Archive for the ‘medical debt’ Category
Monday, May 9th, 2011
The Federal Trade Commission announced this week that according to a recent study, there has been an increase in the number of drug companies engaging in pay-to-delay deals with generic drug producers.
The FTC has denounced the actions, and with good reason: medical costs are one major contributor to many personal bankruptcy filings of U.S. citizens. So how might these types of deals affect you and your family?
- Background information: Once a drug company patents a certain drug, generic producers of drugs of similar chemical composition may file a challenge to the patent, with the goal of being able to produce a chemically similar (or identical) version to sell more cheaply.
- How the deals work: If these challenges went to court, it’s possible that they would result in judges ruling in favor of the generic producers. In order to avoid that outcome (and thus secure the market for themselves for a longer period of time), some brand-name drug manufacturers settle out of court with generic drug producers.
- Who makes money: Most settlements include an agreement that the generic manufacturer will not produce the generic version of the drug until a certain date; some settlements include a financial incentive from the brand-name manufacturer to lengthen the delay period (i.e. the brand-name manufacturer pays the generic manufacturer to delay its release of its cheaper product). The FTC found that in cases involving a payment, generic drug release waiting periods increased by an average of 17 months.
- Who loses money: The FTC notes that in 2010, 22 name-brand drugs were targeted in pay-to-delay deals. The total number of such deals reportedly jumped from 19 in 2009 to 31 in 2010 (an increase of more than 60 percent).
- What it costs us: The total dollar toll these deals have taken on Americans comes to $3.5 billion per year, according to FTC estimates. The difference comes from the fact that generic drugs can cost anywhere from 20 to 90 percent less than their name-brand counterparts. That’s a lot of money people could be putting toward paying down mortgages or credit card debt.
Are Generic Drug-Delay Deals Legal?
Anyone familiar with antitrust laws may wonder whether deals to delay competitive drugs are even legal in the U.S. The answer is a little murky. It seems that the FTC has filed a number of lawsuits against pay-to-delay agreements and has demonstrated its support of bills in Congress designed to eliminate such activity among drug manufacturers.
How can you take action? While there may not be much you can do about the problem of pay-for-delay agreements, if you’re worried about paying your medical bills, you can (and should) ask your physician whether generic versions are available any time you need medicine.
Posted in Consumer Protection, FTC, Financial Literacy, Legal Info, Medical Bills, medical bankruptcy, medical debt | Comments Off
Saturday, April 24th, 2010
Despite the vast body of research that indicates otherwise, many Americans still think of filing for bankruptcy as a sign of personal or moral weakness, rather than a needed safety net for people who truly cannot afford their bills.
An article from the Minneapolis Star-Tribune does an excellent job of addressing this common misconception about the protection bankruptcy offers. The writer was inspired to action, it seems, by a columnist from another publication who cited bankruptcy as proof of moral weakness.
His response includes these important facts about bankruptcy that reinforce its role in the U.S. economic system:
- Medical costs contribute to many bankruptcy filings. In fact, a study conducted in 2007 (link below) found that more than 60 percent of Americans who file for bankruptcy do so because of excessive medical bills. This is no surprise to anyone who has had difficulty getting health coverage or being able to afford insurance.
- Job loss and divorce play a huge role. Along with medical costs, these two factors account for the vast majority (about 90 percent) of all bankruptcy filings. And, if the current economy has done anything, it has reminded us how devastating job loss can be.
- People who file really need help. The article notes that the average Chapter 7 bankruptcy filer has an income of only $20,000 per year, which isn’t exactly a lot of money, and can easily disappear when an unexpected financial burden hits.
- Credit card companies are not your friends. Many people who file for bankruptcy have some or all of their unsecured debt discharged by the court—this debt often includes credit card bills. And, with high interest rates, fines and fees that these companies rake in, it’s hard to feel sorry for their loss of income.
The bottom line here is that bankruptcy exists to protect those who truly need its protections. Without it, the American economy would likely not flourish with as much innovation as it does today—thanks to the security that bankruptcy provides, entrepreneurs can take risks that they might not otherwise have.
Additional Resources
Medical Bankruptcy in the United States, 2007 (PDF)
Medical Bills and Bankruptcy (PDF)
Posted in Setting the Record Straight about Bankruptcy, bankruptcy stigma, medical debt, reasons for 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
