Mounting medical bills are expected to push 1.7 million U.S. households into bankruptcy this year - making health expenses the largest cause of such filings.
The number outpaces bankruptcies resulting from credit card bills or unpaid mortgages, according to data analyzed from the U.S. Census, Centers for Disease Control, federal court system and the Commonwealth Fund, a private foundation that promotes access, quality and efficiency in the medical system. NerdWallet Health, a division of the price-comparison Web site, analyzed the data.
Even those who dont file for bankruptcy struggle to pay their bills. NerdWallet found that about 56 million adultsmore than 20% of the population between the ages of 19 and 64will grapple with payments. Health insurance plans won't necessarily shield consumers against financial hardships. NerdWallet estimates that nearly 10 million adults with health insurance coverage will still accumulate medical bills they can't pay off this year.
High-deductible insurance plans requiring consumers to pay more out-of-pocket costs are a challenge for many households.
"Medical bills can completely overwhelm a family when illness strikes, NerdWallet Health Vice President Christina LaMontagne said in a statement.
She added that 25 million people hesitate to take their medications to control medical costs.
"That statistic is actually quite troubling," LaMontagne said. Delaying needed medication is a short-term fix that could trigger result in expensive visits to the emergency room and ambulance visits, she said.
"With an average American family bringing home $50,000 in income, a high medical bill and a high-deductible insurance plan can quickly become something they are unable to pay," LaMontagne said. "If you have an out-of-pocket maximum of $5,000 or $10,000, that's really tough," he said.
While health-care reform will give more people coverageNerdWallets data shows that millions of Americans, who do have year-round coverage, are still overwhelmed by mounting bills, LaMontagne said.
The number of households forecast to file for medical-related bankruptcies this year is slightly lower than those at the height of the recession. Despite the anticipated 2013 dip, such bankruptcies represent about three out of every five filings.
"A lot of Americans probably think about bankruptcy as coming from unpaid credit-card debt or mortgages," LaMontagne said. "But the root cause of all those troubles may well be medical bills."
Not surprisingly, more than 11 million people will take on additional credit-card debt to cover mounting medical bills, LaMontagne said. Because credit cards often charge high interest rates for unpaid balances, debt only mounts, creating a vicious cycle for consumers.
Meanwhile, NerdWallet found, 15 million people will deplete their savings to cover medical bills. Another 10 million will be unable to pay for necessities such as rent, food and utilities because of those bills.