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Will The New Health Care Bill Reduce Medical Bankruptcy?

Posted By admin || 2-Apr-2010

Medical Bills and Bankruptcy

Sunday night, legislators in the House of Representatives voted for the historic health care reform bill which will be signed into law on Tuesday by President Obama.  But will this shift in how Americans receive health care impact the number of medical bankruptcies in this country.  Well let's take a look at some of the provisions in the new bill. What will become effective immediately? Health insurance companies are now forbidden from refusing coverage, canceling coverage or hiking up the health insurance premiums of individuals who have pre-existing conditions.  This provision alone has the possibility of reducing the amount of medical bankruptcy filings we see amongst Americans who have pre-existing conditions or who have been diagnosed with and/or are receiving treatment for a terminal illness.   Health insurance companies are now forbidden from placing life-time limits or annual limits on health care coverage.  What this mean is that persons who are being treated for serious illnesses such as cancer and HIV will not be hit the devastating blow of loss coverage after reaching their limit.  This could also do wonders for reducing medical debt amounts for the ill and preventing many medical bankruptcy filings.  Health care insurers will be required to provide coverage for non-dependent children up to age 26.  This provision in the new law will help many young people graduating from college or who are in-between jobs soften the blow of medical debt.  While most young people are healthy, because they do not have the ability to get health insurance if they are unemployed and cannot be placed under their parents' health insurance plans, they are also vulnerable to medical debt and even a bankruptcy due to medical expenses.  And finally, the Medicare prescription drug plan will close its coverage gap. Currently, Medicare stops covering drug costs after a plan and beneficiary have spent more than $2,830 on prescription drugs and begins paying again after an individual's out-of-pocket expenses exceed $4,550.  This gap is expected to begin closing by 2011.  Many seniors are forced into bankruptcy because of the exorbitant medical expenses. This provision could help keep many seniors stay out of medical bankruptcy.
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