Why Many in Michigan are Seeking Bankruptcy Relief From Medical Debt

Did you know that roughly 23 million in the United States owe over $250 in healthcare costs? To add salt to the wound, at the time of publication of this post, the elimination of health insurance subsidies of the Affordable Care Act (ACA) has sent health insurance premium costs rocketing.

And while ACA insurers are raising premiums an estimated 26%, most enrollees are experiencing larger increases in what they actually pay. As a result, ACA sign-ups are plummeting as higher premiums push them off the plan. Sign-ups are down more than 800,000 from last year and that means a lot of Americans are going without health insurance.

This is a tremendously challenging situation for consumers. Especially given the many dangers of forgoing health insurance. Yet, many feel stuck between a rock and a hard place as medical bills continue to pile up. What can they do? Fortunately, seeking counsel with a Michigan bankruptcy lawyer for medical debt and Chapter 7 bankruptcy can help.

The Dangers of Forgoing Health Insurance

Of course, folks are feeling the tremendous financial pressure that comes with huge increases in premiums when their income remains the same. Not having any sort of health insurance seems, for many, the only solution.

Yet, it’s also a surefire way to rack up medical debt that can quickly drain a savings account. And given that interest rates are at an all-time high with compounding interest on medical debt, credit cards and loans are not a safe, long-term solution.

Plus, it’s particularly easy to pile up exorbitant medical debt from not having health insurance. Here are a few reasons why.

1. Medical Costs Are Often Times Much Higher Without Insurance

People without healthcare coverage are charged the full price for everything from a simple doctor’s visit to a major surgical procedure. And these fees greatly exceed what’s paid by the insurance companies. As such, those without health insurance can’t budget for a potential health crisis.

2. There Is an Increased Risk of Costly Complications

Those without health insurance must often choose between getting necessary care and avoiding overwhelming debt. But delaying or avoiding this care increases the risk of severe complications and long-term health problems. The constant fear of going deep into debt leads to a pattern of avoiding necessary medical consultations, treatments, or procedures until an illness becomes very serious.

3. Preventative Care Services Become Too Expensive

The price of essential preventative care services like annual checkups, screenings, and vaccinations can become way out of reach for those without health insurance. But they are crucial for detecting potential health issues when they are less costly to treat.

4. Medical Emergencies Can Generate Massive Bills and Debt

Without health insurance, a sudden accident or severe illness (perhaps one that went undiagnosed) can lead to hospital stays, surgeries, and a vast array of other treatments that can easily total tens if not hundreds of thousands of dollars. Without coverage, the patient is responsible for paying the full amount.

5. It’s Difficult to Pay for Prescription Medications

Uninsured people must pay full retail prices for prescription drugs and some of these costs are prohibitively expensive. This means many who have no health insurance have to ration or skip needed medication. This can lead to conditions worsening or even hospitalization. As for those with chronic conditions who rely on medication to live, they go deeper and deeper into debt. 

How Filing a Chapter 7 Bankruptcy Can Help

When debt from medical bills becomes too much to handle, many people turn to bankruptcy lawyers to inquire about filing for a Chapter 7 bankruptcy. Filing for bankruptcy because of medical bills is not uncommon. This sort of bankruptcy allows filers to eliminate medical bills by discharging all qualifying medical bills, usually within 90 days. And there’s no limit to the amount of medical debt that can be discharged, giving those drowning in medical debt a fresh start.

Chapter 7 bankruptcy is ideal for those with a limited income who own few non-exempt assets (things such as second homes, luxury vehicles, expensive jewelry, valuable collections, etc.) and need a fast resolution to handling their overwhelming medical debt. There is a means test that determines eligibility for Chapter 7 bankruptcy. But for those who qualify, medical debt and other unsecured debts can be wiped out so they can start new with a clean slate.

Want to Learn More?

Whether your medical debt is the result of experiencing firsthand the dangers of forgoing health insurance or you’ve just gotten behind on payments, a Chapter 7 bankruptcy could get you back on your feet and help you move forward.

Why not speak with an experienced bankruptcy lawyer in Southfield to explore your options? Contact us today. The skilled bankruptcy attorneys at Gold, Lange, Majoros, and Smalarz can help you determine the best path towards paying off medical bill debt or pursuing bankruptcy as a solution.