Medical Update: More costs likely to be passed on to consumers
According to an article this Sunday in the Dallas Morning News, “It’s open season, and time to rethink your health plan,” this is the year to rework and review your health insurance coverage. Over the last several months, many workers crammed in last minute medical care in anticipation of job loss and thereby insurance coverage. As a result, insurance companies paid out a higher numbers of claims and incurred more expenses. Those same companies are now passing the expenses on to consumers like you in the form of higher premiums and changes in coverage. This could lead to an increase in debt due to medical bills.
Open enrollment forms
The article warns workers to pay extra attention to their open enrollment forms this year. Either because of complacence or convenience, many people simply sign their open enrollment forms each year and continue on. The DMA article strong encourages you to review your forms this year in particular for changes. Look for changes in deductibles, premiums, and coverage options. Many carriers are expected to obviously increase premiums for coverage, which means your employer is likely to pass some of those costs on to you.
Changes in what the program will cover
Also look for changes in what the program will cover. If you have regular services or medications, make sure that your plan will still pay for them. The main goal is to understand what your potential medical liability is so that you can effectively plan for those expenses. If you don’t understand a plan or you need for information, review the summary plan descriptions and talk to your human resources department for clarification. After you understand what’s available, your debt management approach can become more proactive in the form of maximizing flexible spending accounts, generic prescription plans, and good budgeting.
Be prepared to pay more
Not surprisingly, the main message is that costs are rising, so be prepared to pay more for medical care. Even with the best planning, however, debt due to medical bills tend to blind side people. Flexible spending accounts can be quickly absorbed by one medium, not necessarily major, illness or injury. More plans are raising the co-pays for non-generic prescriptions in an effort to force more consumers to opt for generics.
The concept is generally palatable, except when no generics are available and you’re stuck with a $50+ per month co-pay. Before you can get one bill paid, another one seems to trickle in behind that last one. Meaning, that unlike credit card debt or regular expenses, it can be almost impossible to control medical expenses, especially when you are experiencing a medical emergency situation.
Congress is still debating and likely to continue debating the best way to control health care expenses. In the mean time, you’re still stuck with the after trauma of a huge medical bill. If you are overwhelmed by medical debt an immediate option available to you is bankruptcy. Many people don’t like the concept of bankruptcy, but it is important to review it as an option because it is one of the few relief mechanisms available to a wide range of consumers.
Contact our bankruptcy lawyer about debt due to medical bills
You don’t have fill out twenty pages of red tape just to get into the door of some government agency to see if you begin to qualify for help. You do need to make an accurate list of what your obligations are so that you can review them with a bankruptcy attorney. A qualified bankruptcy attorney can then work you through the process and file your petition for you. They will also serve as your advocate to guide you through the process, so you don’t have to be alone through the process. The best cure for a high medical debt is bankruptcy. Contact a qualified attorney in the Dallas-Fort Worth area today to get a consultation today.
Corporate Bankruptcy Burdens Workers With Debt Due to Medical Bills
There’s a very interesting article in the Rapid City Journal, which may serve as a sign of things to come. The article features the story of a family that is strapped with over $100,000 in medical bills because their employer went bankrupt.
Jennifer Roberts was facing a cancer diagnosis; but since she and her husband were paying their medical insurance premiums they believed that the cancer treatment would be covered. But just to be on the safe side they checked with their employer who was in bankruptcy and with the health provider, who both gave the green light and assured Jennifer and her husband that the medical procedures would be covered. They were wrong and ended up with over $100,000 in unpaid medical bills after they company they worked for failed to pay for their group health insurance.
Now the Roberts family is facing a huge medical bill and has no way to recover the damages from their bankrupt former employer. But what’s interesting is that this couple is actually attempting to pay this huge debt without the help of bankruptcy.
The article said:
So for the employees struggling with unpaid medical bills, there’s no hope unless health care providers are willing to cut some payment deals with their former patients. It’s the only options the Pope & Talbot employees have left.
Rather than file as a creditor in the bankruptcy courts, the Eye Institute opted to work with patients on payment plans instead, Anderson said. She said the Eye Institute gives patients time to get their bills paid off. “It’s not like we expect them to pay it off in six or 12 months.”
