Arizona is home to many older people who may find themselves with seemingly overwhelming medical costs from hospitalization or surgery. Although the Affordable Care Act increased access to medical insurance for many individuals and families, a 2013 study stated that unpaid medical bills were the top reason for bankruptcy filings. That means healthcare forced more people into filing for protection from creditors than did mortgage debt or credit card debt.
If this was a problem that happened only to the uninsured, the ACA might be expected to relieve the issue. However, the figures show that this is a problem for more than only the medically uninsured. In fact, a Web fundraising service founder states that 78 percent of the medical bankruptcies are filed by those with insurance.
He cited elements of healthcare costs not covered by insurance plans such as travel to medical facilities as well as co-insurance, co-pays and high deductibles. Ancillary expenses like day care also pile on to the financial burden, which can come at a time when the patient is too ill to work and so doesn't have money coming in to pay them. A figure the fundraiser used to illustrate the issue was the $8,500 a breast cancer patient must come up with just for out-of-pocket payments for expenses not covered by medical insurance.
An unexpected medical condition can lead to unmanageable debt from medical expenses. Filing for bankruptcy is an option that the U.S. justice system allows for those who need debt relief due to healthcare or other bills. A Chapter 7 bankruptcy may be the best choice for debtors without a lot of assets.
Source: FOX Business, "Medical Bankruptcies are Still a Problem, Here's What to Expect", Donna Fuscaldo, February 18, 2014