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Medical debt remains top reason for declaring personal bankruptcy

Health care has been one of the most popular topics of discussion over the last few years. Everyone knows that the cost of receiving medical care is rising, which is a major problem for many families. In fact, a report from USA Today points out that medical debt is the number one reason why people seek the relief of bankruptcy.

Even with health insurance, people still might face significant out-of-pocket costs for medical visits. USA Today looked into the financial issues related to health care and found that high-deductible health insurance plans can create a strain for lower- and middle-income families.

Under the federal health insurance exchange, created as a result of the Affordable Care Act, the average plan still has a $3,000 deductible. Under the least-robust plans included in the exchange, the overage deductible is more than $5,000 according to USA Today. Massachusetts is running a state-based exchange, but the same principle applies: Many families may not have extra cash on hand to cover their deductible in the case of a medical emergency.

Of course, this post isn't designed to provide any sort of political commentary about the Affordable Care Act. Instead, it's simply to demonstrate that medical debt can still become a major problem for many families, even with reforms going into effect.

Although medical care can be costly, it's an expense that’s often unavoidable. Without the liquid assets on hand to pay a deductible out of pocket, medical expenses will likely become debt. Unable to finance those expenses, a person’s hospital bills could go to collection. At this point, seeking debt relief options may be necessary to move forward and continue to receive necessary medical care.

Source: USA Today, "Medical debt will persist despite health law," Jayne O'Donnell, and Paul Overberg, Jan. 15, 2014

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