Over 40% of working-age Americans are weighed down by medical debt—that’s 72 million people. If you’re living in the U.S., medical debt may sometimes feel like an eventuality. But does it need to be? Let’s take a look at some of the most common causes of medical debt, how you can avoid it, and how bankruptcy may help you escape the medical debt trap.

Common Causes Of Medical Debt

There are several causes of medical debt. Let’s take a look at a few.

No health insurance. 
Having no health insurance is an obvious cause of medical debt. If there is no insurance to reduce or eliminate your medical bills when you inevitably get sick, then you will probably go into debt just trying to pay for treatment. If you can’t afford health insurance or if your employer doesn’t provide insurance due to your part-time or contract status, you should apply for subsidized medical insurance or Medicaid through your state.

Inadequate health insurance. 
This common cause of medical debt is usually a surprise for most people. Everyone thinks that they have the right kind of coverage only to discover that their coverage is inadequate when they really need it. Either the deductibles are too high (thousands of dollars) or the maximum amount of coverage is too low.  Health insurance with low maximum coverage limits will max out after any major health crisis.

Job loss. 
Losing your job often comes at the most inconvenient times such as when you’re in the middle of treatment for a serious disease.  This is also the case when your spouse loses their job, you may lose your coverage and COBRA may be too expensive to fill in the gap.

When you find yourself saddled with medical debt, paying it off quickly will ensure it won’t impact your credit score. The three major credit reporting agencies wait 180 days before listing medical debt on your credit report. But if you’re not able to pay quickly, you could be facing bigger problems. Once your medical debt goes into collections it can be a lot more difficult to get out of the hole and it can lower your credit score making it difficult to qualify for other loans or refinances you need.

Avoiding Medical Debt

While it may feel like medical debt is inevitable, there are a few things you can do to avoid it or at least minimize it. Let’s take a look at a few tips.

Get adequate health insurance. 
Even if you’re receiving health insurance through an employer, take the time to research your coverage to ensure that your needs are covered. Also, consider buying supplemental coverage that will cover long-term disability or a critical illness. Supplemental insurance can fill in the gaps where your primary health insurance falls short.

Maintain a health savings account. 
The federal government will allow you to save for expected and unexpected medical expenses tax-free. As of 2019, individuals can contribute up to $3,500 a year to a health savings account while married couples and families are allowed to contribute a combined $7,000 per year. Taking advantage of this program will give you the opportunity to cover medical expenses and save on taxes.

Stay “in-network.” 
If you’re using a health insurance plan with “in-network” and “out-of-network” providers, stay with the in-network providers. In-network providers usually have a larger number of services covered by the insurance provider and they are less expensive in the long run. The little expenses associated with out-of-network providers can add up quickly. And in some cases, there may be confusion or even disputes about what the insurance will pay for when you visit an out-of-network provider. And anytime there is a confusion or a dispute you can get stuck paying the bill. Even if the issue is eventually resolved, you may still be on the hook until the insurance provider agrees to pay which can be months or even years after a bill has been issued. That’s time enough for your account to go into collections and hurt your credit record.

Check your bill. 
Don’t automatically pay any medical bill sent directly to you. Check with your insurance provider first to see if they cover the bill. Some medical providers automatically send bills to the patient even when the insurance company covers the service. Save yourself a lot of headaches by checking with your insurance provider first. You should also check for bill inaccuracies. Do you see charges for services you never received? How about excessively expensive supplies such as $100 aspirins? If you see anything that is out of place on your bill, send a written dispute to the medical provider detailing what you think is wrong.

Negotiate your bill. 
If your insurance company doesn’t cover a medical bill and you can’t afford it, talk with the medical provider first. Tell them your financial situation and ask that the amount of the bill be reduced. Do not wait until you have been put into collections. Contact your medical provider immediately, as soon as you receive a medical bill that you know you can’t afford to pay. Tell them you can’t afford it, let them know that your insurance doesn’t cover it, and that you want to pay it off but that you need it to be reduced. Many medical providers are happy to offer you a lower bill just to get the bill paid off and off their books. They are also willing to provide interest and fee-free payment plans. If you wait until your medical debt goes to collections, you could be on the hook for fees the bill collectors tack onto your bill.

File bankruptcy. 
If you’re unable to fully repay your medical debts and you have other large debts such as credit cards, car loans, and a mortgage at-risk of foreclosure, filing bankruptcy might be the right move. In Chapter 13 Bankruptcy, you will have an opportunity to repay some or all of your medical debts while Chapter 7 Bankruptcy will allow you to completely discharge your medical debts (and other unsecured debts such as credit cards) so that you don’t have to repay them.