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By Christopher Ingraham, The Washington Post
https://www.columbian.com/news/2019/jun/30/student-loan-debt-here-are-7-ways-the-1-6-trillion-toll-affects-the-u-s-economy/
Medical Bill Debt up to Seven Figures
In 2010, Steven Stacey was in a very bad car accident involving his cousin and two friends. Although his mother, Michelle, was notified she did not get much detail when the accident occurred. As her son fought for his life and underwent an operation at the Saint Francis Medical Center in Missouri, Michelle did what any other parent would do. She did not worry about the medical costs associated with his injuries as long as it helped her child. Costs or medical bill debt did not even cross her mind when it came to her son’s life.
Although his life was saved, unfortunately saving her child’s life came at a high cost as many severe injuries or illnesses do. Those hospital bills certainly added up quickly. When he was found at the scene of the accident, he was thrown from the car and suffered internal bleeding. He also had a pulverized spleen, and was even in a coma for a short period of time. He suffered from brain bleeds, fractures in his back, as well as a broken collarbone. His left lung had collapsed while his right lung had bruising.
The medical charges from the center for his two week stay at the hospital ended up costing over $422,000, this according to Michelle’s insurance statements. The bills didn’t stop there, he was then transferred to a hospital in St. Louis for an additional six weeks allowing his medical bills to reach seven figures.
If You Are Struggling With Medical Debt, Speak to a Dallas Bankruptcy Attorney
Stacey is just one of the many who face either a life threatening illness or injury and end up owing a million or more in medical debt. If you are in medical debt whether you owe hundreds, thousands, or millions, you should seek help from a legal professional. They can provide helpful advice and go over options so you can decide how to get rid of your medical debt.
Medical Bill Debt Can Destroy Lives
There’s a must-read article in the Dallas Morning News, which features the stories of ordinary Texas residents who have faced mounting medical debt. Over 70 million Americans are either uninsured or underinsured which makes them very vulnerable to incurring massive amounts of medical debt. But this isn’t the only population of Americans who are exposed to medical debt. Even those who are covered by their employer’s medical coverage can become victims to medical debt.
The Dallas Morning News article featured several stories; but one of them told the story of David Alvey who faced rising healthcare insurance premiums that were threatening to surpass the cost of his mortgage.
The article said:
The Alveys’ insurance costs kept increasing until two years ago, when they learned that their premiums were going to be $1,400 a month. David’s medication was an additional $1,000 a month…” There were some days I didn’t want to get up in the morning to face all the medical debt,” David said.
This type of situation can be financially devastating. The average American cannot afford a healthcare insurance premium that costs $300 let alone $1,400 a month, plus $1,000 a month for medication. The need to pay these astronomical costs can push many into financial trouble, missed mortgage payments, delinquent credit card accounts…you name it. This is a dangerous tight rope situation and could end disastrously. And that’s for a person with medical insurance. Millions of Americans don’t have any healthcare insurance and instead of facing healthcare premiums they face tens of thousands of dollars in medical debt that threaten to drive them into foreclosure and complete destitution. Bankruptcy helps debtors discharge medical debt and/or allows them to repay the medical debt under favorable terms. If you are facing large amounts of medical debt, please contact a Dallas-Fort Worth bankruptcy attorney to discover your bankruptcy options.
Medical Bill Debt Continues to Be the Driving Force Behind Bankruptcy Filing
A new study confirms what many American households continue to struggle with: medical bill debt. When it comes to filing for bankruptcy such bills continue to be one of the main reasons why people seek legal protection. Besides rising medical costs, other reasons bankruptcy is commonly filed include unpaid mortgages and credit card debt. Even those who have health insurance coverage are immune to financial hardships.
Data from the Centers for Disease Control and Prevention (CDC), the United States Census, the federal court system, and other organizations were collected, analyzed, and compared. Studies claim that roughly 20 percent of American adults are struggling to pay medical bills. The study has emphasized the continuing burden medical costs have had on families across the country. Usually, when bankruptcy is filed some may say it is due to poor financial choices or lack of good spending habits, but for others this isn’t the problem.
The study showed some startling information with 25 million American’s admit to being hesitant in taking their medication just to try and save money. It is estimated that close to 10 million Americans may deal with medical debt they cannot pay. A whopping 56 million Americans may struggle in paying their medical bills this year, with many being under the age of 65. Over 1 million American households are expected to file bankruptcy due to inability to pay medical bills. Maxing out credit cards, draining savings accounts, and even refinancing homes have all been completed, leaving bankruptcy as a final resort.
