Medical Insurance Cost
A recent survey found that almost half of those persons filing for personal bankruptcy did so due to high medical debt. What was perhaps most disheartening about the survey is that many of those filing such cases had Health Insurance. Conducted by the Harvard Medical School the survey concluded that as many as 2 million people were forced into bankruptcy due to the costs of healthcare.
The researchers found that almost three quarters of those that sited medical costs as the reason for filing bankruptcy had health insurance or medical coverage at the onset of the disease or condition that proved so costly. This sends a clear if distressing message that just providing some type of health insurance to the currently 45 million American’s without insurance is no guarantee of protection from financial ruin. It also sends an equally clear message to consumers who currently have or may be in the market for affordable heath insurance, to very carefully examine their health insurance policies for loopholes and the limits of coverage.
The study also found that "gaps" in health insurance coverage are a main reason for mounting medical debt. Such gaps can occur due to loss of a job, a dramatic rise in premiums or any number of other factors. The researchers found that even a short gap in coverage could have devastating consequences. It is for those reasons that many insurance professionals and financial planners want to raise consumer awareness of "temporary" or short-term health insurance policies. Many top name insurance carriers offer a short-term product; these are often a very affordable health insurance option to bridge gaps in coverage. These temporary or short-term health insurance policies can be written for as little as 30 days or up to six months. For example, a 22 year old non-smoking female in Wisconsin, a recent college grad who figured it would take a little time till she found a job with health insurance, was able to obtain an 80/20 policy with a 500.00 deductible for a 60 day term with a one time flat payment of under $85.00. A small price to pay for some piece of mind. Other reasons for mounting medical debt that led to bankruptcy were job loss, deficiencies in coverage, and lack of sick days or medical leave when one had to stop work to care for an ailing family member.
The concluders of the study point out that while there is no simple answer to protecting consumers from medical bankruptcy, a closer look needs to be taken at current policies and proposals on the table as regards health insurance reform. Obviously even calls for Universal Coverage will not protect all Americans from medical bankruptcy unless such affordable health insurance was much more comprehensive and inclusive than most policies under the current system. However they do suggest that some type of system that separates health insurance form employment so that job loss does not lead to loss of affordable medical coverage, would benefit many Americans. The insurance industry would seem to agree as more and more companies are making access to affordable health insurance by way of individual and small group coverage possible.