There is help for employees struggling with unpaid medical bills — bankruptcy. Bankruptcy is not just designed to protect corporate assets; it is also designed for these types of situations where ordinary people are faced with extraordinary debt through no fault of their own. This couple needs to be very cautious about signing any agreements to repay this debt with the medical providers. Debtors facing huge medical bills need to ask themselves — can this debt be repaid within a reasonable amount of time under the repayment plan being offered by the creditor? Or, would bankruptcy offer more favorable terms? If you’re facing unplanned and very large medical bills contact a Dallas-Fort Worth bankruptcy attorney today to discover your options for repaying or discharging those medical bills in bankruptcy.
More Debt Due to Medical Bills for Senior Citizens as Healthcare Costs Rise
More senior citizens may face mounting medical debt as monthly premiums rise on popular Medicare Advantage plans with drug benefits. Senior citizens enrolled in Medicare Advantage plans with drug benefits will see an increase of 14.2 percent for their monthly premiums this year as opposed to the 5.2 percent increase they experienced from 2008 to 2009.
The health insurance industry blames the increases on cuts in government payments to insurers that offer Medicare Advantage plans.
Medicare pays a fixed amount every month to the companies offering Medicare Advantage plans. The government reduced its payment rates this year by about 4 percent per enrollee because of changes in federal laws passed in 2006 and 2008, according to the Centers for Medicare and Medicaid Services.
Now Congress is considering more than $100 billion in additional cuts to Medicare Advantage that Zirkelbach said will result in even higher premiums and reduced benefits for more than 10 million seniors in the program.
Regardless of funding decisions which will impact the Medicare program, senior citizens will need healthcare coverage. And without adequate coverage many senior citizens will experience an increase in their overall medical debt. Medical debt is one of the leading causes of financial distress for senior citizens and one of the most common reasons seniors file for bankruptcy. Seniors who depend on the Medicare program even if it is supplemented with private insurance need to make sure that their coverage is adequate enough to avoid incurring medical debt. If you are a senior citizen who is already suffering under distressing medical debt, you may want to consider your bankruptcy options. Bankruptcy has the power to discharge medical debt allowing senior citizens to enjoy their golden years medical debt free.
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If you have debt due to medical bills, contact us today.
Will the New Health Care Bill Reduce Medical 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 debt due to medical bills. 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 debt due to medical bills. This provision could help keep many seniors stay out of medical bankruptcy.
Debtor’s Credit Score Takes a Beating With Debt Due to Medical Bills
According to an article in the Dallas Morning News, medical debt can have a huge impact on a debtor’s credit score affecting their ability to obtain home loans, credit cards as well as the interest rate they’re offered. The article focuses on the story of Steve Smith who suffered a heart attack during a lapse in his health insurance.
The article said:
“When Steve Smith had a heart attack in 2006, the last thing on his mind was the impact on his credit report. But because of a gap in his insurance, the 59-year-old Smith was hit with medical bills totaling about $70,000 – $8,000 from his surgeon and $62,000 from the hospital. “At first, all of them went to collections because I couldn’t pay any of them,” said Smith.”
Fortunately for Smith, the hospital reduced his medical debt to about $15,000 which he was able to pay off three years ago; however, the medical debt impact on his credit is still there. Despite paying off his debts, his credit score dropped significantly and now he’s having difficulty refinancing his home. Plus he is still on a payment plan for his heart surgeon.
Would bankruptcy have been a better choice? Maybe. Over 72 million working-age Americans are suffering from medical debt, many of those debts have gone into collections. Negative marks such as collections action on medical debt remains on a consumer’s credit report for 7 years and many lenders consider the medical debt when determining the consumer’s creditworthiness. And unlike Smith, most consumers are simply unable to repay medical debt AND their other obligations such as their mortgage, credit card bills and everyday expenses. Bankruptcy will wipe out the obligations to repay unsecured debt, including medical debt and give the debtor an opportunity for a stress-free financial fresh start. A matter of fact, a creditor may be more willing to lend to a debtor who have discharged his debt obligations in bankruptcy than to a debtor who is still obligated to pay thousands towards medical debt obligations.
Even “The Hulkster” Can’t Wrestle With Debt Due to Medical Bills
Hulk Hogan Files Bankruptcy
During wrestling celebrity Hulk Hogan’s (Terry Bollea) divorce from Linda Hogan (Linda Bollea) finances were a constant point of battle. His ex-wife accused him of hiding assets and Hulk Hogan claimed that he was drowning in medical debt.
