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Why those with health insurance often still end up with medical debt

On Behalf of | May 1, 2023 | Medical Debt

Health insurance assists people with the basic costs of maintaining their health and treating any concerns that arise. People trust that the health insurance they purchase or receive through their employer will allow them to get the care they require if they have a medical need for support.

Unfortunately, even those with insurance may sometimes find themselves unable to cover the costs of their treatment and will therefore end up with a large amount of debt. These are two primary reasons that people with health insurance may end up owing a lot of money for their medical treatment.

1. Their policy comes with major patient responsibilities

Health insurance providers often seek to pass on the cost of someone’s treatment to the patient. Doing so reduces what they pay and can deter people from seeking out unnecessary treatment. Unfortunately, companies often go to an extreme in their attempts to make people accountable for their healthcare costs. They impose deductibles that force people to pay thousands of dollars before the company will cover any of their treatments. They also assess a coinsurance that could require someone to pay a flat percentage of the cost of their treatment. Patients can end up with huge medical debts if they have to have surgery or go through chemotherapy treatment because of coinsurance.

2. They require treatment the company doesn’t cover

For those with cancer, autoimmune disorders and other hard-to-treat health issues, the best treatment options may be forms of care that an insurance company doesn’t cover. It is only when there is clinical evidence of the efficacy of specific treatments and standards in place to administer that treatment that insurance companies will usually cover those treatments. Those who want to try immunotherapy or new drug cocktails may have no choice but to agree to pay their costs out of pocket.

Thousands of adults with medical debt end up filing for bankruptcy each year because they realize that they have no other way to regain control over their finances. Understanding how medical debt accumulates even when someone has insurance can help them make a more rational choice about whether or not to file for personal bankruptcy.