Can Health Insurance Limit Medical Debt?

Can health insurance limit medical debt and help Chicago residents to avoid personal bankruptcy? While it might seem logical to assume that having health insurance can greatly reduce the amount of medical debt a person owes, and thus make the likelihood of having to file for Chapter 7 bankruptcy less likely, this may not be the case for numerous Americans. According to a recent report from ABC News, the Kaiser Family Foundation released data showing that “an increasing share of Americans find it difficult to pay for health services even if they have insurance.” Health services are among the leading causes of consumer bankruptcy in the country. An article from CNBC indicated that around two million people file for bankruptcy each year as a result of unpaid medical bills, and that high numbers makes “health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages.”
If health insurance is not making a sufficient difference in health care costs for consumers, are there other ways to manage medical debt? If healthcare-related debt has become insurmountable, is personal bankruptcy a good option for you?
Difficulty of Affording Health Insurance and Meeting Policy Deductibles
How difficult is it for Americans to afford health insurance? Even when health insurance is affordable, is it possible to meet insurance policy deductibles without taking on crippling medical debt? According to the data from the Kaiser Family Foundation, 37% of Americans reported that they “found it difficult to afford their health insurance” in 2017. That number rose from 27% in 2015. Even more significant, however, is the number of Americans who indicated that they “found it difficult to meet their policy deductible.” The data shows that 34% of policyholders had difficulty meeting their deductibles as of 2015, and that figure has risen to 43% in 2017.
The Kaiser Family Foundation also indicated that a high percentage of Americans who have health insurance are postponing medical care because of the out-of-pocket expenses. The report contends that “27% have postponed seeking health care because of the cost.” This information is particularly important at a time when Congress may be repealing and replacing the Affordable Care Act. While the Affordable Care Act has both opponents and proponents in Congress, there is a bipartisan recognition that we need to do more to keep the costs of health care down, especially for those who need medical treatment and may avoid it in order to limit debt. Currently, the Urban Institute shows that around 25% of seniors (aged 65 and older) have unpaid medical debts.
Medical Debt, Debt Collectors, and Personal Bankruptcy
The Consumer Financial Protection Bureau (CFPB) identifies medical debt as the cause for the highest number of calls from debt collection companies. Even with health insurance, the fine print of the policy can lead individuals and families to owe thousands of dollars. How do insured patients end up with substantial medical debt? The following are some reasons:
  • High deductibles;
  • Denied claims from the insurer;
  • Care from out-of-network vs. in-network healthcare providers; and
  • Failing to obtain preauthorization.
For many of the reasons cited above, if a patient is able to learn more about his or her policy and to double-check that she or he obtains preauthorization and uses and in-network provider for all services, some of the debt can be avoided. When medical debt becomes too difficult to manage, however, personal bankruptcy may be a helpful solution for you.
Contact a Chicago Bankruptcy Lawyer
If you have concerns about your eligibility for Chapter 7 bankruptcy or questions about managing medical debt, an experienced bankruptcy attorney in Oak Park can assist you. Contact the Emerson Law Firm today for more information.
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Comments

  1. carryJune 2, 2017 at 1:15 PM

    Hey, nice info!, very informative post.............
    No one needs an attorney to tell them that bankruptcy is a complicated process. However, a bankruptcy attorney can provide the assistance necessary to get through this stressful process.
    Chapter 13 Bankruptcy

    ReplyDelete

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