While credit-card debt may once have been on top, medical debt has replaced it as the main reason that residents of Tennessee and all other states declare bankruptcy. That may or may not be news to you; it has been leading the list of bankruptcy causes for a few years now.
The Huffington Post explains that, of those individuals who filed for bankruptcy in 2015, 62 percent cited medical debt as the reason. What is surprising is that the majority of those in this group—72 percent—had health insurance of some type. The majority of people in this group have health insurance of some kind.
Even more of a concern is that those who live in Southern states have a higher ratio of medical debt than others across the U.S., according to The Atlantic. Citing a study by the Urban Institute, the magazine writes that nearly 25 percent of adults have medical debt. Among states with the highest rates of past-due medical debt, eight of the top 10 are in the Southern U.S. They include West Virginia, South Carolina, Mississippi, Kentucky, Oklahoma, Georgia, Arkansas and Alabama. Tennessee is 14 on the list. Mississippi is at the top of the list, with 37 percent of adults with overdue bills. The two most likely groups of people to have medical debt are those between the ages of 25 and 34 and African-Americans.
Insurance coverage may play a role in this disparity. The number of Americans with overdue medical bills has fallen 20 percent since 2012, the year the federal government passed the Affordable Care Act. Even after adjusting the numbers to account for factors such as education and age, the geographic discrepancy holds true. This may be because Southern lawmakers did not use Obamacare to expand Medicaid as many other states did. Expansion of the program was found to help residents reduce the amount of unpaid bills in other areas, while the debt ratio in each state does correspond with its rate of uninsured.
However, there are still many other factors at play, especially considering that 23 percent of people with insurance still have this type of debt, in comparison to 31 percent of the uninsured. High deductibles, uncovered or out-of-network services and co-pays may also account for some debt, along with debt carried over from a period of being uninsured. The frequency of doctor visits and the fact that the Southern U.S. typically has the highest obesity rate also may contribute.