Medical costs can be very high in the United States. To some degree, it is not surprising that medical bills are one of the top reasons cited in bankruptcy cases. A single medical emergency could leave someone with more debt than they can realistically repay.
However, many Americans purchase health insurance plans. Some believe that these plans will prevent a bankruptcy filing because the health insurance provider will cover the vast majority of their expenses. Why doesn’t this work, and why is medical debt still one of the leading causes of bankruptcy?
Out-of-network services
There are many potential reasons, but one is that people may receive out-of-network services. Even though they have health insurance, they may only be covered for services provided within the insurer’s approved network. The insurance company may deny claims for out-of-network care.
But a simple misunderstanding could cause someone to seek treatment from an unapproved healthcare provider. Or an emergency situation could mean that a person does not realistically have time to determine which hospitals or specialists are actually within their network.
On top of that, even when someone does receive in-network services, they may still be responsible for paying their deductible. If the deductible is very high, this expense, combined with other debts – such as credit card balances, mortgage loans and car loans – could still lead to a bankruptcy filing. The medical debt is simply one component of the overall financial situation.
What are your legal options?
Have you found yourself facing overwhelming debt that includes high medical bills? You may be able to use Chapter 7 or Chapter 13 bankruptcy, so be sure you know exactly what options you have.
