Building a Free Safety Net for the Everyday American
We are the founders of betterbank.app and here is our story!
Medical bills are the leading cause of personal bankruptcy and a common major expense for millions of Americans. The Federal Reserve in its report on Economic Well-Being found that one-fifth of adults had major unexpected medical bills to pay in 2018.
The problem only gets worse. Health care deductibles are rising across the board as employers pass on the majority of the first dollar burden to employees. The Commonwealth Fund estimates that 45% of adult Americans are underinsured — they will have to spend more than 10% of their annual income just to meet their deductible before health insurance pays a dollar.
These numbers are alarming enough, but this is when it starts to get personal!
My brother & co-founder, Saumik got into an accident last year while playing for his college rugby team. A trip to the ER and an X-Ray left him with a $1500 medical bill that wasn’t covered by insurance because it didn’t meet his annual deductible limit. As a college student with limited finances, he had no choice but to let the medical bill go into collections which is when the real ordeal started.
He started receiving calls from collection agents threatening to sue him in court, he got notices left in his school mailbox asking him to pay up or risk getting his tax returns garnished. As an international student, he was told that his immigration status could be jeopardized. Ultimately our parents picked up the tab, a function of the privilege we enjoy but which the majority don’t possess!
We are problem solvers at heart so when confronted with this situation we started digging deeper to understand the nature of medical debt in America.
And what we found surprised us!
In 2016, The CFPB conducted a study on 4 million credit reports and found that 1 in 6 Americans have a past due healthcare bill totaling $81 Billion in medical debt.
Most people imagine medical debt as something that happens due to a long term illness or a debilitating accident, running up hundreds of thousands of dollars in medical bills. But that’s simply not true!
53% of medical bills — were less than $600 each. These are not life-threatening situations causing debt but rather mundane everyday things that could happen to any of us as we go through life.
Young people tend to be disproportionately affected — with 11% of all medical bills affecting 27-year olds — the exact age they get off their parents’ health insurance. In fact, medical debt mostly affects young people between the ages of 27–45 and goes down with increasing age even though medical spending goes up with age!
Bottomline: Healthy, young folks who don’t have insurance or have high deductibles fall prey to the growing scourge of low value medical debt!
Enter: betterbank.app, a checking account that comes with a free emergency fund. We pay cash in case of a medical emergency! It’s an insurance payout not a loan, you don’t have to pay us back!
This is how it works!
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If you are interested in the backstory, you could read confessions of an insurtech founder, failing at a healthcare startup and why is everyone starting a bank!
