The simple and painful truth in modern America is that you’re always one healthcare crisis away from bankruptcy. The present-day marketplace of healthcare is a disconnected web of providers with the most inconsistent pricing you can possibly imagine. Following an acute crisis that sends you to the hospital, you’ll probably get stuck with a fat bill that’s simply unaffordable. If you find yourself among the tens of millions people who are still uninsured (despite the best efforts of the federal government), you’re especially at risk. Anyone can face large amounts of medical debt, but the uninsured face serious financial calamity.
Healthcare in the United States is the most expensive in the world. While the average hospital stay costs about $10,000, non-standard mishaps can bankrupt nearly anyone in a blink of an eye. For instance, a rattlesnake bite can cost you more than $150,000, and a burst appendix can run $55,000. Considering the average millennial’s net worth hovers just above $10,000, even with excellent insurance, your co-pays and deductibles can easily wipe out your entire nest egg.
A trip to the hospital is outrageously expensive with health insurance, but without it, it gets much worse. If you have the great misfortune of ending up in the hospital without insurance, you’ll be charged cash prices. Those rates are in the stratosphere, and are typically a great deal higher than the “negotiated” or “repriced” amounts an insurance company pays.
These sky-high prices are why healthcare is the number-one cause of bankruptcy in this country, and the number-one driver of debt collection. An astounding three in five bankruptcies in 2014 were due to medical bills, and medical debt has damaged the credit scores of more than 43 million Americans. It’s gotten so bad that credit rating agencies decided that they would begin treating medical debt more leniently when calculating your FICO score. If credit agencies had continued to weigh medical debt as heavily as they did previously, they might have found themselves with an ever-shrinking pool of creditworthy borrowers.
The takeaway from these sobering statistics is easy–get insurance, even if it’s not a great plan. Being sick is hard enough, never mind the medical debt that could cost you your credit and savings. If you don’t have insurance, December 15th is the deadline for open enrollment for signing up for insurance on the healthcare marketplace. While that marketplace may not exist in future years in its current form, for now it is the best place to find insurance and to see if you qualify for federal subsidies.
Because insurance is often employer provided, a lot of millennials have gaps in coverage when floating between jobs. It’s important to remember that you can always sign up at anytime if you lose your insurance. Employers often cut you loose from your benefits right away, so getting new health care coverage is something you have to consider the second you anticipate a job change. Having insurance will save a lot of grief and aggravation, and your credit. And if you’re willing to destroy your credit to save on healthcare costs, keep in mind that prospective employers are able to view your credit report legally.