Here’s a snapshot of just what that battle looked like back in March:
Lawyers for Hulk Hogan filed documents requesting $300,000 of the his frozen assets. The hulkster had surgery on his back last month and said he is subsequently unable to work as a result. The documents claim Hogan’s bills eclipse $300,000 and he only has $411,000 in his bank account. Linda Bollea, his ex was granted attorney fees of $400,000 late last year.
For all of you suffering from medical debt, please take note. Even the hulkster can pin down medical debt, it’s just too much. Medical debt is a very powerful force that can send you to bankruptcy immediately or wipe out all of your assets. Think about it, even Hulk Hogan, who I am sure had medical insurance, was left with a whopping $411,000 in medical debt.
How Many Ordinary People Can Handle That Type of Medical Debt?
Not many. And not many ordinary people have $400,000 laying around in their bank account. So do yourself a favor if you are facing a large amount of medical debt, please do not go broke trying to pay it. It is good to pay your bills, but it is not good to destroy your finances in the process of paying medical debt or other types of debt.
There is nothing wrong with using bankruptcy to discharge or repay that medical debt under reasonable terms. Remember, Chapter 7 bankruptcy will discharge unsecured debt and Chapter 13 bankruptcy will allow you to repay your debts under reasonable terms in a 3 to 5 year period. And even in Chapter 13 bankruptcy some of your debt may be discharged.
Can a Healthcare Overhaul Reduce Medical Bankruptcy?
The Obama administration and legislators are currently debating the feasibility of health care reform. Senate majority Leader Harry Reid made an interesting observation about how medical debt often influences a debtor’s decision to file for bankruptcy:
“In 2008, about 750,000 bankruptcies were filed. About 70 percent of those bankruptcies were filed because of health care costs. Eighty percent of the people who filed for bankruptcy because of health care costs had health insurance. America is the only country in the world where if you get sick or hurt, you’re going to have file for bankruptcy.”
Many people who were otherwise financially secure and responsible have been forced into bankruptcy due to overwhelming medical debt. Many of those people, as Senator Reid suggested, had medical insurance. How many times have Americans found themselves with a medical bill when they thought they were covered? This is especially prevalent with poorer Americans who depend on cheap “emergency” medical coverage that doesn’t cover them fully. Many people with inadequate insurance end up getting sick and getting hit with medical debt they can’t pay. The vast majority of them struggle to pay the medical debt anyway and jeopardize other things in their lives such as their home because they are late paying their mortgage or the future because they pay medical debt instead of funding a retirement account.
The problem with debt due to medical bills is that it is not “sized” for the average person with an average salary. How many people can cough up $40,000 or even $3,000? Not many. When hit with a large bill the average person is better off filing bankruptcy. But, what if an overhaul of the health care system included a system of medical debt forgiveness for low-income and moderate income Americans? A medical debt forgiveness program alone could go a long way in reducing the number of people filing bankruptcy because of medical debt.
Will Retirees Face Debt Due to Medical Bills as Companies Cut Benefits?
According to an article in the Star-Telegram, American Airlines is dropping health insurance benefits for it’s non-union retirees over 65 year old as the company battles to avoid bankruptcy.
The article said:
“American officials said Tuesday that letters went out to 5,500 retirees last week. The insurance plan will end Dec. 31, leaving retirees with the option of paying the full cost of their own coverage to supplement Medicare…The changes do not affect American’s union employees, including pilots, flight attendants and mechanics. But American has made a similar proposal in contract talks with the airline’s three unions.”
American Airlines has been locked in an intense battle with three of its unions as it tries to free itself from health insurance obligations to union retirees to avoid bankruptcy. But the question many analysts have is how many more companies will choose to abandon their healthcare obligations to retirees? Already, millions of senior citizens are drowning in medical debt as healthcare costs rise and many insurers charge astronomical rates for anyone who has pre-existing conditions.
Even with insurance and Medicare, some seniors are saddled with unmanageable medical debt because they need expensive procedures, medication or health regimens that are not covered or only partially covered by their health insurance. Medical debt is one of the leading causes of seniors filing bankruptcy and if companies are allowed to drop retiree health insurance coverage, the numbers of “medical” bankruptcies are going to rise. Currently, only bankruptcy can relieve seniors from the burden of paying medical debt. Filing Chapter 7 bankruptcy will allow many seniors to discharge their medical debt and get a fresh financial start.