Reference:
http://www.nerdwallet.com/blog/health/2013/06/19/nerdwallet-health-study-estimates-56-million-americans-65-struggle-medical-bills-2013/
Medical Debt Causes Two-Thirds of Bankruptcies
According to an article in the Los Angeles Times, nearly two-thirds of debtors who filed bankruptcy in 2007 cite illness and medical bills as the primary reason for their financial problems. And 77 percent of those bankrupt debtors had health insurance in the beginning of their illness; but lost it later.
The article said:
Four in 10 of the “medically bankrupt” had lost two or more weeks of wages due to their own or a family member’s illness, roughly 35% had spent more than $5,000 or 10% of their annual income in out-of-pocket medical bills, and 43% specifically cited their own or a family member’s illness as a reason for filing for bankruptcy.
The study follows a 2005 study by the same researchers, who found that between 2001 and 2007, the proportion of all bankruptcies that could be attributed to medical problems rose by 49.6%.
This study is disheartening; but not surprising. Medical debt can be absolutely devastating even for those with health insurance and a high-salary job. So many foreclosures and bankruptcies start with medical debt. The problem is the enormous costs of healthcare that can leave many debtors tens of thousands, if not hundreds of thousands of dollars is debt. This debt simply cannot be repaid using the resources/income available to most debtors, it’s impossible. That’s why many of these debtors are forced into bankruptcy.
If you’re facing mounting medical bills, you are not alone. Millions of Americans are drowning in medical debt which is literally destroying their financial health. Do not allow medical debt to get out of control. Bankruptcy allows debtors to discharge medical debt and protect their assets from seizure by creditors. To find out how you can discharge medical debt in bankruptcy, please contact a Dallas-Fort Worth bankruptcy attorney today.
Medical Bill Debt a Leading Cause of Bankruptcy for Half-Million Americans
According to an article in the Star-Telegram, bankruptcy filings caused by medical debt are on the rise as the economy worsens and more Americans lose their jobs and by extension their medical insurance. The article features Tirra Jones, who recently filed Chapter 13 bankruptcy because of the stress and financial duress created by more than $200,000 in medical debt.
The article said:
“Last month, Jones filed for Chapter 13 bankruptcy protection, joining hundreds of people in Fort Worth and more than a half-million nationally, by some estimates, who file for bankruptcy each year because of medical expenses. Except for two car notes, most of the $271,000 in debt that Jones has accumulated was for medical expenses.”
And despite what some may assume about Jones’ situation, she is not a person who just chose to skip the expense of medical insurance. After leaving her job and starting her own day-care center, she attempted to get health insurance; but was turned down because of her pre-existing condition — diabetes. That’s right, diabetes. There are an estimated 24 million Americans suffering from diabetes and many of them (and others) are being denied access to medical insurance because of their condition.
Those people who are denied medical insurance don’t just avoid going to the hospital; when they get sick, they are going to the hospital and wracking up hundreds of thousands of dollars in medical debt, forcing them into bankruptcy. Although the exact number of bankruptcy filings caused by medical debt is not known, a study conducted by researchers at Harvard Law School, Harvard Medical School and Ohio University examined bankruptcy cases for 2007 and concluded that nearly two out of three bankruptcies in the nation stem from medical bill debt. And that’s before the economic crisis.
Medical Bill Debt Continue to Be Leading Cause of Consumer Bankruptcy Filings
A 2007 study completed by the American Journal of Medicine looked at statistics of consumers who filed bankruptcy and found that 90 percent of consumers who filed bankruptcy due to mounting medical bills had $5,000 or more in medical debt. Even consumers with medical coverage have been subject to increased medical costs since their insurance may offer limited coverage. Some consumers may have even mortgaged a home to help cover medical costs.
Many consumers who have filed during this time period experienced other issues including illness and job loss. But when it comes to certain medical needs the costs tend to add up quickly, even when you pay out-of-pocket costs to have the insurance company cover the remaining amount. In general, insurance companies may cover between 60 to 80 percent of medical-related costs. In many cases the insurance company may pay a certain percentage for care such as a diagnosis or surgery.
But a factor that ends up hurting a lot of consumers include paying for prescription medicines or costs not covered by insurance related to hospital stays. Medical costs related to a cancer diagnosis for example could top near $25,000 depending on medical services based at fair market prices. Even though many insurance plans offer a stop-loss provision for additional consumer protection in the case of a catastrophic injury or illness, many consumers may need to pay thousands in out-of-pocket costs before the insurance company picks up the tab.
Reference: http://www.columbian.com/news/2012/nov/04/medical-bills-lead-many-families-to-file-for-bankr/
Is Medical Bill Debt Causing Hospital Bankruptcy Filings?
