It is a sad and unfortunate truth that medical expenses have skyrocketed over the last several years. The fact that so many people have lost their jobs – and thus their health insurance – during the recession has only made matters worse.
Of course, a serious illness or injury can be financial devastating, even for people who have insurance. Between copays, deductibles and benefit caps, it does not take long for the bills to spiral out of control. Indeed, medical debt is now one of the leading causes of consumer bankruptcy, both in Texas and throughout the United States.
According to an article published in the New York Times, approximately 20 percent of people who sought credit counseling – a precursor to filing for bankruptcy – in 2011 did so primarily because of overwhelming medical debt. By comparison, the rate was about 12 to 13 percent in 2009 and 2010.
Medical bankruptcies present some unique issues. For example, many people tend to be reluctant to default on their medical bills. Even though they do not have the money, they want to pay the doctors who worked to make them well. Instead, they rely on credit cards to make up for the money they spent on their medical bills.
Though this may help solve the short-term problem, over time, interest rates and late fees compound to the point where even the minimum payments are no longer manageable. The problem is even worse for individuals whose illnesses or injuries are so severe that they can no longer work.
It is important to remember that bankruptcy exists for this very reason. No one should ever have face financial ruin simply because they got hurt or became ill. Bankruptcy law is set up to protect people and help them get back on their feet.
Tips for Handling Large Medical Bills
Bankruptcy does not necessarily need to be a person’s first option, though. Often, large medical bills can be managed with some proactive steps. If you have recently undergone significant medical treatment, you may want to consider the following tips:
- Check your bills: It is not rare for billing mistakes to be made. If your bill seems high, check it against your Explanation of Benefits statement to make sure you are only getting billed for the care you actually received.
- Ask for a discount: This is especially true if you are uninsured, as many health care providers negotiate lower rates with insurance companies than they charge to individual consumers. If you explain your situation and ask for a discount, they might work with you.
- Set up a payment plan: Sometimes a bill that is too big to be paid at once can be broken down into more manageable chunks. Be sure to get the agreement in writing, though, so you don’t run into more trouble down the road.
- Don’t ignore problems: If bills are piling up and creditors are calling, the worst thing you can do is ignore them. Your account will likely be turned over to a collections agency, which can have a devastating impact on your credit score.
If you are struggling with medical debt, know that there is help out there. A Texas bankruptcy attorney can evaluate your situation and help you understand your options.