Today’s world is positively chock-full of ways to ruin your financial situation. You could overspend on credit cards. You might find yourself out of work, with no way to pay your mortgage payments. However, the surprising, perhaps shocking, truth is that the leading cause of bankruptcy in the United States is not overspending, lack of employment or over reliance on credit cards, but medical bills.
The Reality of Medical Debt
In 2013, CNBC ran a story based on a study conducted by NerdWallet Health. According to CNBC, “Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year – making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit card bills or unpaid mortgages, according to new data. And even having health insurance doesn’t buffer consumers against financial hardships.”
A year later, Fox Business published a similar story that highlighted the fact that while the Affordable Care Act made it easier for many consumers to obtain health insurance in the first place, that protection might not be enough to offset the costs of medical treatment and the resulting financial devastation. In that story, they cited Ethan Austin, co-founder of GiveForward, a fundraising nonprofit organization. “It’s not just the medical bills; it’s really everything around the bills that insurance won’t cover,” he explained. Austin noted that 78% of consumers filing for medical bankruptcy actually had health insurance. It just wasn’t enough.
Now, you’d be forgiven for assuming that things might have changed between 2013-2014 and today. However, that’s actually not the case at all. In fact, the situation might have worsened. A story published by NPR in 2016 points out that even with insurance, medical bills still take a massive toll on Americans.
In a poll conducted by NPR and Harvard’s T.H. Chan School of Public Health, in conjunction with The Robert Wood Johnson Foundation, up to 25% of US adults state that medical bills have caused “serious financial problems”. Of those people, 7% ended up filing for bankruptcy. And, remember, those people had health insurance.
Other ways that insured consumers found to deal with medical bills included taking on additional credit card debt (which could lead to bankruptcy down the road), setting up payment plans with health authorities, spending the entirety of their personal savings, cutting back on necessities like heating and cooling, or even food, or taking out a loan.
Each of these consumers had health insurance. It simply wasn’t enough. Not by a long shot. In addition, consider the fact that 58% of the respondents in NPR’s poll, all of whom were insured, stated that at some point in the previous two years they had been unable to obtain needed medical treatment, usually because they couldn’t afford it.
Why Is Insurance Not Enough?
Given the fact that the Affordable Care Act was designed to make insurance, well, affordable, it’s natural to wonder why there are so many US citizens still struggling to simply get the treatments and medicines they need, and why so many who do find themselves filing for bankruptcy. Actually, there are many reasons for this.
One of those is the shift in how employers are handling insurance. There’s a lot of change around the country as employers struggle to handle the repercussions of the ACA. One of their strategies is to shop around for insurance coverage for their businesses that is more affordable to the company, rather than for the employee. This leads to challenges such as:
- Increased Copays: More and more often, consumers are finding that their copays have gone up. Each increase takes its own toll on their financial situation, and that occurs every single time they’re required to make a copayment.
- Higher Premiums: Monthly premiums have increased by 83% since 2005, according to a study conducted by Kaiser Permanente. That means a family of four used to just making ends meet with a premium of $400 per month is now having to pay $732 per month for the same coverage. Those unable to cope with the higher premiums find themselves forced to reduce their coverage, which leaves them facing higher medical bills if they actually need treatment.
- Higher Deductibles: The same study by Kaiser found that deductibles had increased by 255% since 2006. So, a family that was used to paying $1,000 per year in deductible costs is now having to pay $3330 instead. And that’s all out of pocket until the deductible amount is met. Often, there is limiting language in insurance plans, as well, meaning that the deductible is per person, per year.
How Are Consumers Dealing with Rising Costs?
While insurance companies, employers and even the government might simply assume that consumers are buckling down and simply finding a way to pay for those higher costs, the truth is that they’re not. Thus, the increase in bankruptcy filings related strictly to medical costs. Other consumers are finding other ways to “afford” to pay their bills, including the following:
- Skipping Medication: Many consumers cut back on the medications they take, or skip doses altogether in an effort to make things stretch just a little bit farther. That’s very dangerous, particularly with medications like insulin for diabetes.
- Choosing Which Prescriptions to Refill: Consumers with multiple medications that require refills are choosing which ones to actually get filled based on how much money they have left at the end of the month.
- Skipping Appointments: If they cannot afford the copay, many consumers simply skip important medical appointments. We’re not speaking of basic checkups – they’re being forced to skip out on echocardiograms and other essential diagnostic appointments vital to their long-term health.
- Not Getting Treatment in the First Place: More and more people are simply choosing to skip going to the doctor in the first place. If they cannot afford the copays or the medications, then there is little point. Of course, they still have to pay their insurance premiums, and they’re not receiving the treatment they require.
How Can You Fight Back?
Where does the quagmire that is today’s medical industry and health insurance landscape leave you? How can you fight back? Bankruptcy is certainly one option, although that can leave you in serious financial straits, with a huge blot on your credit that will remain for years to come, and the possibility that you won’t see all of your medical debt discharged anyway.
Of course, there’s also the fact that while bankruptcy might help with your past medical debt, it will do nothing for your future debt. That is perhaps the most disheartening aspect of the situation. Most of those with high medical bills are not necessarily struggling due to a “one-off” condition. We’re talking about long-term situations – repeated surgeries, ongoing medical care to manage a serious health condition that can only be treated but not cured.
Those bills will keep piling up, as the need for medical care does not actually end. Where does that leave Americans?
There are a few things that you can do. For instance, you might qualify for discounts, such as 10% off if you pay your bill over the phone or online rather than in person. However, don’t expect your doctor to tell you about these discounts – you have to ask about them.
Some medical providers or networks may offer charity care programs. If you’re accepted to the program, you may be able to see discounts of 30% or more on the amount you’re responsible for paying after your insurance kicks in. Again, you have to know to ask about these programs, as they’re not common knowledge.
Finally, you can speak with the medical billing department on your own. Rather than not making payments at all, which will only send your account to collections, you may be able to work out a payment arrangement that avoids late fees and penalties, while allowing you a longer period to pay the bill.
Call in the Professionals
While there is a great deal you can do yourself to save on medical bills, there’s no need to go it alone. Calling in the professionals at Ducit Health can save you a great deal on your medical debt and even forestall the need to file bankrupt.
We offer solutions to your pressing financial needs through line by line education about your medical bills, whether or not cost shifting has artificially inflated the amount you’re billed, and whether your bill is fair and reasonable, or if it is egregious. Our team of professional medical negotiators can also go to bat for you.
Simply submit your medical bills to us and we’ll review them and provide you with the amount we believe we can save you. Once you agree to save that money, our team starts working. We do not make any money until the negotiations are over and you’ve saved. Get in touch with us today to learn more.