The country has been hit by a string of hospital bankruptcy filings and closings that could impact healthcare access for many communities. St. Vincent’s Hospital is the latest hospital to file Chapter 11 bankruptcy in the hope that the bankruptcy filing will allow it to continue operating and caring for its patients until it closes. The hospital filed Chapter 11 bankruptcy with more than $1 billion in debt and few assets. There has been a lot of hand wringing and finger pointing; but what is the core cause of this rash of hospital bankruptcy filings?
Hospitals depend on the payments it receives from insurers and patients to survive. Without that income their cash flow slows to a trickle and eventually stops. That is the way the systems works. But what happens when millions of Americans no longer have health insurance because they are unemployed? What happens when millions of Americans are unable to pay their medical debt because they don’t have any health insurance or cash because of unemployment? What happens is that hospitals don’t get paid.
Even if the hospitals become aggressive (and they have) by sending more medical debt accounts to collections, you can’t get blood from a turnip. Most of those Americans suffering under medical debt are not paying simply because they can’t. They are often unemployed and uninsured which makes medical debt just another debt that is likely to go unpaid or even eventually discharged in bankruptcy. While outstanding and unpaid medical debt on a small scale won’t send hospitals into bankruptcy, large scale defaults on medical debt could send many hospitals into bankruptcy essentially battering our already suffering healthcare infrastructure.
Medical Bill Debt Continues to Be Leading Cause of Bankruptcy
Out of the 70 percent of Americans who file for bankruptcy, over 60 percent of them file due to debt from medical bills. Many consumers continue to struggle in paying medical bills and it continues to be the leading cause of bankruptcy. A recent report looks at how ethnic groups such as Latinos face ongoing struggles in paying medical debt with 1 in 4 having difficulties in paying their bills.
While this problem is ongoing, experts review a number of aspects as to why this is still a huge problem, even for those with insurance coverage. When you are unable to pay medical debt, collectors are likely to pounce on you for payment. Many consumers are well aware of how fast bills pile up when you become unemployed, have limited income, or a medical illness that requires extensive care. Some people have a limited ability to earn income because of their health.
Then you have a large number of people who are uninsured or underinsured. In the case of Latinos, experts predict close to 200,000 will file bankruptcy this year due to medical debt. Even if you have insurance you may not be out of the woods. Some people find it difficult to pay insurance premiums alone. Some who have insurance are surprised to learn what it may not cover if sudden illness occurs.
The good news is with bankruptcy you can explore your options when dealing with medical debt. Chapter 7 bankruptcy may help you eliminate or discharge qualifying debt. Chapter 13 bankruptcy may help you repay what you owe through a repayment plan based on your ability to make payments.
Reference:
http://latino.foxnews.com/latino/money/2013/08/15/nerdwallet-medical-bankruptcy-is-on-rise-as-1-in-4-latinos-struggle-to-pay/
Medical Debt Goes up as Recession Worsens
According to an article in the Gazette, the amount of medical debt afflicting Americans is on the rise as the number of job losses mount and the recession worsens. That’s why many Americans facing mounting medical debt are filing bankruptcy for relief.
The article said:
“A new national study showed that more than 60 percent of all personal bankruptcies in the country were related to medical problems and most of the people were middle-class and well-educated and had medical insurance.”
Many of those who are insured eventually face medical debt because their insurance policies don’t cover enough or they don’t cover what they expect it to cover. Even if someone has medical insurance they need to carefully review their insurance policy so that they understand what is actually covered by the policy.
Many Americans facing medical debt have been burned by “emergency” medical insurance that was suppose to cover emergency care; but didn’t even cover an ambulance ride once an actual emergency occurred. Or, the “emergency” policy didn’t begin covering medical expenses until the patient paid a set amount of money “out-of-pocket.”
Unfortunately for most debtors facing medical debt, those “out-of-pocket” expenses can often be as much as $5,000. If you’re a debtor facing mounting medical debt, please contact a Dallas- Fort Worth bankruptcy attorney. Medical debt can often be discharged during bankruptcy giving debtors a fresh start financially.
Six Million Uninsured Texans Stand on the Brink of Medical Bankruptcy
According to an article in the Dallas Morning News, the most recent U.S. Census Bureau figures states that Texas leads the nation in the percentage of residents without health insurance. More than 1 out of every 4 Texans are without health insurance, a total of 6 million residents and Texas leads the nation in the numbers of children who go without health insurance.