Cancer and Debt Due to Medical Bills
According to Cure one of the big side effects of cancer is financial toxicity. It’s easy to rack up medical bills when fighting for your life against cancer, in addition to the co-payments, the deductibles, the uncovered costs, the days and hours lost from work, the trips to the doctor, the bills climb quickly and it’s been reported that the bankruptcy rates increase fourfold within five years of a cancer diagnosis. When compared to the general population, bankruptcy rates are nearly twice as high among cancer patients one year after they receive a cancer diagnosis.
This startling fact has led to oncologists dubbing the medical debt a cancer patient struggles with as financial toxicity. It’s a sad fact of illness in this country, if you want to be healthy and survive you’re going to accumulate debt along the way.
There are some places cancer patients can turn to for assistance to help them deal with the financial toxicity of cancer. Nonprofit groups and charities across the country are established to help cancer victims and their families deal with a variety of issues that come up after a cancer diagnosis, from the emotional and physical to the financial. Looking for help from these groups can provide the support you need through this illness.
Sometimes it’s best to go to the source to look for financial help. Your healthcare provider and the pharmaceutical company that makes your prescriptions may have help available to you. You can ask for assistance and if they’re unwilling to provide it, turn to a non profit organization to stand behind you and request assistance on your behalf.
Medical Debt Threatens Hospital’s Profitability
According to an article in the Dallas Morning News, Texas Health, a $2.6 billion revenue hospital system with the largest market share in North Texas North was forced to implement job losses on Monday. Due to a sharp increase in the number of patients unable to pay their medical debt, Texas Health said they will implement additional job losses to protect its future viability.
The article said:
“The system’s joint-venture hospitals with physicians are profitable and continue to grow as a percentage of the company’s net patient revenue, up 8.6 percent, or $215 million, in 2008.
But sharp increases in Texas Health’s unreimbursed medical care given to the uninsured and underinsured have strained its balance sheet. In his letter, Hawthorne said Texas Health is seeing more patients who are having difficulty paying their bills. This bad debt increased to $57 million in the first quarter, up 15 percent from $49 million in the same quarter last year.”
As millions of Americans lose their comprehensive health insurance due to job losses many more hospitals may become threatened by an increase in uninsured and underinsured patients unable to pay their medical debt. The medical debt accumulated by these patients will be almost completely unrecoverable due to do the patient’s lack of income, assets and their access to bankruptcy relief. Once the number of patients unable to pay their medical debt reaches a tipping point we may see more hospitals filing bankruptcy because they are unable to survive, especially those located in low-income communities.
For those patients who need relief from mounting medical debt, Chapter 7 or Chapter 13 bankruptcy may be the best option.
Bankruptcy Court Conceals Debtor’s Identity Due to Medical Disclosures
In the bankruptcy case of L.K.; In re, (Bankr. E.D.N.Y. 2009), a debtor’s request to seal her records due to sensitive medical information revealed during the proceedings was denied; but the bankruptcy court agreed to conceal her identity in court records.
The details of the bankruptcy case:
A Chapter 7 bankruptcy debtor asked the bankruptcy court to seal her records because an adversary proceeding contained extremely personal medical information that if made public could make it difficult for her to find a job. The medical information revealed included a diagnosis of severe depression and psychiatric treatment.
The bankruptcy court refused to seal the records because they ruled that the information revealed did not rise to a “scandalous or defamatory” level. Instead, the court said that the medical information included in the bankruptcy documents could possibly hurt the debtor’s future employment prospects due to the stigma still attached to mental illness and agreed to conceal her identity.
Many debtors are afraid to file bankruptcy because they are embarrassed by the information that will be revealed and/or fear that the information revealed during bankruptcy could affect their future employment prospects or their social standing in society. Fortunately, the bankruptcy court has put into place safeguards will take into consideration the harm information revealed during bankruptcy could do the debtor.
Bail Out Bill Covers Mental Health Medical Bills
Buried deep within the novel length Bail Out bill passed last week, is a provision known as the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 requiring employers to equally cover mental health costs in their health coverage plans. The provision states that financial requirements and treatment limitations for mental health care, if covered, cannot be any more restrictive than those put on the group plan’s other medical and surgical benefits. What that could mean is that employees suffering from mental health issues would be able to continue coverage as they visit mental health professionals until they are deemed healthy. Currently many mental health plans limit the number of visits to mental health professionals.
