Business Wire | Dec 8, 2021 06:01AM EST

Americans with Medical Debt Are More Worried about Making Payments than Getting Better

Dec. 08, 2021

RIVERWOODS, Ill.--(BUSINESS WIRE)--Dec. 08, 2021--A new survey from Discover Personal Loans revealed 58% of Americans took steps to address an unexpected expense since the beginning of the COVID-19 pandemic. Whether they felt prepared to handle these expenses varied. Regarding medical expenses specifically, more than four in 10 say they don't feel prepared to handle these surprise costs.

For those with existing medical expenses, 53% say the pandemic caused them to take on new medical debt, adding to the stress many are already feeling. In fact, Discover's survey found Americans with medical debt are more anxious about the cost of their medical services than their health; 63% of Americans report that they are anxious about paying for medical debt, compared to 47% who worry about getting better.

"People should be more focused on getting and staying well, rather than feeling held back by medical bills," said Matt Lattman, vice president of personal loans at Discover said. "If there are gaps between what you owe, what insurance will cover and what's left in savings, turning to a personal loan might allow someone to pay off medical debt or other expenses in one lump sum, with a lower interest rate than other financial vehicles, and without hidden fees."

Medical debt forcing difficult choices

In addition to anxiety, medical debt has led to other challenging and potentially harmful choices. Eight in 10 of those with existing medical debt say they have postponed medical care because of the cost, and medical debt has also caused Americans to forego financial commitments:

Care put off by Americans with medical Financial commitments delayed due todebt, because of cost: medical debt

Routine checkups 44% Stop paying other bills 37%

Purchasing medication 39% Skip vacations 37%

Preventative testing 38% Stop spending on dining and 35% entertainment

Being seen for a sickness 33% Skip saving for retirement 32%

Surgery 27% Skip adding to my emergency savings 28%

X-rays or scans 26% Pay the minimum payment, and no 23% more, for my credit cards

A treatment plan recommended by my 24% Stop saving for my child's college 20%doctor

Seeing a specialist 24%

According to Discover's survey, nearly 3 in 4 Americans with medical debt have more than $2,000 in outstanding payments. And to make these payments, more people with medical debt report using their credit card, 41%, to pay for their care, over their medical insurance, 38%. Others also cited leveraging payment plans from their hospital, 27%, and personal loans, 22%.

Regardless of current medical debt, 58% of Americans addressed an unexpected expense because of the pandemic

Americans most frequently needed to cover unexpected expenses such as auto and home repairs, and emergency expenses. To pay for these unexpected bills, consumers say they resorted to tapping their emergency savings, borrowing money from loved ones and paying their bills later than usual.

What type of unexpected expenses Since the start of the pandemic, which, ifdid you need to cover? (Select any, of the following have you done to coverall that apply) an unexpected expense?

Loss of income 60% Tapped into my emergency savings 29%

Auto repairs 37% Borrowed money from friends of family 19%

Home repairs 35% Paid some bills later than usual 16%

Emergency medical expenses 32% Put large expenses on my credit card 13%

Beyond helping with unexpected expenses, personal loans can help improve consumers' financial situation. For example, medical debt can be consolidated with other debt, potential saving hundreds, if not thousands, dollars in interest while also simplifying debt to one set regular monthly payment. According to a 2021 Discover Personal Loans survey, 85% of surveyed customers told us taking out a Discover personal loan for debt consolidation helped improve their financial future. 1

"For many, unplanned costs during the past year created roadblocks in financial journeys, especially for people who were already feeling the strain from other areas of debt and expenses," Lattman said. "If people do find themselves in one of these situations, the important thing to know is that there are options available, like personal loans, to help bridge gaps in savings while simplifying multiple payments with a fixed payment amount."

About the Survey

A national survey of 1,515 U.S. residents ages 18 and up was commissioned by Discover and conducted by Dynata (formerly Research Now/SSI), an independent survey research firm, between September 23 and September 27, 2021. The maximum margin of sampling error was +/-3 percentage points with a 95 percent level of confidence. Generations are defined as: Generation Z, born after 1997; millennials, born between 1981 and 1996; Generation X, born between 1965 and 1980; and Baby Boomers+, born before 1964.

About Discover

Discover Financial Services (NYSE: DFS) is a digital banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America's cash rewards pioneer, and offers private student loans, personal loans, home loans, checking and savings accounts and certificates of deposit through its banking business. It operates the Discover Global Network comprised of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance around the world. For more information, visit www.discover.com/company.

1Figure from an online customer survey conducted September 13 to September 27, 2021. A total of 619 Discover personal loan debt consolidation customers were interviewed about their most recent Discover personal loan. All results @ a 95% confidence level. Respondents opened their personal loan between January and July 2021 for the purpose of consolidating debt. Agree includes respondents who 'Somewhat Agree' and 'Strongly Agree'.

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CONTACT: Robert Weiss robertweiss@discover.com 224-405-6304 @Discover_News