The article said:
“…Texas had the nation’s highest percentage of children under 18 without coverage – 17.9 percent. Nationwide, the percentage was 9.9 percent.”
Lack of health insurance is one of the leading causes of bankruptcy. Medical debt is an outcome that most uninsured individuals simply cannot avoid. Medical procedures for even the simplest problems such as a broken bone or food poisoning can quickly snowball into an avalanche of medical debt priced in the tens of thousands of dollars. According to leading analysts the vast majority of debtors who file bankruptcy cite medical debt as one of the main causes of their financial trouble. Fortunately for debtors who file bankruptcy medical debt can be completely discharged in a Chapter 7 bankruptcy or repaid under reasonable terms in a Chapter 13 bankruptcy.
Source: http://www.dallasnews.com
Medical Bill Debt May Surpass Credit Card and Mortgage Debt as Leading Cause of Bankruptcy
A recent study continues to confirm one of most leading causes of consumer bankruptcy: medical bills. Yet, the study also brought to light other significant points that may hint medical bills may become the number one reason why bankruptcy is filed. Unpaid medical bills may surpass mortgage debt and credit card debt for various reasons, despite more people getting access to healthcare insurance.
The Affordable Care Act, also known as Obamacare, is helping millions of Americans obtain health insurance, with a large number of consumers being able to obtain healthcare coverage for the first time in years. But many bankruptcy filings that have occurred in recent years were due to consumers unable to pay medical bills. Roughly 78 percent of people who file bankruptcy due to overwhelming medical debt had health insurance.
A 2013 study completed by NerdWallet Health showed evidence of medical debt possibly becoming the number one cause of bankruptcy over credit card debt and mortgage debt. High insurance deductibles, copays, and medical costs make it difficult for families to manage necessary household needs and put further stress on finances. Americans who were forced out of a job may have tried to continue medical coverage through COBRA, though these payments alone are a challenge especially if you have been laid off.
Experts believe medical expense rates have grown so quickly they have gone above inflation. Making it a dominate force many consumers are forced to deal with. Also known as a medical bankruptcy, consumers considering filing because of medical debt should review their filing options closely with an experienced bankruptcy attorney.
Will the Rising Cost of Medical Insurance Cause More Bankruptcies?
The cost of medical insurance has continued to rise, burdening both employers and workers. But as the economy worsens many experts are predicting that the cost of coverage could increase as much as 30 percent each year with many employers passing on the increased cost of health insurance to workers. Many workers, especially those who are living on tight budgets, will choose to drop their coverage making them more vulnerable to medical debt and bankruptcy. Even government plans such as Medicaid and Medicare and feeling the squeeze and President Obama is predicting bankruptcy of these programs if steps are not taken to decrease the costs. But for individuals and families reliant on employers to provide low-cost medical insurance, bankruptcy is already becoming a very real possibility. Here’s why…
- Many employers are attempting to decrease their medical insurance costs by forcing workers to pay for a higher percentage of their premiums. This can be particularly difficult for families dependent on one salary. Many of those families either forgo or sign-up for inadequate coverage which increases their risk of medical debt and eventual bankruptcy.
- The rising numbers of job losses are leaving more workers uninsured. Eventually these workers get sick, rack up large amounts of medical debt and are forced to file bankruptcy for relief.
- Even for unemployed workers who want to continue their coverage under a former employer’s health insurance program, COBRA is an expensive option. Even with subsidies many workers are forced to choose between paying for health insurance and paying the mortgage.
- Finally, a growing number of Americans are finding themselves uninsurable because of pre-existing conditions. Those Americans are either stuck paying exorbitantly high premiums or risking medical debt and bankruptcy by forgoing health insurance coverage.
The post Medical Bill Debt appeared first on Allmand Law.
Detecting Medical Billing Errors Can Help You Reduce Debt
Need Help Detecting Medical Billing Errors?
We often tell our readers that reviewing their medical bills for errors is essential, that it can help them get payments from their insurance company and save money on medical bills. To learn more about how to reduce medical debt, read below.
Companies That Can Help You Review Your Medical Bills
It seems that this task has opened the doors for some entrepreneurs to start a business dedicated to helping people review their medical bills. CoPatient provides free audits of medical bills, searching for billing errors and overcharges. Their aim is to reduce costs and determine if any of the charges can be appealed.
While there are other companies who offer similar services, CoPatient uses a “crowd sourcing” approach to differentiate their business. They take the information they’ve learned from claims and then apply that knowledge to the next set of claims that come their way. They’ve developed an intuitive way to learn from medical bills and help those down the line.
