A recent feature report focused on one family's bankruptcy that resulted from medical expenses, and they were insured. This issue, frequently addressed in this blog was suddenly made "newsworthy" by the feature. While the story is heartbreaking, the story is not new and should be used to refocus our attention to the fact that WHAT our insurance covers is more important than simply "having" insurance.
The story talked about insurance caps: maximum amounts insurance companies will pay out during a specified period of time or for the "lifetime" of the insurance contract. These caps are determined by what the insurer pays out.
While reaching a cap usually means an individual is already drowning from medical expenses because caps are real dollars laid out by insurers as opposed to the funny math that ignores many real dollars laid out by patients ( based on co-pays, allowed charges which are based on the ever fictional going rate as determined by the insurance companies), paying attention to those caps is important when you have ongoing expensive medical care especially care that includes hospitalization.
Hospitalization is a special case because hospitals charge surcharges, authorized amounts above actual fees for things like covering bad debts of the hospital (other people who cannot pay their hospital bills), research and education (yes, your insurer contributes on your behalf). In the case of hospitalization, whether you agree or not, your actual hospital bill might actually be greater than your actual expenses and the amount reimbursed by your insurer will likely also be larger than your actual expenses because of the included surcharges.
Back to bankruptcy. So now you give up, the health care providers win, you will declare bankruptcy. Your first piece of common sense should be to do so before the creditors get a judgment against you because once a judgment is in place, your wages can be garnished by the judgment debtor. This means that even after bankruptcy, a portion of your wages will be taken to reimburse the medical providers. (Of course, consult a lawyer in your area about the specifics of your situation). The second piece of common sense is regarding charging your medical expenses.
Charging medical expenses is not a bad way of keeping track of those expenses. However, in the event you have to declare bankruptcy, charge card companies can try to protect themselves from having your debts discharged. The approach is usually one claiming fraud in that you never intended to pay the debt accrued or that you lied when you applied for the charge card.
Bankruptcy because of the expense of needed medical care is a national disgrace.
Task a day insurance: Consult your policy and note the lifetime or annual caps on coverage. When you consider your insurance for the next year, compare the caps on other options.
Be well and be financially responsible: Get the care you need, pay for it the best you can, know what your insurer is paying or denying, and make your best decision before someone gets a judgment against you.
