of implementing improvements in the future. I outlined the medical debt bankruptcy process in New Jersey in my previous blog. Although it was written several years ago, it is even more relevant today in the wake of the Covid-19 pandemic and its subsequent economic impact from unemployment, inflation, and the continuing accrual of medical bills.
If you’re struggling beneath the weight of medical debt, considering bankruptcy, or hoping to boost your credit score, contact my office today. We will help find solutions for you. And treat you with dignity and compassion.