The company’s founders both worked in the healthcare field previously and understand how truly confusing medical bills can be, especially when there are several treatments, diagnoses and dates of service. Add to that the fact that there may be more than one insurance company involved and you’ve got a mess of paperwork and codes that are difficult to navigate through.
While CoPatient offers free audits it does have paid tier levels for people who need additional support. While the services they offer are incredible and very helpful for people struggling with medical debt, their greatest contribution is most likely their ability to inspire patients to get involved in their medical bills and pay attention to their charges.
Find an Experienced Dallas Bankruptcy Attorney
Find an experienced Dallas bankruptcy attorney to help ensure that any and all potentially dischargeable debts are eliminated. To learn more about how to reduce medical debt, contact us today.
Fix Mistakes on Medical Bills
Do you know that even a small error in the spelling of your name, your address or a couple inverted numbers can affect how, or if, your insurance company pays your medical bills. We can’t stress strongly enough how important it is to check each of your medical bills to make sure that they are accurate, from the spelling of your name through to the charges and diagnoses.
The first things you should review when you get a medical bill are the things that are obvious to you, your personal information, the doctor(s) you saw, and the dates of care. When it gets to the more difficult aspects of your bill like your diagnosis, the diagnostic codes, the procedures and procedural codes and the like, you will probably have to contact your medical healthcare provider to see if they can help you decipher the charges to make sure that they’re accurate.
The double checking doesn’t stop there, you need to go over your insurance company’s explanation of benefits form with an equally fine toothed comb. Checking up on your insurance company is your responsibility, so you may have to call them to get a better understanding of their denials and cross check their reasons against your insurance policy to make sure your claims are being handled correctly. The mistakes made in regard to medical bills do not just occur on the part of your healthcare provider, insurance companies make just as many mistakes and it’s your job to make sure they’re paying appropriately.
A bankruptcy attorney can help you learn how to reduce medical debt by making sure you don’t make costly mistakes on your bills.
Medical Errors and Medication Mix-ups Affect Medical Debt
Hospitals are incorporated into modern day society to help people feel better. However, after some alarming studies done on hospitals, uncovered were some pretty horrific events. There are a lot of people that are looking into becoming their own health advocates.
In recent years, various errors performed in treatment have caused the amount of medical debt to rise throughout the United States. Problems ranging from a patient receiving the wrong body parts to medication mix-ups are happening frequently, and taxpayers are being forced to pay for the ignorance of these professionals.
Studies show that roughly 1.5 million patients are given the wrong medications for their conditions. Not only does this hurt the patient that was mistreated, but it also takes funds that should not be taken out of the budgets that most hospitals are given. When the money that a hospital has been given to operate has diminished, the hospital will borrow more money from outside sources to keep their facility running.
The money that the hospitals borrow will only add to the amount of medical debt that the United States presently has to deal with. Changes are being made to try to rectify the amount of errors that hospitals and other medical clinics are allowing to slip by.
There are more than 3000 hospitals that have signed a new campaign that was presented by the Institute for Healthcare Improvement. This new campaign mandates that hospital staff perform multiple checks on medications before they are given to patients.Even though the system has shown improvement, it is too soon to know if the improvements are going to make any changes to the debts that these institutions have incurred over the time that they did not have the system in play. In order to prevent harm to themselves, patients are advised to always have a friend, patient advocate, or family member by their side if they are going through a surgical procedure or being administered any type of medication.
Common Mistakes on Medical Bills
We often suggest that our readers take the time to review all of their medical bills in detail to see if there are any errors. Medical billing errors are quite often a reason for insurance companies to deny payment. It’s one of those denials that can successfully be fought and won. This can mean the difference between small payments you were due and thousands and thousands of dollars.
How to Reduce Medical Debt by Checking for Mistakes on Your Bills
So what are the main areas you need to check on when reviewing your medical bills and insurance submissions?
Personal Information
It seems like the most obvious place to start, so definitely start there. Check your personal information to make sure your name, address, insurance ID numbers and other personal information is correct. This is a quick mistake to fix and if your name is wrong an insurance claim will be sent back right away.
Services Performed
When you check the services performed section of your medical bill you may have to ask for help from your healthcare provider’s office to see what the codes and charges mean. Make sure that these service line up with what you actually had done and that there aren’t any additional charges or duplications. This may not mean a lot to the insurance company but if you’re being overcharged you sure need to know.
Diagnoses
The diagnosis you’re assigned for your illnesses are also another are where you’ll probably need to get clarification from your healthcare provider’s office. Having the right and/or wrong diagnosis can affect your insurance payouts and it’s important that all of your medical records are accurate for future reference.
