Health, Health Care Insurance and Bankruptcy
Imagine for a moment that your health has taken a turn for the
worse. You need extensive medical attention and expensive
treatments. Would you be prepared to account for these medical
costs? Or would you or a family member ultimately have to deal
with this financial burden?
Surely, you would not want to suffer the consequences of paying
big medical bills on your own. This is why health insurance is
so important. A Harvard study conducted in 2001 found that
medical bills caused half of all bankruptcies. Therefore, you
should make sure that you have some form of medical insurance.
You should also make sure that your money is well-spent on
insurance that meets your needs.
Insurance Provided by Employer
You should feel lucky if you are in the minority of people who
receive health insurance through your employer. According to
bankrate.com, company health insurance is actually part of a
group insurance plan. Your employer pays for most of your
insurance and also pays for your insurance with portions of your
paychecks. Everyone in your group plan pays the same rate. The
premiums paid by healthy members go towards paying the bills of
sick members. Bankrate.com recommends that you study up on your
employee benefits package to make sure that the insurance plan
you choose provides you with the services and options you will
need. If you are young and/or relatively healthy, you may want
to consider choosing to pay for your company's cheapest health
Bankrate.com also recommends that you review your insurance plan
periodically. You may be paying more money for services you no
longer need. For example, if you have children that have
graduated from college or are no longer on your insurance plan,
you should change your insurance plan accordingly. Additionally,
if you have lost weight or quit smoking, you could qualify for a
cheaper insurance plan.
Have You Been Laid Off?
If you have recently lost your job, you may want to consider the
Consolidated Omnibus Budget Reconciliation Act (or COBRA) plan.
With a COBRA plan, you pay for the medical benefits your former
employer paid for on your own. The plan lasts up to 18 months.
Keep in mind that the COBRA plan is a bit expensive. In addition
to paying the premiums your company used to pay, you would also
have to pay a 2% service fee.
Are You Uninsured?
Unfortunately, according to bankrate.com you may face
discrimination from insurance companies if you try to insure
yourself on your own. You may have difficulty buying insurance
if you have any medical problems whatsoever. Remember, with a
company group insurance plan, your insurance provider only has
to pay the medical bills of the sick members in the group.
Look for health plans that have higher premiums. You may pay
more upfront for medical coverage, but you will ultimately spend
less on deductibles. At the very least, financial analyst Suz
Orman recommends paying for worst-case-scenario insurance for
medical bills that top $5,000. This way you can at least be sure
that you will not have to foot the entire bill for high
No one wants to live their life fearing the worst. By insuring
yourself, you can at least rest assured knowing that you are
prepared if your health takes a turn for the worse. As a result
you or your family would not have to suffer the additional
hardship of having to pay for your medical costs yourself. The
good news is that if you can not afford insurance coverage,
filing bankruptcy could eliminate your medical bills if
About the author:
Shobhana R. Kasturi is a partner with Legal Helpers and
specializes in consumer bankruptcy law. www.legalhelpers.com,
the law firm of Macey & Aleman, is one of the nation's largest
consumer bankruptcy firms. Legal Helpers can be contacted by
phone, 888-743-5787 or by email, info@LegalHelpers.com
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