Medical Bankruptcy: Are YOU At Risk?

Medical Bills and Bankruptcy

Meet Julianna.

Julianna, an emergency room nurse,  driving to work, took just a second to reach for her coffee cup.  The Tahoe’s right side barely left the pavement.

Julianna  jerked the wheel in surprise-spilling  hot coffee on her lap.

Her eyes opened to a world upside down.  Really, she was upside down- held in place by her seat belt.  She could hear someone yelling but couldn’t make out what they were saying.

Looking up, or was it down, she noted one leg had a right angle that wasn’t there just a few minutes earlier.  The most frightening thing was it shoulduv hurt, but didn’t….  She tried to reach for the seat belt, but her arms, hand, or fingers wouldn’t answer the call.

The second time her eyes opened was to  the sound of beeping.  She realized the beep matched her own heartbeat.  She couldn’t look around as her head seemed to be fixed in a metal contraption.

From her medical training she knew at once this halo was fixed into her skull with screws.  She knew  this particular halo was not a sign of heaven, but a sterile version of her  own new special hell.

A year later  her children were being cared for by her parents, while she learned how to blow into a straw to make her wheelchair turn right or left.

She had just signed her bankruptcy papers-her tears staining the legal documents.   She didn’t care.  The things she worried about now were so much different than what she worried about a short 12 months ago.

Julianna’s tragic plight is an all too common cause of bankruptcy.

Medical Bills and Money

Medical bills that are significant enough to cause bankruptcy come from two illness types:

1. Acute injury or illness of the major breadwinner of the family-Julianna’s wreck is a perfect example.
2. Chronic illnesses requiring expensive long term care-cancer being the most common.

An injury or serious long term injury gets you in two ways.

1. Medical costs-can be unbelievable.  A lengthy stay in ICU and  prolonged therapy can result in a 7 figure bill.
2. Disability-you aren’t working so have no income.

What are the most expensive medical conditions?

• Heart disease
• Chronic pulmonary disease
• Mental illness
• Injury
• Cancer
• Chronic arthritis

What can you do?

Health Insurance

You may think if you have health insurance you will be immune to the devastating financial effects of a major illness or injury.  Think again, Grasshopper.

A Harvard study in 2007 reported that many families with health related bankruptcy had coverage when the illness started.

“Ok, Dr Dean,” you say,  “having health insurance is not enough, and  you list all these expensive, but common, medical conditions-what can I do to protect my family?

An ounce of prevention is worth a pound of cure.

Remember that old saying attributed to Benjamin Franklin?

Today Ben might say:

Free prevention may save you millions in the cure…

How is that?

Over 1/2  of chronic illness is preventable.

And no I’m not saying that your cousin’s leukemia was her fault.

Preventable Illness

But I am saying that much of the diabetes, heart disease, hypertension, and even joint pain is directly attributable to our lifestyle.

And statistics say many of our auto accidents are related to alcohol or distracted drivers.

• We eat too much-the obesity epidemic is so rampant some politicians are calling out fast food restaurants. (heart disease, diabetes, hypertension, joint replacement)
• We drink too much.(heart disease, diabetes, mental illness, trauma)
• We don’t exercise enough. (heart disease, diabetes, hypertension, mental illness, arthritis)
• We don’t get enough rest. (heart disease, mental illness)
• We drive too fast, or drive distracted.(trauma)
• We don’t wear seat belts in the car or helmets on the bike. (trauma)

These are just a few of the lifestyle issues that put us at risk.

Combine that with the average person’s credit card  debt, huge student loans, and no significant savings…It doesn’t take a psychic to see disaster coming.

Protecting yourself and your family

Besides living in a bubble  what are a few common sense things each of us can do to protect our family from financial devastation due to illness?

• Obtain health insurance-yes I know it is expensive.  Even if you can’t afford full coverage, there are catastrophic policies to help pay for devastating illnesses.
• Disability insurance-this replaces your salary if you can’t work. (and no I’m not talking about “duck” insurance or short term disability-but long term.
• Avoid consumer debt and have savings you can turn to for emergencies.
• Maintain a healthy lifestyle, and a healthy respect for you, your family, and the other guy while driving.

Doing these things may not always prevent financial devastation.  Life just happens at times and none of us are immune.

Even the well prepared may not be able to handle the  enormous costs.

Knowing you’ve done all you can, though, will provide peace of mind.

That may be all we can ask for.

{photo credit: dospaz c.c.}

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Tags: bankruptcy from injuries or illness, injury related bankruptcy, medical bankruptcy, money problems related to health issues

This entry was posted on Wednesday, June 22nd, 2011 at 8:18 am and is filed under personal finance, Quality of Life. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.