More and more medical offices are turning to electronic health records or EHR to handle billing, this means it’s even more important than ever to double check each bill you get as this will stay on your record and mistakes may cause serious problems later on.
Learn More About How to Reduce Medical Debt
If you are struggling under medical bills, a bankruptcy attorney can help. Learn more about how to reduce medical debt by contacting our office today.
Some Medical Debt the Result of “Balance” Billing
According to an article in the Dallas Morning News, even if you have medical insurance and go to an “in-network” hospital, you could still end up with a ton of medical debt due to a practice called “balance billing.” In a nutshell, balance billing equals more medical debt for consumers who use “in-network” hospitals who in turn employ “out-of-network” medical staff. The medical professional may not have a contract with your insurer so they charge any fee they choose, the insurer is not obligated to pay it; but you are.
The article said:
“When Thomas Harrington went to the emergency room for treatment of a smashed finger one Sunday morning in August 2007, he fully expected his insurance would cover his costs. The hospital, Denton Regional Medical Center, was included in his insurer’s network, after all. Unfortunately for Harrington, the emergency room doctor was not. As a result, the 48-year-old Denton man was billed for the balance not paid by his insurer.”
“The next thing I know, I checked my credit report and saw that the doctor submitted $350 to collections,” Harrington said. That debt lowered his credit score from 775 to 630, he said.”
That’s what balance billing does to ordinary consumers like you–more medical debt and more headaches. However, some legislators have got wind of this nasty little practice that is exasperating Americans medical debt problem and legislation was passed that gives consumers some power to fight it.. State representative Kelly Hancock, authored legislation that provides a mediation process for consumers to dispute medical debt that is due to balance billing practices. The law, which was passed in June, allows patients with medical debt exceeding $1,000 to have a mediator decide what they owe, provided the medical service was conducted by a physician in a hospital covered under the patient’s insurance.
This is a good start; but what we need is a law that out right bans the practice. Most consumers suffering under medical debt don’t have time to fight with powerful insurers in court. We need to understand and respect that reality.
Being Underinsured Is a Well Traveled Road to Medical Debt
We often mention on this blog that medical debt is one of the leading causes of bankruptcy in America. But there is another problem not often talked about that causes millions of Americans to unwittingly rack up medical debt — inadequate health insurance. Millions of Americans are signed up for health insurance policies that offer inadequate coverage. When it comes to understanding how to reduce medical debt, being aware of your policy is the first step.
Just when they need the insurance benefits because of a catastrophic illness, they find that many of the procedures they require are not covered by their barebones health insurance policy. Of course the get the procedures anyway and end up in thousands, sometimes hundreds of thousands of dollars in medical debt.
Is your health insurance policy adequate?
Ask yourself the following questions and find out if your health insurance is likely to put you into medical debt not keep you out of it:
- Does your health insurance have low overall health coverage? Medical care is VERY expensive so if you have a policy that is only covering you for a few hundred thousand you could be setting yourself up for a medical debt catastrophe if you ever faced a serious illness.
- Does your health insurance policy omit care for important items such as prescription drugs or outpatient chemotherapy? If so, this is another pitfall in your health insurance that could cause you to rack up tens of thousands of dollars in medical debt.
- Does your health insurance policy fail to place a maximum on out-of-pocket expenses? Many barebones health insurance policies have no limit on how much you’re required to pay out of your pocket a year, which can send you into bankruptcy if you ever become seriously ill.
Yes, medical debt can be discharged in bankruptcy; but there are some things you can do now to avoid the medical debt trap. If you’re paying for a medical insurance policy make sure that you are properly covered. Visit Consumer Reports – Health Insurance Overview to find out more about how your health insurance policy may be setting you up for a medical debt trap.
Uninsured Children Can Add to Mounting Medical Debt
According to an article in the Dallas Morning news, Texas has some of the largest numbers of children living with no healthcare in the nation.
The article said:
“Texas has policies that make it difficult for many to get (public) insurance,” said Julia Easley, director of the advocacy program at Children’s Medical Center Dallas. She said 1.5 million Texas children are uninsured.
Families without health insurance are at risk. Children get sick and without health insurance, one child’s illness can quickly morph into interest accruing medical debt. There are public health insurance programs for children but the eligibility is limited and the application process is so complicated that many parents need to fill out the forms several times just to get it right. The problem is probably going to worsen because more families are facing job losses and can’t afford to make the COBRA payments that would allow them to keep their health insurance.
