Many working professionals receive health insurance coverage as part of their compensation package from their employers. Others, like those operating their own small businesses, may purchase health insurance coverage through the marketplace. Unfortunately, simply having health insurance does not guarantee that people have the financial support they require when facing major medical emergencies.
Medical debt has become a major issue for people across the United States. In fact, quite a few adults report foregoing medical care because of the expenses involved. Even those who have insurance may find themselves worrying about the financial implications of a major health challenge. Those with massive medical debts may turn to bankruptcy to regain control over their finances.
Why can medical issues often push otherwise financially responsible people into bankruptcy?
Patient responsibility costs
Many insurance companies require that patients pay for a portion of their treatment. Deductibles are common. They can require that someone pay thousands of dollars before the insurance company pays anything. People may also have coinsurance that leaves them responsible for a specific percentage of their total medical bills. Particularly when someone requires extensive medical support, their share of the costs could lead to insurmountable debt.
A simultaneous loss of income
Having medical bills isn’t inherently financially devastating on its own. However, the combination of massive financial responsibilities with a sudden drop in income can be a major financial setback. Severe injuries or illnesses like cancer mites leave someone temporarily incapable of working for months or longer. Losing income can make it a struggle to catch up on bills after treatment ends.
Aggressive collection activity
The final factor contributing to the decision to file bankruptcy in many cases is the conduct of medical creditors. Hospitals are often quick to take legal action when people fall behind on payment arrangements or accrue significant levels of medical debt. A personal bankruptcy filing can put a temporary stop to frustrating collection efforts. It can also help someone protect themselves financially by discharging debts that they would otherwise potentially struggle to repay for years.
Initiating a personal bankruptcy filing after the completion of medical treatment might help someone move past significant medical debts. People who recognize that medical debt is not a sign of personal failure may feel comfortable taking necessary legal steps to address the debts that relate to their medical challenges.
