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Medical debt is the biggest cause of bankruptcy

For many Tennesseans, the idea of bankruptcy conjures up images of irresponsible credit-card purchases and poorly executed businesses. The reality is far different. In fact, another scenario is the usual answer to why a person files for bankruptcy - medical debt.

Consider an example. Following a herniated-disk surgery, the patient (let's call him Jim) expected the more than $50,000 in hospital charges. He was prepared for the $4,300 anesthesiologist bill and he had planned for the $133,000 orthopedist fee. But what he did not anticipate was the hospital including an out-of-network assistant surgeon to the surgical team. That last-minute addition meant Jim owed an additional $117,000 that was not covered by his insurance carrier.

Jim is not alone. These kinds of practices are one of the reasons that medical bankruptcy is the leading form of personal bankruptcy.

The gap between medical debt and other types of debt is significant. For example, nationwide medical debt is triple bank and credit-card debt combined. And, in a given year, one in five of us will have the misfortune of hearing from a medical-debt collector.

Fortunately, there are some things that Tennesseans can do. First, before scheduling the appointment, do your homework. Hospitals do not have consistent pricing. They vary wildly from procedure, so call around and ask. Second, after getting the bill, look it over carefully. Most medical bills contain mistakes (63%, according to NerdWallet). Many of those mistakes incorrectly inflate the bill.

These steps notwithstanding, the high price tag of medical treatment means that medical debt will remain a problem for the foreseeable future. When those bills get too high, Tennesseans may benefit from discussing their options with an experienced medical-bankruptcy attorney. Doing so could be the first step towards moving past an unlucky time and towards a fresh financial future.

Source: The Atlantic, "Why Americans Are Drowning in Medical Debt," Olga Khazan, Oct. 8, 2014

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
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