Faced with job losses, foreclosure and other debts, many parents are simply risking it by not carrying health insurance. Many are paying price in the end once they or their child is faced with an illness. After an illness uninsured families quickly learn how medical debt can become as big of a problem as credit card debt or foreclosure. Fortunately, there are laws that allow medical debt to be discharged in bankruptcy. If you have been saddled with medical bills and would like to learn how to reduce medical debt, please contact a Dallas-Fort Worth bankruptcy attorney today to find out how you can discharge medical debt in bankruptcy.
Medical Debt of a Victim
Unfortunately with medical bills they don’t solely rack up from falling ill or injuring yourself in an accident. There are some that face medical bills because they became a victim to a crime. When a crime occurs, such as a mugging, the ambulance is called and you are rushed to the emergency room (if necessary) leaving you with medical debt. There are some ways you can choose to handle these bills, however. For example, some people will sue the muggers for the amount owed and more. That is if the criminal was caught.
A great piece of advice would be to contact a crime assistance program which every state has. There are online resources that can help point you in the right direction. Some agencies will actually pay for your medical bills either in full or partially if the patient was a victim of a crime. This also includes ambulance costs. Another benefit to contacting these agencies is that they also offer support groups and counseling.
If you were stuck with the ambulance bill, another option is to speak to the ambulance company. They may be willing to negotiate your bills or offer financial assistance. Regardless of how you handle your medical bills that were obtained from a crime, you should without a doubt get help as soon as possible.
The numbers of individuals that are underinsured have increased to about 25 million over the last four years. Along with the 3 million that are not insured at all, if you become a victim to a crime, chances are likely you will face a large medical bill. Just as an illness or injury brought on by an accident, it is not fair that you need to not only be impacted psychology from being a victim, but on top of that, worry about the medical debt. That is why you should do a little digging and try to find assistance from programs that help victims with their medical debt.
Medical Credit Cards Could Endanger Your Finances
Why You Shouldn’t Get a Medical Credit Card
Medical credit cards are lines of credit designed to pay for medical expense such as surgery or medications. Many medical credit cards come with a low introductory rate of zero percent but after a few months can balloon to an interest rate as high as 30 percent. There is big business in medicine and in debt and it seems that the medical industry and the banks that fund them are joining forces to pile even more debt onto struggling Americans.
That’s not to say that your doctor is personally trying to put you in debt; but the medical credit cards offered to debtors are more beneficial to corporations than to the patient.
Let’s take a look at a few reasons why you should NEVER get a medical credit card:
Interest Rates
Medical credit cards will immediately charge interest on your medical debt after the grace period has passed. Patients who don’t pay for services with a medical credit card avoid interest rates as long as they don’t go to collections.
Credit Report Damage
It doesn’t take long for you to miss a few payments on your medical credit card and end up with a ding on your credit report. A medical credit card is still a line of card and failure to pay on time will hurt your FICO score. If a debtor fails to pay medical debt not charged to credit card, it isn’t likely to be reported to the credit bureaus until after it goes to collections. At the slow rate at which hospital billing departments operate that could take months.
Bankruptcy Complications
Medical debt is dischargeable in bankruptcy, plain and simple. However, medical debt charged to a credit card could offer some complications during bankruptcy. Some credit card issuers might argue that you never intended to pay the medical debt, especially if you charged medical procedures or medicine to your credit card after becoming insolvent.
You Cannot Be Denied Emergency Medical Treatment Because of Bankruptcy
We’ve discussed previously how medical debt is one of the biggest causes of bankruptcy in the country. Medical debt is such a huge problem that many Americans are afraid that if they file bankruptcy a hospital or doctor that was included in the bankruptcy may refuse to treat them in an emergency situation.
No hospital can refuse emergency treatment to any patient regardless of their income, credit or bankruptcy status. That is the law. Furthermore, hospitals are not checking your credit or bankruptcy status when you come through their emergency room so you have nothing to fear in that regard.
Many debtors considering bankruptcy are also afraid that if they include their personal physician in their bankruptcy case they won’t be able to return to receive their treatments especially in cases when the debtor has a chronic illness. This is highly unlikely. With the rising costs of medical care, filing bankruptcy because of medical debt has become more and more common. The medical community is not in the habit of denying treatment to patients even if they discharged a very large medical bill in bankruptcy.
When filing bankruptcy, debtors are required to list all debts, including medical debt. Filing bankruptcy on medical debt will not impact your ability to receive treatment in the future. Bankruptcy offers all debtors a fresh start, including debtors with medical debt.
