How unexpected medical bills can ruin your finances

When it comes to medical expenses, particularly when unexpected, many people can become overwhelmed by the eye-popping numbers they're being asked to pay and quickly find themselves on the road to financial ruin.

Let's take a closer look at how this can happen. First, these expenses can be huge. Take hospital stays. According to the federal Agency for Healthcare Research and Quality, the mean medical cost for a surgical stay in a hospital was $21,200 as of 2012. Nonsurgical stays were a bargain at $8,500, while maternal and neonatal stays averaged $4,300.

For specialized surgeries such as knee replacements, the costs are much higher, averaging $49,500. A heart valve replacement is even pricier, costing anywhere from $80,000 to $200,000.

When hit with these unexpected expenses, people will empty savings accounts that took them to years to build up, along with 401(k)s and other retirement plans.

Credit scores, not surprisingly, suffer as a result. The Consumer Financial Protection Bureau estimates that about half of all collection accounts listed on credit reports are due to medical debt. Credit scores drop between 50 and 100 points for each account that's sent to a collection agency, according to Credit.com.

To make matters worse, the Federal Trade Commission estimates that 21 percent of all credit reports have a material error, which for many consumers can make a bad problem even worse.

A surprising number of people with health insurance also face financial difficulties. A report issued earlier this year by the Kaiser Family Foundation and The New York Times found that 20 percent of those surveyed with insurance had problems paying medical bills in the past year. Not surprisingly, the figure was far worse -- 53 percent -- for those who lack health coverage.

Nearly 80 percent of those without insurance and 64 percent of those with it report putting off vacations or other significant purchases because of heath care costs, while 75 of the uninsured and 62 percent of the insured cut back on spending on household items.

Bankruptcy is an all-too-familiar problem for many people in this situation. Although precise figures tying medical bills to bankruptcy filings are tough to pin down, most estimates put the figure in the hundreds of thousands. Depending on the type of protection consumers seek, the filing can hurt their credit for seven to 10 years, during which they'll find it difficult to get a loan for a major purchase like a car or a house.

They also may face difficulties finding new jobs because employers often check an applicant's creditworthiness. Credit.com advises consumers in this situation to be proactive to prevent problems from worsening later.

As John Oliver noted recently on his show "Last Week Tonight," medical debt is sold to companies that engage in unethical and at times illegal activities. To illustrate the point, the comedian decided to form his own debt-collection company and acquired nearly $15 million in medical debt from Texas, which he forgave in the largest giveaway ever done on TV.

The issue of health care has become a focal point of the presidential election. Democrat Bernie Sanders has repeatedly argued that health care is a "right, not a privilege," and he supports a single-payer system that rival Hillary Clinton has denounced as unrealistic.

Republican Donald Trump has called for the repeal of Obamacare and supports a policy he says would increase competition and lower premiums, though many health care experts are skeptical.

Still, many Americans go on living with onerous financial burdens from medical bills that they have no easy way to handle.

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.