Many critics of the provision fear that the new law will scare employers and prompt them to end any existing mental health coverage they offer employees because of the additional costs associated with extending that coverage. Already, health care costs in the Dallas area have increased 8.1 percent this year, up from 6.6 percent in 2007, according the Dallas Morning News.
Americans Finding Creative Ways to Reduce or Avoid Debt Due to Medical Bills
Because of an increasingly unstable economy, many Americans are going without medical insurance, simply because they can’t afford it. But if they’re not careful the uninsured may face crushing medical debt from even the smallest illness. Because those without medical insurance depend on the emergency room to handle every type of illness from the flu to an infection, medical debt can quickly pile up. But an article in the Dallas Morning News offers some savvy tips for the uninsured to reduce or avoid medical debt.
Here are just a few:
- Avoid emergency room visits when possible.
The emergency room should only be used for
life threatening conditions.
- Use clinics and free health fairs to diagnosis conditions
such as diabetes and high blood pressure.
- Use generic drugs, their cheaper and work just as well.
- Use free or community clinics for vaccinations.
If you find yourself in an emergency room, ask the staff what procedures and medications are unnecessary (i.e. extra tests, brand name drugs etc.) so you can save money and avoid medical debt.
Company’s Failure to Pay Health Insurance Leaves Employees Swimming in Medical Debt
According to an article in the Dallas Morning News, Pennsylvania’s attorney general is suing Turbine Airfoil Designs, Inc. a Texas company, for allegedly not paying employees’ health insurance premiums for five months despite the fact that the company was deducting a portion of the employees’ paychecks for health insurance. Because of the company’s failure to pay the insurance, Capital BlueCross retroactively canceled coverage, leaving many employees with tens of thousands of dollars in unpaid medical debt.
The article said:
“The civil suit, which names the company’s chief executive officer, president and chief financial officer, seeks full restitution for the 90 employees of the company’s former Harrisburg plant and thousands of dollars in fines…The financially troubled Turbine Airfoil stopped paying its health-insurance premiums in October 2008 without telling the employees, even though it continued to deduct the employees’ portion from their paychecks…”
One employee was even left with $70,000 in medical debt after he had an operation in February to fix an aortic aneurysm. Capital BlueCross claims that it is searching for ways to help the employees; but in fact some of the medical debt has already been referred to collections. Hospitals are charging the employees at the full rate, not the discounted rate offered the insurance company and aggressively pursuing employees for payment.
What will happen to these employees if Turbine files bankruptcy or simply does not pay the medical debt? Most likely the creditors will still pursue the employees for payment of the medical debt until they are either paid via the bankruptcy of Turbine or receive payment from the employees. It’s a patently unfair situation.
More Texans Eating Fast Food May Create More Debt Due to Medical Bills
There’s an interesting article in the Dallas Morning News which talks about how the fast-food industry is “recession resistant” because more Americans are going the cheaper albeit unhealthier route when eating out by eating fast-food more often. Raising Cane, a fast-food restaurant which serves only chicken fingers was featured as a success story in the midst of many retailers and restaurants going bankrupt.
The article said:
“Our restaurants are doing exceptional,” said Todd Graves, founder, Raising Cane’s. “We grew over 20 percent this past year. We’ll grow over 20 percent this year. Our same store sales were in double digits…People are busy and people still love to eat out,” Graves explained. We’re not seeing them go back to the kitchens and cooking. So they want a place to go so it needs to serve that right price point.”
The article also noted that McDonald’s posted a seven percent increase in sales in the last quarter mostly due to its dollar menus. The article painted this as a silver lining amidst the bankruptcies strangling our economy; but is it really good news? Many of these Americans are being forced to eat the unhealthiest food because they are working more hours (less time to cook) and making less money, so they go to fast-food joints and spend a dollar for some filling although artery clogging food. As more workers and unemployed people go without health insurance, what is going to happen to them when they develop hypertension, high blood pressure or even heart disease because they spent a year or two eating “happy meals” because they were living off of reduced wages or unemployment insurance? They will go to the hospital; but they are going to be straddled with huge amounts of medical debt. As the number of Texans dining at fast-food restaurants increase so will the amount of Texans working just to pay off medical debt. If this trend continues expect to see more Texans facing mounting medical debt and filing bankruptcy just to get relief from health related bills.