A recent study found that people who are diagnosed with cancer are 2.5 times more likely to declare bankruptcy than those who are not diagnosed with cancer. The study tells many Florida residents what they already know too well – that medical debt can lead to serious financial problems in the midst of a health crisis.
The problem is particularly serious for younger people who are diagnosed with the disease, since they generally have fewer savings and fewer assets to rely on if they face mounting medical debt. They also may not have complete health insurance coverage because of a lower level job or not qualifying for Medicaid. Older Americans typically have some savings to fall back on and have Medicare coverage for the intensive treatments that cancer requires.
In fact, younger people were 10 times more likely to declare bankruptcy after a cancer diagnosis. The type of insurance that someone has also plays a major role. Previous research has found that about three-quarters of people who say that medical debt played a role in their bankruptcy had private insurance at the time that they were diagnosed with a disease.
Medical debt can be discharged during the bankruptcy process, so people who find themselves in this difficult situation should know that there is a way out. A debt discharge may be available in certain situations or it may be possible to discharge a portion and restructure the remainder. Results in each case will depend on the specific circumstances of the person seeking relief. Restructuring debt can help relieve stress and make it easier to focus on the healing process.
Source: NBC News, “Cancer increases bankruptcy risk, even for insured,” Barbara Mantel, May 15, 2013.