Friday, February 23, 2007

Pay Now Or Pay Later

Health insurance is something of a luxury for the majority of Americans, unlike the situation I was accustomed to when raising a family. Back in the good old days, working folks got insurance through their employer, catastrophic coverage was there if dreadful things happened, and the insurance covered the costs. Children were secure, and when you visited the doctor the insurance paid a good portion of the cost.

You are intelligent, so you know where this is going.

The total number of people directly affected by medical bankruptcies in the U.S. has risen to more than two million annually, according to an article published online today in the journal Health Affairs.Medical problems contributed to about half of all bankruptcies, involving 700,000 households in 2001, the authors report. Families with children were especially hard hit; about 700,000 children lived in families that declared bankruptcy in the aftermath of serious medical problems.
Another 600,000 spouses, elderly parents and other dependents were affected.

Three-Quarters Were Insured

Surprisingly, most of those bankrupted by medical problems had health insurance. More than three-quarters were insured at the start of the bankrupting illness. Among those with private insurance, however, one-third had lost coverage -- at least temporarily -- by the time they filed for bankruptcy.

Often illness led to job loss and with it the loss of health insurance. Out-of-pocket medical costs (for co-payments, deductibles and uncovered services) averaged $13,460 for those with private insurance at the onset of their illness versus $10,893 for the uninsured.

The highest costs -- averaging $18,005 -- were incurred by those who initially had private coverage but lost it in the course of their illness. Many families were bankrupted by medical expenses well below the catastrophic thresholds of high deductible plans that are increasingly popular with employers. The authors comment that even their own coverage from Harvard leaves them at risk for out-of-pocket costs above levels that often led to medical bankruptcy.

In many cases, high medical bills coincided with a loss of income as illness forced breadwinners to lose time from work.

If you haven't been too scared to keep on reading, now be really afraid. A person I know who has had several encounters with cancer treatment just went through another 'procedure', and found out his insurance requires that he go to the absolute worst place in D.C. to get treatment. What he just went through was torture. And lots of it is going to come out of pocket. Recommendation; go check out what your insurance covers now, not just what it costs. But more importantly, this country is lagging behind the world at large and leaving its citizens prey to the health industry. The health industry is handing you on to the financial community, where you max out the credit cards trying to stay afloat. When you can't pay even the interest on them, then what? As I mentioned, be really afraid.

If serious work isn't done to provide health care to this country's residents, we are looking at a real disaster as its population ages. Where do the indigent go when they have lost everything? Public services, just in case you didn't guess. Losing everything in bankruptcy means that you depend on your government. State and Federal agencies provide meals, housing, transportation, the things that you can't pay for anymore when every penny has gone to, say, hospital bills.

Our public services are at the breaking point as it is. With a population of boomers reaching their 60's, this is only going to go downhill.

This maladministration is shortsighted in many ways. If the country is totally bankrupted, they won't accept the blame though. It will be our fault for failing to save for old age (while paying the soaring costs of day-to-day living), and being basically profligate. Unless you are rich, in which case you're one of the base.

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Anonymous Barndog said...

Were you talking about my wife and I, Ruth?

The extra debtload we've had to endure, since I was forced into medical retirement, is usually the breaking point. Trying to catch up from the loss of my income, while we readjusted financial matters to live without that paycheck.

One incident where my wife had to take a couple months off from work, would doom us financially. LTD (long-term disability) leaves us short of her income by about 30%. Of course we could tap the 401k, and hose ourselves down the road...

That's the reality we face everyday.

5:05 AM  
Blogger Ruth said...

Actually, no, I didn't know those details. But I am afraid it could be a lot of folks who have been hit by financial disaster thru illness. Hope soon things are better for you, and am working for health care for the country.

5:20 AM  

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