A majority of Americans said that inflation and rising costs has impacted their healthcare purchasing decisions or their ability to pay medical bills, according to a recent AccessOne survey.
In January, the consumer price index, a measure of inflation, showed that overall prices grew by 6.4% from the previous year while prices for medical care services increased by 3%. This rise in healthcare costs and other areas of spending is why 71% of respondents said they are struggling with healthcare bills or delaying medical decisions.
Overall, 43% of Americans said they couldn't comfortably cover medical costs exceeding $249, while 54% would delay payment on an unaffordable bill, according to the survey.
Meanwhile, 40% of Americans owed over $500, down from 80% saying the same last year. Still, the drop was mainly because a larger percentage of respondents are forgoing medical care to avoid debt, a separate Debt.com survey said.
"We tend to think of inflation as annoying instead of dangerous," Debt.com President Don Silvestri said. "But inflation means more than higher food and gas prices. It pervades everything we spend money on – including our physical health."
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Changes to how medical debt is reported, announced last July, means that any medical debt in collection no longer immediately impacts consumers' credit. Additionally, at the start of 2023, the three major credit bureaus – Experian, Equifax and TransUnion – began scrubbing medical debt under $500 from credit reports.
However, after a year, medical debt in collection over $500 will continue to show up on credit reports. Roughly 28% of Americans said their medical bills had been sent to collection and over half said they owed more than $500, according to the Debt.com survey
"Any medical debt under $500 won't get recorded on your credit report," financial attorney Leslie Tayne said. "While large, unpaid medical bills in collections can still damage your credit score, these changes should help if you temporarily fall on hard times or can't pay for inexpensive medical care."
If you are dealing with unexpected expenses, you could consider using a personal loan to pay down debt at a lower interest rate. By visiting Credible you could compare multiple lenders at once and choose the one with the best interest rate for you.
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As prices rise, many Americans tapped emergency savings to pay for essentials and 19% said they dipped into their savings to pay for healthcare expenses in the past year, according to the AccessOne survey.
Beyond savings, 21% of Americans said they borrowed money from friends and family to pay off their healthcare costs, 20% worked multiple jobs to pay off the debt and 23% have turned their medical debt into credit card debt, according to a recent Affordable Health Insurance survey.
"In general, it is best to avoid putting medical expenses on credit cards," Freddie Huynh, Freedom Debt Relief vice president of data optimization, said. "If you do, and if you're sure you can pay off the charge in full, on time, when it appears on your statement, that may be fine. But if not, you'll be paying regular credit card interest rates – which are averaging around 20%."
If you have accumulated debt, you could consider using a personal loan to help you pay it down at a lower interest rate. You can visit Credible to compare multiple personal loan lenders at once and get prequalified in minutes.
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