Archive for the ‘health insurance’ Category
Thursday, March 25th, 2010
This weekend, the U.S. House of Representatives passed a healthcare bill that could lead to substantial changes in the nation’s healthcare system. In an email to supporters sent Sunday evening (via Organizing for America), President Obama noted that the new regulations could prevent "families and businesses from plunging into bankruptcy."
So how is healthcare reform linked to personal bankruptcy filings?
The Tipping Point
Many Americans who file for bankruptcy don’t decide to do so over night; for many, it’s a drawn out and even painful process. Often, people wait until they have no choice but to file for bankruptcy, meaning that their savings and retirement funds are depleted and they have few other options.
Consider this:
- In 2001, a study found that medical costs contributed to 42.6 percent of all bankruptcy filings in the U.S.
- In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) took effect and tightened the requirements for those wishing to file for bankruptcy.
- In 2007, a new study showed the number of "medical bankruptcies" rose to a startling 62.1 percent.
Understanding "Medical Bankruptcy"
High medical bills alone may not force otherwise financially healthy individuals to file for bankruptcy. But, as the 2007 study points out, medical problems and expenses can harm individuals and families in a number of ways:
- Income loss: Injuries and illnesses that cause people to take significant time off work often mean significant pay loss as well, which can lead to unpaid bills of all stripes.
- High bills: The 2007 study indicates that, of those who were pushed into bankruptcy for medical reasons, a whopping 92 percent had bills that totaled more than $5,000 or 10 percent of their family’s pretax income.
- Loss of safety net: Even those who have enough money to cover medical bills are at risk: expensive procedures that drain savings accounts can set you up for financial disaster if any other financial roadblocks spring up.
- Limited future: Some injuries and illnesses leave permanent damage and can affect a person’s ability to find and keep work in the future, meaning that options for getting out of debt can be severely limited.
As the Obama Administration has pointed out, the introduction of more comprehensive healthcare coverage could eliminate or correct many of the problems currently linking medical expenses to bankruptcy filing.
To better understand how the healthcare reform might affect you and your family, check out this post.
Additional Resources
America’s Affordable Health Choices Act
Posted in Bankruptcy News and Events, barack obama, health care, health insurance, health reform, medical bankruptcy | Comments Off
Friday, February 19th, 2010
As healthcare costs continue to skyrocket in comparison to household earnings, many Americans are looking for ways to save on medical bills. However, not every deal is worth pursuing, and the Coalition Against Insurance Fraud reports some healthcare scams currently plaguing the nation.
Background
Because health insurance in the U.S. is most commonly linked to jobs, a high rate of unemployment means higher numbers of people are going without health coverage. And, thanks to lowered income for many households, affording healthcare can be a huge stumbling block.
According to sources, some companies are apparently taking advantage of vulnerable Americans by offering discount health products, which may not be a very good bargain.
Discount Plans vs. Health Insurance
Health insurance, as many people know, works like this: you pay a certain amount of money each month (called a premium) and when you need access to medical care, you only pay a portion of the price (called a deductible) because you’ve insured yourself against doing so.
Discount plans, on the other hand, offer discounts on the normal full price of medical services. They are usually restricted to specific caregivers and specific medical facilities. After receiving consumer complaints about some discount plans, investigators reportedly found that discount plans tended to:
- Overstate benefits: Advertisements for some plans misled consumers with claims about potential savings. For example, a plan might advertise itself as offering
savings up to 60 percent,
but provide a 60 percent discount on only one service.
- Offer insufficient savings: Those with chronic health problems or who make frequent doctor’s visits may see little or no financial benefits from these plans.
- Provide incorrect information: Some plans apparently guaranteed access to medical professionals who were no longer affiliated with the plan.
Making the Decision
If you don’t have access to or cannot afford health insurance, you may benefit from signing up for a discount plan – the important thing to do is research the plan before committing to it.
These precautionary steps to anyone considering such a plan:
- Read everything. Look at the forms you’d be required to fill out and scrutinize the fine print. Make sure you know exactly what the plan includes – and leaves out.
- Don’t jump the gun. Before opting out of another insurance plan, make sure the new plan you’re looking into will offer the kind of protection you need.
- Make some calls. Ask for the list of physicians that you’d have access to and call to make sure they’re still participating.
Remember: commercials tell you only what they want you to know so do a little digging before choosing any new medical product.
Additional Resources
Medical Bills and Bankruptcy
Posted in Financial Literacy, health insurance, medical bankruptcy, medical debt, medical scams | Comments Off
Friday, December 4th, 2009
Thanks to the health care overhaul bills currently working their way through the U.S. Senate and House of Representatives, the high cost of health insurance in America is on the public’s mind. And now, with a key provision of the stimulus bill expiring this month, another aspect of the health care dilemma has come to the surface.
Job Loss and Health Insurance
Because many Americans get medical insurance through their employers, job loss can be a double blow, meaning the loss of income as well as coverage. To address this concern, lawmakers included provisions for health insurance in the stimulus bill passed in February:
- Subsidized coverage: The stimulus provided funds to reduce COBRA payments by 65 percent for those who wanted to keep their company’s health coverage after losing their jobs.
- Limited offer: Naturally, the government assistance came with boundaries: to be eligible, people must have been laid off between September 1, 2008 and December 31, 2009. Further, subsidized coverage only lasts for nine months.
Because the measure went into effect in March of this year, thousands of unemployed Americans are now facing huge jumps in the cost of their health coverage.
In fact, sources indicate that the average affected family will see their costs soar $722 per month – from $389 to $1,111. In many states, that amounts to the vast majority of unemployment payments; in some states, it exceeds possible unemployment payments.
Hope on the Horizon: Bills in Congress
Luckily, the situation is not completely without hope. In fact, the Associated Press reports that Congress is currently considering bills that would add an additional $100 billion to unemployment benefits (including the COBRA subsidy).
Here’s a numerical breakdown of the proposed legislation:
- $85 billion would be funneled toward extending emergency unemployment payments
- $15 billion would fund the expanded health care coverage
In 2007, when unemployment hovered around 4.8 percent, about $43 billion was reportedly spent on unemployment costs.
While some measures of the economy suggest we’re pulling out of the worst of the recession, many experts still expect unemployment levels to remain high for another year or so, which means these problems likely won’t disappear any time soon.
Additional Resources
Special Report: Expiration of COBRA Subsidy (PDF)
Unemployed and Uninsured (PDF)
Posted in health insurance, medical bankruptcy, unemployment | Comments Off
