WASHINGTON — One-quarter of Americans say they have more medical debt than emergency savings — and it’s a trend that keeps people up at night, according to a new survey.
While 25 percent of people said their medical debts exceed their emergency funds, 55 percent of people are worried they will find themselves overwhelmed by medical debt, according to a Bankrate.com survey.
“These results show that more than half the population feels financially insecure when it comes to health care. This is an issue that affects consumer confidence and the broader economy,” Bankrate.com insurance analyst Doug Whiteman said in a news release.
The survey asked more than 1,000 U.S. adults how they are feeling about health care and their personal finances and found that worry levels were the highest among people often in their prime earning years.
Sixty percent of Americans between 30 and 64 are very or extremely worried that they won’t have affordable health coverage, compared with 49 percent in other age groups.
One reason for the unease may because people many people who once couldn’t get access to health insurance are able to under the Affordable Care Act but are unfamiliar with how health insurance works, says David Cusano, a senior research fellow at Georgetown University’s Health Policy Institute in D.C.
“With the Affordable Care Act, anybody who now wants insurance can get it,” Cusano said in a news release.
“The question now becomes: ‘Can I afford to use it?’ When you think about people confronting out-of-pocket maximums at around $7,000 or deductibles of $5,000 for a family, that’s a lot of money. You throw prescription drug co-pays into the mix, and I can see where you would be worried.”
How much should people have in emergency savings?
While it’s different for everyone, Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling in D.C., says people “can’t afford not to save.”
She says it is recommended to keep nine months to one year of income in an emergency fund in case of job loss.
“People are often out of work now for as long as nine months, and if they don’t have savings, they live on credit. So when they replace their job, they are behind because now they have debt to repay,” Cunningham told Bankrate.com.
Scott Cramer, president of a Florida financial planning firm, recommends having an emergency fund of three to nine months’ worth of expenses — but it should reflect your needs.
“It’s a common mistake to underestimate your expenses or to just think about fixed expenses such as a mortgage,” Cramer said to Bankrate.com.
“I suggest people look at what they are spending on everything, including gas, food and child care, then estimate how much they will need.”
The Bankrate.com survey was conducted between Aug. 21 and Aug. 24. The margin of error is plus or minus 3.6 percentage points.