Save Now for Retirement Medical Expenses
As if the current crisis of rising healthcare costs weren’t enough to stress most of us, the Employee Benefits Research Institute announced the results of a study regarding the savings that a person will need upon retirement to pay for expenses not covered by Medicare and Medicaid. The results are different for men and women, because of longevity issues. A man retiring at the age of 65 in 2009 will need anywhere from $68,000 to $173,000 in their savings to cover additional medical expenses. Because women live longer, they will need even higher savings at retirement. A woman retiring at age 65 in 2009 will need somewhere between $98,000 and $242,000 to cover their out-of-pocket medical expenses. The study is daunting, because many people are barely making their mortgage payments and covering their current bills with little left over to amass a significant savings for retirement.
How to Reduce Medical Debt by Reducing Your Daily Expenses
Even though this is not the best news for consumers, there are actions that you can take now to start planning for retirement. In an article by MarketWatch, they suggest the first step is recognizing that you will need a mass savings and start preparing, the earlier the better. The next step is to “reduce dramatically your standard of living, save aggressively, consider working longer, and try to stay as healthy as possible for as long as possible.” These are generally good suggestions. Cutting costs in your daily expenses and utilizing more saving strategies is always the best first step in debt management. Working longer and trying to stay healthy are also solid recommendations.
However, these recommendations don’t adequately factor in our current recession. Most of us would like to work longer, but with the unemployment rate climbing each month and more business closing, that option may not be available to everyone. Irving Based Kimberly Clark, Inc., the maker of Kleenex and Huggies, announced today that it would be cutting 1,600 jobs. Most of us try to eat healthy and not get sick, but some illnesses are only controllable, not preventable. Managing a disease like high blood pressure or diabetes is expensive even under the best of circumstances.
Because of the recession, consumer spending has decreased and more and more people are already reducing their standard of living. Hundreds of people are hitting web sites like couponmom.com and mommysavers.com looking for ways to reduce the basic costs of living. AAA has announced that Fourth of July travel is expected to drop because of the recession. The bottom line is that many people are already doing everything they can to make it through and are already living below their standard of living. Especially when you are in your thirties and forties, most people are not thinking about saving for medical costs during retirement, they are focused on making it through this year without financially crumbing.
How to Reduce Medical Debt by Preparing Early
Not dealing with serious debt issues right now does have long-term consequences. It impairs your ability to save and rebuild your financial stability. The number one message in the MarketWatch article is the sooner the better. If you are struggling with towering debt and foreclosure feels like it is just around the corner, getting good information sooner is better. It will assist you in making sounder financial choices so that you make it through your current financial crisis sooner, rather than later. No one likes the idea of bankruptcy…but it may be the best option to help you get through the financial crunch now… so that you can start focusing on saving for retirement expenses. A qualified bankruptcy attorney can help you work through the process to help you make the best longer-term and short-term decisions for your financial situation.
4 Ways to Prevent Medical Debt From Wrecking Your Retirement
Your Retirement and Medical Debt
Even for Americans who have held steady, well-paying jobs throughout their working years, medical debt can still wreck their retirement security. We discuss how to reduce medical debt and ensure that you protect your retirement.
Below are four things debtors can do to prevent medical debt from destroying their retirement:
- Purchase and keep comprehensive health insurance. This is often easier said than done; but good health insurance is the foundation of protecting yourself from the negative impact of medical debt. If you’re underinsured you can end up with massive amounts of medical debt if you have a major health problem. And unfortunately the chances of having a major health challenge increase with age.
- If you face mounting medical debt, don’t delay a necessary bankruptcy. The ugly truth about medical debt is that it is often insurmountable without the help of bankruptcy. Medical bills in the tens of thousands and sometimes hundreds of thousands are not designed to be paid by individuals. Unless you are amongst the world’s wealthiest individuals you won’t be able to put a serious dent in most medical debt. That’s why bankruptcy forgives medical debt and other unsecured debts.
- Don’t liquidate your retirement account to pay medical debt. This is one of the biggest mistakes that debtors make. The reality is that when you liquidate your retirement account to pay medical debt you are putting yourself deeper in the hole. You will pay a penalty fee and taxes on any retirement account you liquidate before the age of 65. Also, once you liquidate your retirement account and place that money in your bank account, you make it vulnerable to other creditors if they decide to sue you and win a bank levy against your account.
- When planning for your retirement, make sure you plan so that you have enough money to fill the gaps in your medical coverage. Remember, in you retirement years you will need to pay co-pays, deductibles and other out-of-pocket expenses as you take care of your medical needs.
For More Information About How to Reduce Medical Debt
If you have questions about how to reduce medical debt, speak to a Dallas bankruptcy attorney at Allmand Law Firm, PLLC today.
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