You can have all the proper medical insurance, and yet one emergency or illness can send you into financial ruin. It’s not unusual to see stories of cancer patients becoming homeless because they’ve accumulated an exorbitant amount of debt from their medical expenses. One study found that around 40 percent of Americans only have enough saved to cover a $1000 medical emergency.
Last year, around 530,000 people filed for bankruptcy due to their medical expenses. This study also found that even the Obamacare assisting with those medical expenses did little to help. The country’s health insurance providers refuse to pay for and provide adequate assistance for their customers. This leaves 1 in 6 Americans with unpaid medical expenses and debt.
Research found that 67 percent of all bankruptcies were related to medical expenses, despite no technical term for “medical bankruptcy.” As of now, the country currently has an estimated $81 billion dollars in collective medical debt.
How Do People Get Into Medical Debt?
A major factor in people accumulating medical debt isn’t actually from having no health insurance. Medical debt is from insurance providers denying medical claims and refusing to pay expenses. Under the Affordable Care Act, states must set up an external review process for denied medical claims. Before you file for bankruptcy, check with the Centers for Medicare and Medicaid Services to see what guidelines your state has in place to protect you. Lawyer can also help you appeal a denied medical insurance claim.
Despite the protection of the Affordable Care Act, policy deductibles are still incredibly high and there are lots of out of pocket expenses that will not be covered by even the best insurance. This is also why there has been lots of debate about adopting a free-healthcare system similar to Canada’s.
Filing For Bankruptcy
Filing for bankruptcy will alleviate you of your accumulated debts. Bankruptcy will affect your credit score, and could result in your assets being taken away. Working with a lawyer when filing for bankruptcy will ensure that all forms are properly filled out. A lawyer ensures you won’t lose anything more than what you need to. Individuals can file for either a Chapter 7 or a 13 if they have accumulated medical debt.
Chapter 7 Medical Bankruptcy
This motion will eliminate all your medical bills along with other unsecured debts. Any medical bills and retail debt that you paid for with credit cards are discharged. In order to qualify for this Chapter, you’ll need to pass a means test to prove that your income is low enough.
Chapter 13 Bankruptcy
This motion will combine all your unsecured debts and medical expenses into one bill. A Chapter 13 requires you make payments on your debts through a court-order payment plan. To qualify for a Chapter 13, you must make enough money to pay off your debts, bills, and medical expenses. There are also limits your medical bill cannot exceed under this Chapter.
Most medical bankruptcy cases worsen because a debtor is unable to work due to their poor health. If your medical debts worsen from being unable to work, it may be best to see if you qualify for a Chapter 7.
Having a lawyer help you navigate your medical expenses will ensure you’re protected from your medical debt, and that your insurance provider rightfully pays for the medical expenses outlined in your contract. Don’t let insurance companies or your debt stress you out, and worsen your health. Call one of our Premier Partners at MyCaseHelper for a free consultation.