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Increased medical debt may lead to bankruptcy

Medical bills are currently one of the top financial stressors for residents of New Jersey, and excessive medical debt is quickly becoming one of the foremost reasons for bankruptcy across the country. One car accident or serious illness can add up to thousands of dollars in bills, and even those with insurance can find themselves struggling to repay medical debt.

Many are surprised at the amount of money proper medical care takes, even after insurance pays its part. According to the Centers for Medicare and Medicaid Services, spending on health care in the United States rose from $2,854 a person in 1990 up to over three times that in 2012 at $8,915 per person.

Those with insurance may find that employers are paying less and less toward medical bills, and increased copayments and deductibles are bringing a larger portion of these costs to the consumer. Those without insurance often find themselves with very few options, and the number of Americans of working age who were currently on payment plans for medical bills or otherwise having difficulty paying the debts was up to 41 percent in 2012.

One way to keep medical costs down, and bankruptcy at bay, is to try to negotiate debt early on. Understanding what the expected cost of a procedure or treatment plan is from the start may provide more room for patients to explore repayment and financial assistance options. New recommended guidelines announced on Jan. 15 may make this process easier for patients. The guidelines recommend that health care providers make bills easy to understand and have billing disputes removed from patients’ credit reports when they are resolved.

Overwhelming medical debt can be a major source of stress, but there may be a way out. Patients who are unable to get on top of medical debt despite their best efforts may be faced with filing bankruptcy as a last option. Before filing, however, it is important to have a thorough understanding of the process and possible long-term consequences.

Source: The Tribune, “New rules, policies and some strategy can help patients resolve, and even avoid, medical debt” Linda A. Johnson, Feb. 13, 2014

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