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One in five American adults will struggle to pay medical bills this year. A sudden accident or frightening diagnosis can touch virtually anyone, unleashing mountains of bills even on the insured. In fact, medical bills are the leading cause of personal bankruptcy, a last resort after millions of families have drained their savings, maxed their credit cards and even refinanced their homes.

To further understand the complexity of health costs, NerdWallet Health has compiled a series of estimates highlighting the strain of medical bills in 2014.

Summary of findings

NerdWallet estimates this year:

56M Americans under age 65 will have trouble paying medical bills

– Over 35M American adults (ages 19-64) will be contacted by collections agencies for unpaid medical bills

– Nearly 17M American adults (ages 19-64) will receive a lower credit rating on account of their high medical bills

– Over 15M American adults (ages 19-64) will use up all their savings to pay medical bills

– Over 11M American adults (ages 19-64) will take on credit card debt to pay off their hospital bills

– Nearly 10M American adults (ages 19-64) will be unable to pay for basic necessities like rent, food, and heat due to their medical bills

– Over 35M American adults (ages 19-64) will be contacted by collections agencies for unpaid medical bills – Nearly 17M American adults (ages 19-64) will receive a lower credit rating on account of their high medical bills – Over 15M American adults (ages 19-64) will use up all their savings to pay medical bills – Over 11M American adults (ages 19-64) will take on credit card debt to pay off their hospital bills – Nearly 10M American adults (ages 19-64) will be unable to pay for basic necessities like rent, food, and heat due to their medical bills Over 16M children live in households struggling with medical bills

Despite having year-round insurance coverage, 10M insured Americans ages 19-64 will face bills they are unable to pay

1.7M Americans live in households that will declare bankruptcy due to their inability to pay their medical bills

– Three states will account for over one-quarter of those living in medical-related bankruptcy: California (248,002), Illinois (113,524), and Florida (99,780)

– Three states will account for over one-quarter of those living in medical-related bankruptcy: California (248,002), Illinois (113,524), and Florida (99,780) To save costs, over 25M adults (ages 19-64) will not take their prescription drugs as indicated, including skipping doses, taking less medicine than prescribed or delaying a refill.

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Discussion

In 2013 over 20% of American adults were struggling to pay their medical bills, and three in five bankruptcies in 2014 will be due to medical bills. While we are quick to blame debt on poor savings and bad spending habits, our study emphasizes the burden of health costs in causing widespread indebtedness. Medical bills can completely overwhelm a family when illness strikes.

Furthermore, 25 million people hesitate to take their medications in order to control their medical costs. This can lead to even worse financial outcomes as patients avoid preventive care and instead use expensive ambulance and ER care as their health worsens.

Finally, many question whether President Obama’s universal health insurance mandate will protect Americans from problems with medical bills. Insurance is no silver bullet. Even with insurance coverage, we expect 10 million Americans will face bills they are unable to pay.

Methodology and sources

Baseline estimate of US population in 2013: We estimated the population based on US census data for total population at the beginning of 2013 and the growth rate between 2012 and 2013, which we halved to reflect average population for calendar year 2013. All numbers were calculated off this figure.

Americans (adults & children) struggling with medical bills: There is significant variation in estimates offered by the US government, non-profits and think-tanks. We used the most conservative, government provided statistics released this month from the Center for Disease Control.

Bankruptcy: We relied on a widely cited Harvard study published in 2009. NerdWallet Health chose to include only bankruptcy explicitly tied to medical bills, excluding indirect reasons like lost work opportunities. Thus we conservatively estimated medical bankruptcy rates to be 57.1% (versus the authors’ 62.1%) of US bankruptcies. We also used official bankruptcy statistics, released this month through March 2013, from US Courts.

Behavior data (use of savings, credit cards, and prescription management): We used a 2013 Commonwealth Fund report that provided percentage estimates of affected adults and applied these figures to our base affected population numbers.

Prescription drug use: Here we used Center for Disease Control data from 2011 and scaled them to 2013 population figures.