Medical Debt Multi-Generational Affliction

March 19, 2022

Summary: Medical debt is common and iatrogenic*, induced by un- and under-insurance. A new survey confirms that it has serious consequences, most of all for mid-life and younger demographics: Gen X (born 1965-80), Millennials (1981-96), and Gen Z (1997-2012). Boomers and the Silent Generation also feel its effects.

* Iatrogenic: Illness caused by medical interventions.

See Update below.

One in Four Gen Z, Millennials Skip Rent or Mortgage Due to Medical Debt: Survey
HealthCare.com
March 15, 2022
By Dan Grunebaum

HealthCare.com’s 2022 Medical Debt Survey shows about one in four Gen Zers and Millennials with medical debt skipped rent or mortgage payments because of their debt.

Close to half of Millennials and Gen Xers with medical debt say the debt harmed their credit score.

Two in three Gen Zers who have health insurance but still incurred medical debt say their health insurance plan didn’t cover the service they received.

More than half of U.S. adults with incomes below $25,000 and medical debt had their bills sent to debt collectors.

Comment by: Don McCanne

Because of the nation’s refusal to replace our fragmented, inequitable system of health care financing with a universal, comprehensive, equitable single payer system, it is inevitable that many individuals will face problems when they are unable to pay their medical bills. This survey describes some of those problems.

Perhaps one of the more alarming is the need to skip rent or mortgage payments thereby threatening their housing. This is a major consequence when you consider that a well-designed, universal, single payer system would totally remove the threat to housing caused by medical debt.

Some of the other risks are the obvious: damaged credit score decreasing flexibility in the marketplace, being hounded by debt collectors, decreased ability to build capital reserves for purposes such as retirement. In other words, screwed up credit merely because of the misfortune of having medical problems in a nation that has still declined to adopt a truly universal, comprehensive, equitable, progressively funded, health care financing system that we all could afford.

How can we tolerate seeing people evicted from their homes merely because of having faced medical misfortune for which our current health care financing system will not guarantee coverage? We can fix that.

Update from Editor (JGK):

This just in: credit agencies have agreed to remove paid medical debt from credit reports, thus not using it to lower credit ratings. But that doesn’t prevent the problems described in today’s post. Indeed, unpaid medical debt, and rent and credit card bills not paid due to paying off medical debts, *will* hurt credit scores. We can’t fix this broken system with band-aids.