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Study: Young adults owe medical debt too

There has been a great deal of focus on the effect of student loan debt among America's youth. But like any other age group, student loans are not the only debt issue that young Americans face. Cincinnati bankruptcy lawyers know that many Ohio residents face a mountain of medical debt.

A recent study shows that, nationwide, nearly 40 percent of people between the ages of 19 and 29 did not have health insurance in 2011. Not surprisingly, roughly 36 percent of young adults in that same age group face some form of medical issue, or carries medical debt. Of those with medical debt, 43 percent of the young adults have fallen into financial distress due to medical bills.

Bankruptcy attorneys all across the country have long known that a medical issue is often a factor for people who are considering bankruptcy. Insurance coverage may help many consumers with medical costs, but even those with coverage can face enormous medical bills after a medical emergency, or injury.

The recent survey, conducted by the Commonwealth Fund, shows that many young adults between the ages of 19 and 25 have stayed on their parents' health plans. But despite the politically volatile state of health insurance in the United States, many young adults have racked up medical debt. Of the young adults responding to the survey who have fallen into financial distress from medical debt:

  • 32 percent cannot make their student loan or tuition payments
  • 31 percent have decided to delay pursuing education or possible career plans
  • 28 percent cannot pay for basic necessities, such as food, heat or rent

The financial issues have the common thread of excessive medical debt as a source of distress.

It is important to note that the study was conducted by a foundation focused on health care issues, including health care insurance. Like many studies, the data is essentially confined to one type of debt--in this case medical debt. But an important take-away from the study involves the concept of what can cause distress on a household budget.

Generally, a person suffering financial distress may have many types of debt. Many with medical debt may also carry significant credit card debt and other types of unsecured loans. Wage garnishment and bank account seizures may also influence a houseold budget, as those issues reduce available funds to manage funds and put food on the table.

It is important for Ohio residents to understand what the bankruptcy code is intended to provide for consumers. Cincinnati area residents suffering from debt, or other creditor issues, should consider speaking with an experienced bankruptcy attorney who can help to explain how federal law allows processes for consumers to seek meaningful debt relief.

Source: CBS News, "One-third of young adults face medical bill troubles, debt," Ryan Jaslow, June 8, 2012

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