Editors Note: This article is part of our Medical Bankruptcy in America series. Each case is drawn from publicly filed federal bankruptcy records. Identifying details about individuals have been removed to protect privacy. The financial information and creditor listings referenced are documented in court filings.
We publish these cases to examine the role medical debt plays in personal bankruptcy and to assess accountability where federally supported healthcare programs are involved.
They filed Chapter 7 together in Louisiana.
A married couple. One income. Five grandchildren living in the home.
Their total liabilities exceed half a million dollars.
There are car loans. There are personal loans. There is a mortgage.
But one line in the filing stands above the rest.
UC Health Medical Center of the Rockies — $107,571.09.
A single hospital creditor.
More than $107,000.
It is the largest unsecured claim in their bankruptcy.
UC Health Medical Center of the Rockies participates in the federal 340B Drug Pricing Program.
That matters.
Their current gross monthly wages are just over $5,500.
After deductions, their take-home pay is approximately $4,742 per month.
Their monthly household expenses total $4,742.
There is no margin.
No reserve.
No excess capacity to absorb unexpected cost.
A six-figure hospital bill in a household operating at zero surplus is not a temporary hardship.
It is a structural impossibility.
$107,571 is more than double their annual take-home pay.
It is not a balance that can be “worked out” over time without dismantling the household entirely.
The 340B Drug Pricing Program allows participating hospitals to purchase outpatient drugs at steeply discounted prices — often 30 to 50 percent below market rates.
The purpose of 340B was to help hospitals stretch resources and serve vulnerable patients.
Hospitals are not required to pass those discounts directly to patients.
But the program was designed to strengthen safety-net care — not to coexist with medical bankruptcy.
In this filing, the largest unsecured creditor is a 340B-participating hospital.
The record shows a $107,571 claim.
It does not show a reduced obligation.
It shows Chapter 7.
If a hospital benefits from federally supported drug pricing advantages under 340B, and a working household still emerges with a six-figure liability that exceeds annual income, policymakers must ask:
Were charity care policies applied?
Was financial hardship screening automatic?
Were internal 340B revenues used to reduce patient exposure?
Were collection practices aligned with the public purpose of the program?
The bankruptcy filing cannot answer those questions.
But it does reveal the outcome.
A hospital claim of $107,571.
And liquidation.
Medical debt is not elective.
It is not discretionary consumption.
It is incurred in moments of vulnerability.
When the largest unsecured creditor in a bankruptcy case is a 340B-participating hospital, the tension becomes unavoidable.
The federal government created 340B to strengthen care for patients under financial strain.
Yet here, medical debt from a 340B hospital is the dominant unsecured claim in a family’s financial collapse.
That is not an abstract policy debate.
It is a documented bankruptcy.
Across states, the pattern is emerging:
Working households.
Minimal margin.
Large hospital claims.
340B participation.
Chapter 7.
If 340B is meant to support vulnerable patients, then the presence of six-figure hospital debt in bankruptcy filings deserves scrutiny.
Not rhetoric.
Scrutiny.