As current government initiatives wrestle with the issue of millions of uninsured Americans facing potential medical bankruptcy, new studies are revealing that it’s not just the uninsured who are at risk. The issue of underinsured American individuals and families is becoming a major part of today’s healthcare conversation and alerting many more Americans to the dangers that they face, even if they have access to affordable health insurance policies.
Current statistics show a startling trend, where being underinsured is becoming a common way to fall into extreme medical debt and eventual bankruptcy or bad credit situations. Research by the Commonwealth Fund that appeared in recent industry journals shows that America’s underinsured community has doubled in the past four years to over 25 million people. While the highest number of underinsured Americans are in the income range below the poverty level, research shows that middle and upper income families are being affected in larger numbers each year. Research also shows that some individuals with what others would consider healthy annual incomes are still very likely to become underinsured in the immediate future.
In general, being underinsured has to do with the cost of one’s medical bills against that person’s annual income. Consumer advocates point to co-pays and high plan deductibles as being part of the equation that pushes an underinsured American toward bankruptcy, but many experts would say that the largest component of these kinds of situations are massive bills for complex medical procedures where a factor called co-insurance can leave a patient with many thousands of dollars in debt. If someone who is insured faces an extensive and very costly set of medical procedures related to a certain condition, he or she can end up paying 5%, 10%, 15% or more of the total medical bill. Although the insurer will pick up the major portion of the cost, even a small amount of the total bill is enough to bankrupt many patients, simply because the bills for these procedures can be so large. It’s not uncommon for medical bills, including separate facility and doctor charges, anesthesia charges, charges for related items and multiple doctor visits, and more, to total up above $100,000 in a given year. For the majority of Americans, this is completely unaffordable and will result in an inability to pay the entire debt. In these situations, the resulting debt must be managed down to workable levels, or the patient simply defaults, going through bankruptcy or suffering a destroyed credit rating.
Take the time to thoroughly review your medical bills and health plan coverage details to ensure accuracy of billing and insurance charges and payments. This step alone could save you thousands in out-of-pocket medical debt.