At the beginning of last year the Kaiser Family Foundation issued a report examining how high medical bills can cause enormous financial problems leading, in some cases, to bankruptcy. The study identified seven features or themes which can explain why 1 out of every 3 Americans suffer severe financial consequences from high medical debt. The report finds:
- Medical Debt Affects Everyone – the problem cuts across age groups, people with different marital status, income groups up to those earning $100,000 annually and ethnicities; but, for most facing financial distress, it is the first time they have so faced this particular type of difficulty
- Cost-Sharing Insurance Plans – among those who are injured, the distress arose from having to pay as a result of having cost-sharing plans which leave the insured with high deductibles and co-pays
- Out of Network Coverage – others who are already insured incur high costs caused by the occasional need to seek treatment from providers that are outside of the insured’s plan’s network
- Effect of Limits and Exclusions – The policies which many insureds have had will not cover for pre-existing injuries and, often contain either lifetime or annual caps which would not provide coverage beyond a particular dollar level ( applicable to those policies in effect prior to date of exchanges under Affordable Care Act for treatment received before its effective date)
- Related Problems Exacerbated the Medical Debt – many insureds could not track what had been paid, what was owed, and what had been transferred to collections; also many people could not work during their recovery and did not have the kind of disability insurance necessary to ameliorate that problem
- Snowball Effect – the problem worsened as new bills had to be covered by credit cards generating higher interest payments and finance charges
- Collateral Impacts – medical debt leads to impairment of credit rating, depletion of retirement or college savings, loss of homes to foreclosure, and/or foregoing basics such as home heating.
As a result, medical debt continues as the main cause of bankruptcies, particularly Chapter 7 bankruptcies.
In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases and can specifically provide advice as to disposition of property in Chapter 7, Chapter 11 and Chapter 13 cases.. The New Mexico firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.