Consumer Bankruptcies and Medical Debt
What happens when Illinois residents with significant health problems can’t afford their medical bills or the high costs of prescription medications? Can consumer bankruptcy help Chicagoans who are buried in medical debt? According to a recent article from CNBC, prescription drugs prices are threatening to put many Americans in the poor house.
Have medical bills left you in debt? An Oak Park bankruptcy attorney can discuss your options with you today. Contact the Emerson Law Firm to learn more.
Prescriptions, Insurance Limitations, and Healthcare Costs
How does medical debt affect people on a day-to-day basis? The story in CNBC focused on a couple, James and Dolores Smith, who take nearly twenty prescription drugs combined. For the husband and wife, these medications end up costing about $600 total every month. That’s a cost of more than $7,000 annually. Even with insurance coverage, the Smiths still have to pay substantial out-of-pocket payments that total approximately $2,000 each year. For many couples like James and Dolores, that’s a cost that’s just too high, especially when combined with the out-of-pocket expenses of doctor’s appointments and medical treatments.
When Dolores lost her job last year—and with it her medical insurance—she and her husband began buying their prescription medications on credit. Dolores has several medical conditions, including chronic obstructive pulmonary disease (COPD), a partial heart blockage, and anxiety disorder. James, who is 79-years-old, suffers from congestive heart failure, kidney failure, and COPD. Given their conditions, it’s not surprising that their medical costs would be high. But in addition to charging prescriptions necessary to treat their conditions, the Smiths also began using credit cards to pay for food and other necessities. Even when Dolores was working, the couple had made less than $45,000 combined each year.
Without insurance to partially cover the prices of their prescriptions, Dolores stopped seeing her pulmonologist and cardiologist to cut costs. When the Smiths signed up for an insurance plan through the Affordable Care Act, they were able to spend less on credit. However, even with Dolores’s plan, she continues to pay $241 each month and has an annual deductable of $1,750. As a result, the couple is burdened by medical debt. Is bankruptcy in answer for people like the Smiths?
Medical Debt and Consumer Bankruptcy Protection
Many Illinois residents who file for a Chapter 7 bankruptcy have medical-related debts. And for most of those people, a significant portion of their credit card debt is connected to their healthcare payments. In other words, many of us only accrue credit card debt because we’re spending so much on prescription medications.
According to data collected by the federal government, Americans paid more than $41 billion in out-of-pocket costs for prescriptions alone in 2013. Indeed, CNBC reported that “medical debt was the single leading cause of U.S. bankruptcy filings” last year, and “52 percent of accounts sent to collection on people’s credit reports stemmed from medical-related debt.”
If you have substantial medical-related debts, filing for consumer bankruptcy may be a way to deal with your financial burden. Many Oak Park residents are pleased to learn that their credit can recover relatively quickly after a bankruptcy, and for many Chicagoans, a Chapter 7 bankruptcy can provide a fresh start. If you have questions about medical debt and consumer bankruptcy, don’t hesitate to contact an experienced Chicago bankruptcy lawyer. At the Emerson Law Firm, we have been assisting Illinois residents for many years and can discuss your case with you today.
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