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Even people with health insurance can accrue major medical debt

On Behalf of | Feb 2, 2021 | Bankruptcy

Medical debt can sneak up on people. It only takes one heart attack, car crash or other adverse medical event to put someone out of work and drastically alter their household financial circumstances.

Quite a few people think that because they have health insurance, they have protection from financial devastation because of an injury or illness. What people often fail to consider are the major gaps between what the best medical care costs and what health insurance providers actually pay.

Even those with very good health insurance can wind up with tens or even hundreds of thousands of dollars in medical debt.

Patient responsibilities in insurance policies are higher than ever

Insurance companies have found many ways to pass some of the costs of medical treatment on to the person who holds the policy.

Co-pays have been around for a long time and involve a patient paying a flat-rate fee each time they need specific kinds of medical care. There may be different co-pays for different scenarios. Some policies have co-pays for emergency room visits that are hundreds of dollars.

People also may have coinsurance requirements that charge them a percentage of the total medical costs they incur. They may also have to pay a deductible of thousands of dollars before they get any of that coverage.

Sometimes the care you need isn’t eligible for insurance coverage

Your insurance provider won’t just pay for anything that your doctor deems medically necessary. They restrict what they cover, especially when it comes to chronic illnesses, cancer and other costly medical situations.

Newer treatments may not yet have any sort of coverage because the company classifies them as experimental. It’s also possible that the insurance company may demand that you see a different doctor than you want to or that you use alternate therapies and drugs so that they can save some money. You might choose to do with what your doctor recommends instead, which means you will have to pay the price for that care.

Coming out of a time of medical hardship only to face staggering debt is an unfortunate reality for many people, even those who once thought they had good health insurance. Bankruptcy discharge can potentially eliminate medical debts and could even halt a potential lawsuit from a hospital or an attempt to place a lien on your property because of medical debt.