There is no chapter in the Bankruptcy Code called Medical bankruptcy. Rather it is one of the leading causes many people are forced to file bankruptcy. A recent study performed by the Harvard Medical School showed sixty percent of all bankruptcy proceedings are filed due to overwhelming medical bills!
With the rising cost of healthcare and the insured being responsible for approximately eighty percent of the total individual costs, medical bankruptcy has become more prevalent than ever before. Pre-existing conditions being exempt from many health insurance policies, catastrophic events and those who have no health insurance at all has devastated Americans and their ability to pay out of pocket medical expenses.
Many others are forced to file medical bankruptcy as the result of loss of income due to an injury or debilitating illness. No longer earning a paycheck, most have lost employer provided healthcare and cannot afford COBRA payments. Homes have been mortgaged to pay medical costs. That relieves the debt to the hospitals and doctors, but merely shifts, not removes the debt. Even many of America’s insured are struggling with high hospital bills they cannot pay. Those who rely on prescription medication to control or relieve a medical condition are finding themselves unable to pay the cost and often forgo keeping up with the necessary regiment. Many Americans are forced into credit card debt to pay for their on-going health care.
The unfortunate result is more and more Americans are filing medical bankruptcy than ever before. It is estimated that every ninety seconds, bankruptcy cases are filed with overwhelming medical costs as the primary reason consumers are seeking relief from debt.
Astonishingly, approximately sixty percent of those filing medical bankruptcy actually carry health insurance. Yet this does not seem to relieve the elevated cost of such conditions as diabetes, psychiatric illnesses and heart disease. The inability to pay medical costs and the stress of caring for those with chronic illness leads to further maladies that lead to increased medical costs which creates a vicious cycle of overwhelming debt.
Medical bankruptcy has become a chronic condition amongst Americans. Is there a cure?