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Medical debts force many Tennessee residents into bankruptcy

Health care has become a common talking point for presidential candidates. Unfortunately, as the presidential campaigns are gaining steam, Tennessee's own health care crisis appears to be gaining momentum:

  • Access to health care is diminishing as many Tennessee hospitals are closing;
  • The lack of access to health care is compounded by rising health care costs;
  • The rise in medical debt is forcing many residents of the Volunteer State to consider filing a petition for personal bankruptcy.

The situation of a Knoxville family is demonstrative of the problems faced by people across the state. The couple's child was born with Prader-Willi Syndrome, a genetic disorder that produces a number of different symptoms. He remained in the hospital for three months after his birth, but his parents had no medical insurance for the first five weeks of care. Shortly after the child was brought home, his mother was diagnosed with cervical cancer. She required two surgeries. The couple felt that their only option was filing a petition for personal bankruptcy. Tennessee was the last state to pass the Katie Beckett waiver, a law that provides Medicaid eligibility for children whose parents' income is over the Tennessee limit of $2,113 per month.

Tennessee has the highest rate of personal bankruptcy in the 50 states. It also ranks highly among states with elevated levels of medical debt and poor health outcomes. This could be attributable to the fact that twelve hospitals have closed in Tennessee since 2013. Conversely, private hospitals in Tennessee and their executives appear to have flourished financially in the last few years. Yet, a recent study found that nearly 25% of Tennessee residents list medical bills on their credit histories.

Most experts who have studied the problems faced by Tennessee residents in obtaining and paying for care fault both Congress and the state legislature for failing to take effective action. Until legislation is forthcoming, residents of Tennessee will be forced to use their meager resources to make whatever payments for health care they can afford and to rely on bankruptcy to protect themselves from debt collectors for the health care industry.

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