NEW YORK (TheStreet) — Fully a quarter of Americans claim more medical debt than savings, says a study from Bankrate.com — a number that rises the further you slide down the income scale. Forty-four percent of Americans earning less than $30,000 a year report having more debt than savings, and that's a demographic group with no room for financial error.
Medical debt can really wreck a consumer's finances. According to the Federal Reserve, medical debt accounts for half of all consumer credit agency collection activity, and 78% of consumers in a Center for Consumer Recovery study called medical debt the primary reason for their going into bankruptcy.
In the Bankrate study, 55% of consumers say they were either "very worried" or "somewhat worried" about being overburdened by medical debt.
"These results show that more than half the population feels financially insecure when it comes to health care," says Doug Whiteman, an insurance analyst at Bankrate.com. "This is an issue that affects consumer confidence and the broader economy."
The issues seeps over into the volatile subject of health care coverage, where an equal number of Americans (55%) worry they won't have direct access to good health care insurance, compounding the worry that consumers could face even more medical debt despite health care reform designed to cut medical bills for millions of Americans.
"This might suggest that many people are either uninformed about the exchanges or lacking confidence in the Affordable Care Act," Whiteman says.