We have all heard about how unemployment rates have ballooned since shelter in place orders in March of 2020. 13.3% of Californians found themselves unemployed in July alone. With a loss of work, comes a loss of employer-paid health coverage. Most unemployed are struggling to make ends meet let alone afford out of pocket health coverage or a COBRA benefit extension. Worse yet, many individuals not covered by health insurance due to their recent loss in employment are racking up thousands of dollars in Medical bills. Since the start of the pandemic in March, there has been a 7% increase in Medical Debt reported to consumer credit reports.

In Collections

Credit Karma performed an analysis of its 20 million members and found that $45 billion of medical debt is currently in collections. This averages out to about $2,200.00 per person. However, given that a vast majority of medical debt is often not reported to collections, $45 billion could be just the tip of a massive iceberg. Experts are predicting this number to drastically rise since medical debt needs to remain unpaid for 180 days (6 months) before it is reported to consumer’s credit reports.

It has been reported in USA Today that two-thirds of those who file for bankruptcy cite medical issues as a factor that encouraged them to file. This has been confirmed by the American Journal of Public Health who surveyed those who filed for bankruptcy between 2013 and 2016.

For more information contact your Stockton bankruptcy attorney at 209-952-0355.

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